What are the banks in Andorra? How can I open an account?
Introduction to Andorra
All Andorra banks now have SEPA access for standardised international transfers, this has greatly reduced the expensive transfer fees from Andorra that the banks used to charge.
Operating a Bank Account in Andorra
Operation of non-resident accounts are now becoming increasingly restricted in most banks here, there is a quarterly fee and as Andorra has signed up to the exchange of financial information all will be sent to your country of fiscal residence. (see opposite).
Based on current compliance policy it is very difficult and often impossible for a foreign company to open an account in Andorra unless there is commitment (most likely in the form of residency for one or more of the company shareholders/directors). Andorra is not open to foreign companies or individuals simply whose sole aim it is to take advantage of the lower rate of tax or to avoid other 3rd country taxes.
However, since Feb 2019, Mora Banc can open an account by means of a digital signature, this is predominantly for those who will apply for residency. Needless to say this is a proactive way to overcome the all important bank hurdles and have an account in place for the residency application. This has proved a God send during the lockdowns and travel restrictions in that potential applicants could still move forward with preparations. With the remaning banks, compliance can still be tackled by email but you will need to present yourself in person to render the acount operational.
Accounts here normally operate as multi-currency which means you can transfer any currency such as Sterling or US Dollars to your Andorran bank account and it will be credited in the currency received.
I have read on the internet offers to open an Andorran bank account by filling in online forms with your personal details. I can assure you that under no circumstances will you be the proud owner of an Andorran bank account, so beware!
Local Banks in Andorra
There are now only 3 main banks in Andorra, but one will notice the absence of the usual array of UK and foreign institutions. However all banks are efficient, online, and subject to due diligence and anti-money laundering directives.
Please note this list is for the purposes of a guide only and does not constitute advertising in any way:-
Commercial & Private Banking.
Commercial & Private Banking.
Commercial & Private Banking.
Commercial & Private Banking.
This has now been puchased by Credit Andorra and was the remnants of BPA that J C Flowers purchased and renamed Vall Banc.
Private and commercial banking, plus online banking and other services. Banc Sabadell has now been purchased by Mora Banc.
The Importance of a Fiscal Residence Certificate
Under the exchange of financial information up to which has signed Andorra information as required by the agreement is automatically sent to the countries concerned on 30 June and 31 December each year for those account holders whose country of fiscal residency is not Andorra.
When you open an account in Andorra as a new resident you are invariably a fiscal resident in another country ( If you are not then your application for a bank account is likely to be refused). Importantly your status as a fiscal resident in that country will remain in place until such time as the bank is informed otherwise. This information can ONLY be in the form of a fiscal residency certificate issued in Andorra (if that is your intention and to stop the automatic exchange of information).
That certificate can only be issued after 183 days after your residency card was issued. I have successfully requested on one occasion and they accepted the date of actual application to Immigration, this was a special request and should not form part of your calculations. This means that you will continue to be a fiscal resident in your previous country unless or until the bank has received the Andorran fiscal certificate.
The issue of the certificate does not necessarily mean you will be required to declare and pay tax, but logically that will become the next step where institutions wherever may require proof of an actual return. If you require fiscal residency in Andorra then 10% after allowances is arguably a reasonable price to pay.
If you require a fiscal certificate please contact me.
Andorra's Banks in 2023
Due to a series of mergers in 2022, there are now only 3 major banks in Andorra, please see below.
Gone are the days when you could walk in with a passport and be given a numbered account.
The golden rule now is 100% transparency, and if they have any doubt, no matter how slight they will say "no" rather than risking the wrath of the USA and other institutional blacklists, don't get me wrong, this is a major headache now to open a new account company or personal. Expect a financial rape, a process that is second to none in many clients feedback experience, but if you do have anything to hide, or are unwilling to disclose any area of your banking history then very simply do not apply. Each bank has developed their own interpretations of various regulatory diktats from international organisations resulting in a required analysis before the initial approach is made and I have guides for you on that at the initial preparation stage. In general a well prepared dossier will go a long way to complying with requirements.
