ProGestió
Andorra
Can you stay an Andorran resident while keeping business activity in France? Legal framework, requalification risks and best practices.
Content reviewed by the legal and tax team of ProGestió Andorra — Last updated:
The idea appeals to many entrepreneurs and executives: becoming an Andorran tax resident while keeping professional activity in France. On paper, the prospect of IRPF capped at 10% is attractive. In practice, this configuration is one of the most closely scrutinised by the French tax authorities. Keeping a foothold in France is not forbidden in itself, but it exposes the taxpayer to a real risk of tax residency requalification, with heavy consequences: tax reassessments over several years, penalties, and sometimes outright challenge of Andorran status. Here is what the legal framework says, where the real risks lie, and how to limit them.
Becoming a tax resident in Andorra is not limited to obtaining a residence permit (active or passive residency). Conditions of presence and centre of interests must be met, and these are verified on both sides of the border. The protocol to the Franco-Andorran tax treaty specifies that the expression “resident of a Contracting State” includes, for Andorra, any individual who stays in Andorran territory for more than 183 days during a calendar year, as well as any individual whose centre of economic interests is located in Andorra or who carries out their main professional activity there.
This same text sets out an important limit: this treaty-based residency status does not include individuals presumed to hold Andorran tax residency solely on the basis of Andorran nationality or a residence permit granted by Andorran authorities. In other words, holding an Andorran residence card is never, on its own, enough to be recognised as a resident within the meaning of the treaty. One of the criteria of actual presence or genuine economic attachment must also be satisfied.
The treaty signed in Paris on 2 April 2013 and in force since 1 July 2015 aims to avoid double taxation and prevent tax evasion in relation to income tax. It relies on the classic OECD criteria to resolve residency conflicts: permanent home, centre of vital interests, habitual abode, nationality.
But its scope is limited. One point deserves particular attention: the Franco-Andorran treaty is strictly limited to income tax, and wealth taxes are expressly excluded. In practice, this distinction is far from theoretical. It is entirely possible for a taxpayer to be recognised as an Andorran tax resident under the treaty for income tax purposes, while remaining a French tax resident under Article 4 B of the French General Tax Code for other taxes outside the treaty’s scope.
Another feature specific to this treaty: a nationality reservation clause. Article 25 provides that France retains the right to tax French nationals residing in Andorra as though the treaty did not exist, subject however to an agreement being reached between the competent authorities of both States. This is a rare clause in French tax treaties, which in principle set aside the nationality criterion in favour of residency alone.
Even after settling in Andorra, the French tax authorities retain their own framework. Under French law, the starting point remains Article 4 B of the Tax Code: home or principal place of stay in France, main professional activity in France, centre of economic interests in France. These criteria are alternative: just one is enough to tip a person into French tax residency, regardless of any residence permit held elsewhere.
This is precisely where the risk lies for anyone keeping an activity in France: if the family home remains in France, if the main place of stay continues to be in French territory, or if the centre of economic interests (the main source of income, the actual place where the activity is carried out) remains French, the authorities may consider that French tax residency never ceased, regardless of Andorran status.
Keeping professional activity in France while being an Andorran resident creates a problem on two levels.
At personal level, activity in France can, on its own, trigger the “main professional activity in France” criterion under Article 4 B of the Tax Code, or the “centre of economic interests” criterion. The more time spent in France for this activity, the higher the risk that the authorities will consider the main place of stay to remain French.
At the structure level, if the activity is carried out through an Andorran company but management decisions, contract signing or effective management actually take place in France, the authorities may requalify the Andorran set-up as a mere facade. Case law is strict on this point: in a recent case, the Conseil d’État ruled, in its sovereign assessment, that contracts remained signed and decisions made in Paris, which fully justified global taxation in French territory, despite the existence of a company registered in Andorra.
The notion of permanent establishment is also central for business profits. Article 5 of the treaty defines a permanent establishment as a fixed place of business through which an enterprise carries out all or part of its activity. If an Andorran resident company actually has a fixed establishment in France (office, premises, recurring presence of a manager carrying out the activity there), profits attributable to that establishment can be taxed in France, even if the registered office remains in Andorra.
