Leaving France for Andorra: The Real Criteria

Tax announcements, political debates, and economic uncertainty can speed up thinking about relocating abroad. On their own, they shouldn’t determine a move from France to Andorra.

A successful relocation rests on a durable decision: genuinely living in the Principality, organising your activity there, preparing your family, and accepting the legal consequences of a change of residency.

Leaving purely in reaction to the news can lead to an unsuitable structure, a hasty return, or a tax residency dispute. A sound project needs to remain coherent even if the political context changes.

Six criteria to examine before deciding

Criterion	Key question
Lifestyle	Do you genuinely want to live in Andorra for several years?
Activity	Can it be run or carried out from the Principality?
Family	Are your spouse and children on board with the project?
Taxation	Which income will remain taxable in France?
Wealth	What assets, companies, and property will you keep?
Timeline	Can the move be planned ahead of major transactions?

Taxation can be a factor, but it needs to be viewed as part of the whole picture.

Comparing the rate isn’t enough

Andorra applies a general rate of 10% for personal income tax and corporate tax, while France uses a progressive scale for individuals and a standard rate of 25% for companies.

This nominal difference doesn’t automatically translate into a specific person’s actual savings.

It’s necessary to factor in, in particular:

• the nature of the income;
• social security contributions;
• professional expenses;
• household composition;
• dividends and capital gains;
• French real estate assets;
• any exit tax;
• withholding taxes;
• tax treaties.

A serious simulation compares the situation before and after leaving, including the taxes that remain in France.

Tax residency needs to match the facts

France can consider someone a resident where their household, main activity, or centre of economic interests remains there.

Andorra considers, in particular, presence exceeding 183 days or the main centre of economic interests.

Where both countries make a claim, the Franco-Andorran treaty examines, in sequence, permanent accommodation, the centre of vital interests, habitual residence, and other criteria.

The file therefore needs to be consistent across several elements:

• where the spouse and children live;
• schooling;
• accommodation genuinely available;
• management of companies;
• contracts and place of work;
• bank accounts and everyday spending;
• administrative registrations;
• the moving timeline.

An Andorran address and a residence card aren’t enough if the whole of your life remains organised in France.

Keeping a French business

Personally relocating doesn’t necessarily require closing or transferring a French company.

Several options can be considered:

• keeping the company and appointing local management;
• remaining a director while documenting the functions carried out;
• setting up an Andorran company for a new, separate activity;
• putting a holding company in place where shareholdings and a group structure justify it;
• selling the business or part of the capital.

It’s necessary to avoid invoicing, from an Andorran company, services that are actually still carried out using the French company’s resources. Functions, risks, employees, and contracts need to follow economic reality.

Setting up a company in Andorra: in which cases?

An Andorran company can be relevant for an activity genuinely run from the Principality: consulting, digital, trading, international services, or a new independent branch.

It needs a credible organisation:

• a director present and active;
• suitable premises or an office;
• a bank account;
• its own contracts;
• accounting;
• identifiable clients and suppliers;
• genuine activity within the timeframe set for foreign investment.

Setting up a company purely to issue invoices at a lower rate, without relocating the functions, creates tax and banking risks.

Income that can remain taxable in France

After leaving, France retains, in particular, a taxing right over certain French-source income:

• rent from property located in France;
• real estate capital gains;
• remuneration linked to an activity carried out in France;
• certain pensions;
• income or distributions under domestic and treaty rules;
• French real estate wealth falling under the IFI.

The treaty prevents or corrects certain instances of double taxation, but it doesn’t turn French income into exclusively Andorran income.

Preparing your wealth before leaving

Transactions carried out just before or after the change of residency can have significant consequences:

• gifting shares;
• contributing assets to a holding company;
• selling a business;
• splitting ownership and usufruct;
• transferring a portfolio;
• selling a property;
• an exceptional distribution.

The timeline needs to be set before signing anything. A transaction designed after the taxable event generally can’t correct tax that has already arisen.

Family and daily life

The project also needs to cover:

• accommodation and the rental market;
• school and languages;
• healthcare and CASS;
• the spouse’s job;
• vehicles;
• distance from family;
• travel to airports;
• activities and the mountain environment.

A tax difference can lose all its appeal if the lifestyle doesn’t suit the household.

A reasonable decision timeline

Six to twelve months before: analyse residency, activity, wealth, and family.

Three to six months before: prepare accommodation, immigration, documents, the bank, and any company.

At the time of departure: organise tax returns, contracts, mandates, and evidence of the move.

After settling in: keep evidence of presence, set up accounting, and check the first tax year in both countries.

Frequently asked questions

Does a period of political instability justify leaving for tax reasons? No. Residency is based on personal and economic facts, not on the political motive for the move.

Can you keep your house in France? Yes. It can, however, be a factor in determining residency and remains subject to French rules on income, capital gains, and potentially the IFI.

Do you need to transfer all your companies? No. Keeping them with suitable governance can be more coherent than an artificial transfer.

When should the analysis start? Before any sale, gift, significant distribution, or setting up a holding company.

To go further: Andorra vs France, Taxation in Andorra, Residency options, Company formation, Moving to Andorra with family.