Andorra has and continues to evolve from a secretive tax haven to a more open and accepted financial system, at least enough to be removed from the list of fiscal paradises. So with pressure from the OECD, EU and the global community Andorra and its banking system has yielded to pressure and strictly enforces due diligence. This due diligence requirement has again been strengthened in the light of the BPA scandal which still reverberates around Andorra.
In fact the compliance departments in all of the banks are being difficult, particularly where company accounts are involved. It is easier for a bank here to say no rather than having any shade of doubt whatsoever in opening a new account (and the same goes for personal accounts). Andorran banks are primarily interested in private banking, the average retail high street bank is not their main concern. If you are willing to show commitment both to Andorra AND to the bank itself ( in the form of active investments) then they will be more sympathetic, to the inactive account holders whose sole purpose for residency is tax avoidance or tax evasion ( dare I say?) you may well be turned away. For company accounts, the same criteria applies, you need to show commitment to Andorra, and not just an inactive company of convenience.
In fact, due diligence now forms a major role in the residency process, far more so than before. To this end I do have a guide for potential residency applicants who must have a local bank account to proceed with residency. Theoretically it is possible to continue with residency after being denied a local account but in practice this is extremely difficult and complicated. I now recommend two bank accounts in separate banks which I can arrange for you. Two separate bank accounts does not insinuate a specific risk to account holders but there is always the old adage of not having all eggs in one basket, particularly now after the BPA scandal. By having two bank accounts it gives residents choices, and each bank offers different products and services.
In general, the banking system here remains secure, BPA is accepted to have been an isolated incident and the Government was quick to react. It is noted in Credit Rating Agencies that there is no central bank or bank or last resort and that Andorra's GDP is dwarfed by private banking investment.
Fitch outlook for Andorra continues post pandemic to be BBB+ but this is still far below the former A- before the European crisis and BPA:-
"Andorra's credit profile is supported by high GDP per capita (more than three times the 'BBB' median), favourable governance indicators, high debt affordability and a record of fiscal prudence. These positive credit features are set against risks to the economy and sovereign balance sheet from a very large banking sector and the absence of a lender-of-last-resort"
Fitch July 2021
Solvency ratios in all of the banks here remain well above the globally recommended ratios, indeed some of Andorra's banks are within the top ten most solvent banks in Europe.
If you do intend to open a bank account and some banks still do offer services for non-residents or whether you intend to become a resident please contact me to discuss in the first instance, you need to be prepared and things can go wrong without the correct advice. Please scroll down for a further overview of the banks here.
The banks already are policing Fiscal Residency....
The banks are already applying the new taxation and fiscal residency tests and requirements for new and eventually existing residents.
The banks now for new residents and new accounts are requiring proof not only of fiscal residency in a country but also of the payment of tax in that country. If you are applying to Andorra to become a fiscal resident and you have not yet been paying taxes in any other jurisdiction you may have a hard job to explain to compliance those reasons, more than likely the bank will say no to the account. If there is a legitimate reason for not yet being a fiscal resident in any country, and realistically there are still quite a few reasons, and you have pleaded that you will become a fiscal resident of Andorra the banks may open an account subject to the Andorran tax return for the following year being submitted to them.
That also will carry the proviso that you have declared and paid tax on your worldwide income after any exemptions and allowances as prescribed by the Andorran tax laws. After all during the banks due diligence examination you will already probably have had to "declare" most of your current financial status to them so they wil have a pretty good idea whether you have followed the fiscal rules in making your declaration here. Whereas there is still no compulsion for reporting to Government (and that will change) they may be quick to close your account which will leave the new resident high and dry in Andorra without an account.
As Andorra moves forward into the tax paying 21st Century ( albeit low tax) the authorities here are making it now quite clear that they have little time for tax nomads or for those seeking to use passive residency to top up their days in the year to avoid paying taxes in any other country. The above requirements are already up and running for new residents, it may logically be that they start examining existing account holders and that sooner than anticipated you may be required to become a fiscal resident in Andorra and prove that you are paying taxes. For those who had accounts opened many ions ago with a good old passport and a bag of cash you may wish to start thinking about getting your house in order.