French tax residency requalification occurs when the authorities demonstrate that a taxpayer, officially an Andorran resident, actually meets one or more criteria under Article 4 B of the Tax Code. The evidence used in audits is concrete and verifiable:
The consequences of requalification are severe: reassessment of French income tax over the entire period concerned (generally over several years, within the statute of limitations), late payment interest, and penalties that can be increased in cases of deliberate failure. For company directors, the authorities may also requalify the company’s place of effective management itself and subject all its profits to French corporate tax.
| Criterion | France (Article 4 B, Tax Code) | Andorra (treaty protocol) |
|---|---|---|
| Duration of presence | Main place of stay (overall assessment, no single day threshold) | More than 183 days per calendar year |
| Economic centre | Centre of economic interests in France | Centre of economic interests in Andorra |
| Professional activity | Main professional activity in France | Main professional activity in Andorra |
| Nationality | In principle irrelevant | Specific clause: France can tax its nationals residing in Andorra (Art. 25 of the treaty) |
The answer is not binary. Occasional presence in France, for assignments, client meetings or a limited secondary activity, does not automatically trigger requalification. What matters is the overall body of evidence: cumulative duration of stays, the share of total income generated by this French activity, the actual place of residence of the household, and the real place where decisions are made for company directors.
Conversely, a main, recurring and structuring professional activity carried out in France, while residency is officially Andorran, is a very high-risk configuration. This is especially true for liberal professionals and content creators whose clientele remains predominantly French and whose physical presence in French territory remains frequent.
Several precautions significantly reduce the risk of requalification, without ever eliminating it entirely:
In all cases, a French tax audit covering dual presence in France/Andorra relies on a concrete examination of the taxpayer’s daily life, not just Andorran administrative documents. Caution therefore requires full consistency between declared status and lived reality.
One point often comes up in practice: obtaining Andorran residency (active or passive) and being recognised as a tax resident within the meaning of the treaty are not the same thing. Administrative resident status in Andorra grants a right to stay. Tax residency, on the other hand, is determined by facts: duration of presence, centre of economic interests, place of main professional activity. An administrative Andorran resident who does not meet these factual criteria remains exposed to French taxation on their entire worldwide income.
Can I keep a client or a contract in France while being an Andorran resident? Keeping one or more French clients is not in itself disqualifying. What matters is the weight of this activity within total income and the actual place where the service is performed. An occasional activity, documented as secondary, is less risky than a main and recurring activity physically carried out in France.
What happens if the French authorities requalify my tax residency? They can claim French income tax for the years concerned, along with late payment interest and penalties. For company directors, the place of effective management of the structure may also be requalified, with a corporate tax reassessment on all profits.
Does the France-Andorra tax treaty automatically protect me from double taxation? No. It only covers income tax and only applies if the treaty residency criteria are actually met on both sides. Wealth taxes remain outside its scope, and a clause specific to this treaty allows France to continue taxing its nationals residing in Andorra under certain conditions.
Is the 183-day threshold enough to guarantee Andorran tax residency? It is one of three alternative criteria set out in the treaty protocol, alongside the centre of economic interests and the exercise of the main professional activity in Andorra. Exceeding this presence threshold strengthens the taxpayer’s position but does not exempt them from examining the other criteria, especially on the French side.
Is it different for salaried work carried out in France for a French employer? Yes, the situation is even more delicate: an employee whose employer and place of work remain French has every chance of having their main activity linked to France, which runs counter to the goal sought by settling in Andorra.
Must I close all activity in France before settling in Andorra? This is not an absolute legal requirement, but it is the safest solution. Otherwise, residual French activity must remain clearly secondary, documented as such, and never constitute the taxpayer’s centre of economic interests or main professional activity.
Figures and thresholds based on the regulations in force at the date of publication (22 October 2026), subject to legal changes. Please check with your advisor before making any decision.
To go further: Tax residency in Andorra: the process, Living in Andorra as a tax resident, Active or passive residency in Andorra: how to choose, Freelancing in Andorra: taxation, status and CASS, France-Andorra tax comparison 2026.
A first confidential conversation with our advisers to assess your situation and your options.
Thank you! Your enquiry has been sent. We will get back to you shortly.
Have you discovered all our services?
Get the Andorra relocation tax handbook
Thank you! Check your inbox, the guide is on its way.
