Andorra is diversifying its development model and allowing opening to foreign investment initiatives and business projects of international character.
        
This new economic model is based on the attractive tax but also on legal certainty, institutional stability, high quality of life and a polyglot population with an excellent level of training.
        
The tax reform started strongly in 2010 has given way to a new tax framework that allows the signing of double taxation agreements with major countries and makes an interesting Andorra to operate on the international platform. The new foreign investment law allows the creation of companies with 100% foreign capital.
        
Andorra in the international environment
    
Information exchange agreements and double taxation
        
In 2009 Andorra starts a very important contact with the will to establish agreements to exchange tax information with key neighboring countries process. These agreements determine the exchange of information on request of tax authorities, according to the OECD model. With these agreements Andorra longer considered a tax haven and out of the gray list of the OECD. Such agreements are tax information exchange prior to the signing of agreements step to avoid double taxation (CDI).
        
On April 2, 2013, Jordi Cinca, Minister of Finance, signed with his French counterpart, Pierre Moscovici, the agreement to avoid double taxation with France. This agreement must be ratified by the respective parliaments to take effect, but it represents a fundamental step opening Andorra and therefore to develop the new Andorran economic model. The ripening process will require the signing of these agreements to avoid double taxation with other countries and seeking legal certainty to foreign investors and limit the tax burden. It is useful to stress here that one of the special arrangements provided for in the Act Corporate Tax is now fully operational, and international trade activities can enjoy an exemption of 80% on the tax base, so the effective tax rate is 2% on profits.
        
Foreign Investment Act
        
Attracting foreign capital and talents generating activity, occupation and wealth requires the development of a legislative framework that is particularly attractive.
        
On 21 June 2012 the Foreign Investment Law was passed. This law allows openness to foreign capital and simplifying the process of creating companies with foreign capital.
        
The new tax framework
        
In 2010 3 basic laws regulating direct taxation approved
Tax profit corporation Andorran law. general rate of 10% of the income earned by the company with important deductions that allow a lower tax cost.
      
The law establishes special regimes that allow benefit from a 80% reduction in the tax base:
      
Societies international exploitation of intangibles:
      
Concession, authorization of use or assignment or licensing of patent rights, designs, models or industrial designs, trademarks, domain names and other distinctive signs of the company as well as industrial property rights.
Concession or license to use formula or procedures, rights of industrial, commercial or scientific information, including the use of industrial, commercial or scientific equipment.
      
Concession, lease or license copyright of literary, artistic or scientific works, including audiovisual productions, programs, applications and computer systems.
      
management companies and financial investment intragroup
      
Borrowings from related parties or third parties that are used in making loans to non-resident related entities.
Management and investment of own treasury or related entities.
      
Service factoring, leasing or collection management.
      
Exchange risk coverage group.
      
Debentures or shares to finance the group.
      
Companies engaged in international trade
      
International Sale of Goods, agents or brokers the sale of movable or immovable property situated outside the Andorran territory. The activity is from Andorra and the marketed product has not been sent or received from Andorra.
      

Income Tax of Economic Activities. general rate of 10%. Levied on the income derived from the realization of the economic activities of individuals resident in Andorra.

Income Tax for Non Residents. general rate of 10%. Are taxpayers of this tax individuals and legal entities tax in the Principality of Andorra nonresidents obtaining income in this area.

The 2012 law General Indirect Tax (IGI approved ) to apply from 1 January 2013. the IGI replaces most taxes that make up the indirect taxation until 31 December 2012. Very similar to the European VAT, the IGI carries a general rate to 4.5% a reduced rate to 1% for basic necessities, a type of super low 0% and a 9.5% increase applied to banking and financial services.

During 2013 It is being drafted the law on income of individuals most likely set a tax of 10% on income above € 40,000 per year.