Andorra or France: which tax framework suits your project?

Choosing between Andorra and France isn't just about comparing two tax rates.

Andorra offers more moderate nominal taxation, while France has a larger market, an extensive social security system, and a different economic environment. The right answer mainly depends on where you actually live, your activity, your clients, the make-up of your wealth, and the income you continue to receive from French sources.

Moving to the Principality can make sense for an entrepreneur, an investor, or a family, but it needs to reflect a genuine transfer of residency and centre of interests. To understand the general rules of Andorran taxation, our dedicated guide covers personal income tax, corporate tax and IGI in detail.

The French tax scale applicable in 2026 to 2025 income runs from 0% to 45%. The standard corporate tax rate remains 25%, with a 15% rate on an initial portion of profit for certain SMEs meeting the legal conditions.

The standard VAT rate is 20% in France, compared with 4.5% for Andorran IGI. For someone with no local activity, see the investment required for passive residency in Andorra.

Holding an Andorran residence card or a company in the Principality isn't enough to automatically become an Andorran tax resident.

An individual is generally considered an Andorran tax resident when they spend more than 183 days in the territory, or when the main centre of their economic activities or interests is located there.

France, for its part, looks at several criteria:

• the household or main place of residence;
• the main professional activity;
• the centre of economic interests;
• the rules of the tax treaty where someone could be considered resident by both countries.

Someone whose family, company management, main investments and majority of income remain in France may therefore find it difficult to demonstrate a genuine transfer.

What remains taxable in France after leaving?

A change of tax residency doesn't remove all French taxation.

The following can, in particular, remain affected:

• rent from property located in France;
• certain real estate capital gains;
• remuneration linked to an activity carried out in France;
• certain French dividends and financial income;
• the IFI wealth tax applicable to French real estate assets held directly or indirectly;
• exit tax where the conditions set out in law are met.

A non-resident can, in particular, be liable for IFI on certain property and real estate rights located in France. The IFI threshold is set at €1.3 million of net taxable real estate wealth.

Is setting up an Andorran company enough?

No. An Andorran company needs an organisation consistent with its activity.

In particular, it's necessary to examine:

• where decisions are made;
• the director's presence;
• human and material resources;
• where clients are based;
• where services are actually carried out;
• the risk of a permanent establishment in France;
• the director's remuneration;
• justification for intragroup invoices.

A structure managed from France, or one mainly carrying out its activity in France, could retain a French tax link despite being registered in Andorra.

The treaty between Andorra and France allocates the right to tax different categories of income and deals with situations of dual residency.

It isn't, however, a blanket exemption. It determines which state can tax a given item of income, within what limits, and how double taxation should be relieved. The Franco-Andorran treaty does appear on the Principality's official list of treaties in force.

Who might Andorra suit?

Relocating can make sense for someone who:

• genuinely wants to live in the Principality;
• can carry out or manage their activity there;
• has an international client base;
• can move their centre of life and decision-making;
• is looking for an environment suited to a lean entrepreneurial structure;
• is willing to document their residency, cash flows, and organisation.

France may remain more suitable where the activity, family, employees, main clients and business assets remain firmly established there.

Your current residency, your companies, your wealth, and where your income comes from all need to be analysed together.

ProGestió helps you determine whether relocating to Andorra makes sense and which obligations will continue to apply in France. Would you like a personalised review of your France-Andorra situation?

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