At MCA Assessors, we provide insights into the specific conditions to create a SICAV in Andorra. The open-end investment company (SICAV) in Andorra effectively manages and invests investors’ wealth across diverse assets. This hybrid entity, blending features of an investment fund and a public limited company, is favored by substantial fortunes for its remarkable 0% taxation. Moreover, Andorra’s SICAVs are administered by local banks and subject to oversight by the Andorran Financial Authority (AFA).
The Autoritat Financera Andorrana (AFA) is responsible for supervising the Andorran financial system. It is also the entity in charge of authorizing and regulating investment entities. Andorran sicavs are classified into three types: those dedicated to real estate, those focused on transferable securities and a third one that allows almost total freedom of investment.
In addition, collective investment entities stand out for their tax benefits, as they are taxed at 0%. In addition, these entities offer a high degree of confidentiality to investors, as their names do not appear in the company registry. This level of discretion is of great value to those seeking to protect their identity and privacy in the financial sphere.
Another relevant aspect is that the distribution of dividends is not subject to taxation in the case that the partners are Andorran. This means that they are taxed at 0% on this type of income. This factor contributes to making collective investment entities a fiscally attractive option for local investors.
To establish a sicav in Andorra, a minimum capital of 1.250.000 € is required, which amounts to 6.000.000 € if the investment is focused on real estate and real rights. However, it is important to know that there is no minimum number of shareholders established by Andorra for its formation.
In addition, the cost of creation and maintenance of a sicav in Andorra is very competitive compared to other countries. That is why it is a very attractive possibility for assets exceeding €3,000,000.
Another issue to take into account is that the collaboration of Andorran non-residents in a sicav is limited to 50%, but you don’t have to worry. There is the option of transferring your residence to Andorra to take advantage of a life with fairer taxation. If you meet the conditions to create a SICAV in Andorra At MCA Assessors we take care of all the bureaucracy to ensure a smooth and comfortable move.
These entities are subject to a special corporate income tax rate of 0%, excluding them from the general rate of 10%. Consequently, the sicav does not incur any tax charge on the income generated, making it possible to obtain income in Andorra without the obligation to pay taxes.
On the other hand, the distribution of dividends and capital gains derived from the transfer of shares of the sicav are exempt from tax if the partner is a natural person residing in Andorra.
When seeking to diversify investments and relying on the security of Andorran banks, people with considerable wealth are best suited to establish a sicav in Andorra. It should be noted that, in addition to the soundness of the banking system, large investors consider the opening of sicavs an important role in their succession planning strategy or an easy way to change their tax residence to Andorra.
At MCA Assessors we have a team of expert advisors to offer you specialized and personalized support. This will allow you to solve all your questions about Andorran sicavs, in addition to obtaining information tailored to your needs on how to make investments to get the maximum possible benefit in Andorra.
In conclusion, the conditions to create a sicav in Andorra imply considering fiscal aspects and advantages such as 0% taxation, confidentiality and tax exemption on dividends for Andorran partners. It is an attractive option for those who have large assets and is an interesting way to establish a succession strategy or a change of tax residence. At MCA Assessors we have a team of expert advisors who will clarify all your doubts about sicavs, adapting the information to your individual needs and facilitating decision making.