The SICAV, a very common collective investment figure in Europe, has its Andorran equivalent in the Collective Investment Scheme (OIC). These are collective investment entities widely used to manage personal capital and tax savings.
The purpose of the Andorran SICAV (hereafter referred to as SICAV for simplicity’s sake) is to invest investors’ assets and manage them in assets, rights, negotiable securities or other instruments.
It is an investment instrument halfway between an investment fund and a limited company, used mainly by large fortunes with the great advantage of being taxed at 0%.
The Andorran SICAV is normally managed from an Andorran bank and is supervised by the Andorran Financial Authority or AFA, and like most European SICAVs, there is a reporting and auditing obligation to the regulator.
What types of SICAVs exist in Andorra?
In Andorra there are three classes of this type of companies, depending on whether they make investments in transferable securities, in real estate or free investment. The latter is open and allows the company to make investments in many types of assets.
What capital is needed in an Andorran SICAV?
The assets of SICAVs in Andorra cannot be less than 1.250.000€ in general and 6.000.000€ in case they invest mainly in real estate and rights in rem.
Andorra does not require a minimum number of shareholders to set up a SICAV.
The cost of creation and maintenance of the company in Andorra is among the lowest in Europe, making it interesting for assets of more than 3.000.000€.
The participation of a non-resident Andorran in a SICAV cannot exceed 50%, making it interesting for the interested party to transfer his residence to Andorra and take advantage of all the tax advantages both for the company and at a personal level.
You can have your own SICAV or a compartment of it, and the latter option is the cheapest and most common.
How are SICAVs taxed in Andorra?
They are subject to corporate income tax at a special rate of 0%, so that the general rate of 10% is not applicable.
Therefore, the SICAV would not be subject to any tax charge for obtaining any kind of income, income would be obtained in Andorra without paying taxes.
If the partner of the SICAV is an individual resident in Andorra, the distribution of dividends would be exempt from taxation, in the same way as capital gains obtained as a result of the transfer of the SICAV shares.
How are SICAVs taxed in Andorra if you are a non-resident?
Andorra does not apply withholding taxes on the distribution of dividends to non-resident partners (individuals or legal entities), nor does it tax capital gains obtained on the sale of shares in Andorran companies by non-resident partners.
Who is an Andorran SICAV recommended for?
It is well known that SICAVs are a great way to invest money in regulated markets, stocks and funds reducing the tax burden significantly, leaving it even at 0%.
Thus, the typical profile for opening a SICAV in Andorra is as follows:
- High net worth individuals who want to diversify their investments and reduce country risk or EU risk in a solid banking system such as the Andorran one.
- Big investors who want to start planning their succession or their change of tax residence to Andorra through SICAVs or Unit Linked.
- An alternative to Luxembourg? Many Spanish residents who invest in Spanish SICAVs have decided to move their capital to Luxembourg SICAVs. However, many have not assessed the possibility of investing in Andorra.
Do you want to open a SICAV in Andorra?
In AndorraInc we collaborate with the best advisors and private banking managers in the country, so if you have doubts about Andorran SICAVs and want to know how to invest and especially the advantages of Andorran SICAVs do not hesitate to contact us.
We will introduce you to our private banking managers in order to discuss with them the possibilities that Andorra can offer you.