Should I have a bank account in the Principality of Andorra?
If you’re considering moving to live in the Principality of Andorra, either because you’ve decided to create your own company and are applying for active residency or because you want to apply for passive residency, it’s very important to consider opening a bank account with a bank in the Principality of Andorra to streamline your day-to-day banking operations.
Even if it’s just to domicile state taxes in an Andorran bank account (such as income tax, corporate tax, general indirect tax, etc.) or to set up direct debits for regular bills (rent, electricity, mobile, etc.), it’s worth opening one. However, in some cases, being able to have a fully operational bank account can be a real challenge due to the stringent controls and requirements imposed by each bank’s compliance departments in the country.
Which banks operate in the Principality of Andorra?
As of today, there are 3 banks licensed to operate in the Principality of Andorra:
- Creand - Crèdit Andorrà: It is one of the largest and most diversified banks in Andorra. It offers a wide range of financial products and services, from current accounts to insurance and wealth management.
- MoraBanc: It is a family-owned bank with a long history in Andorra. It provides banking and financial services to both local and international clients, including private banking, asset management, and investment services.
- AndBank: It is another major bank in Andorra, specializing in private banking and wealth management. It offers investment services, financial planning, and asset management.
The fact that there are only 3 commercial banks where you can open a bank account implies that, although they compete with each other to try to gain market share, the conditions they offer are limited and inferior to those in other markets (when compared to other countries where the level of competition in the sector is much higher, such as the Spanish or French markets).
Why is it so difficult to open a bank account in the Principality of Andorra?
The country’s banking sector has undergone significant changes over the last decade, shifting from a traditional focus based on banking secrecy to a more transparent system aligned with international standards. This change has been driven by the implementation of measures such as FATCA-CRS and commitments against money laundering and terrorist financing. In order to comply with these commitments and standards, each bank’s compliance departments have the power to decide whether they fully accept a client and their operations, accept them partially, or not accept them at all.
What is needed to open a bank account in the Principality of Andorra?
Mainly, the following documents/explanations are required:
- Identification with an ID card or Passport.
- Details of the usual account operations, as well as the destination of future funds deposited into it.
- Justification of the origin of funds and their traceability (providing documentation such as deeds, contracts, tax declarations, statements of movements from other accounts, etc.).
- Having a residence permit in the Principality of Andorra (for residents).
The reason for wanting to open a bank account will determine whether the documentary requirements and/or explanations are more or less demanding. Depending on the activity you want to carry out, the bank will assess whether it is necessary to involve the compliance department to decide whether to authorize the bank account or not. The documentary requirements are not the same if you want to open an account to set up a direct debit where the payer is a company established in the Principality of Andorra, as opposed to wanting to open an account to bring in a high financial wealth or to carry out the economic activity of an Andorran company that will receive income and/or make payments to different state jurisdictions.
Opening a bank account without having an Andorran residence permit is possible, but you will need to justify the reasons why you want to do so, bearing in mind that the bank will automatically report the account to the state authorities of the client’s tax residence country to comply with the agreements signed by the country of Andorra (FATCA-CRS regulations).
I want to open a bank account in the Principality of Andorra, where do I start?
If you have decided to open a bank account with a bank in Andorra, the first thing you should do is define what banking operations you want to carry out; depending on that, the process will be more or less difficult. If you only want a bank account to set up a direct debit for the salary of a company established in Andorra, you will hardly have any problems opening a bank account with the bank of your choice. Unfortunately, based on our experience, the process is complicated in a high number of occasions for different reasons. Therefore, it is highly recommended to go through this process with the assistance of an advisor who can explain what the banking operations will be and approach the entity’s manager who has experience with clients with similar banking operations. This fact will increase the chances of the process being agile, fast, and successful, much more than if you try to do it on your own.
At SUMMIT ADVISORS, we have qualified personnel who come from different banking entities in the Principality of Andorra, and they will study your case so that you can open a bank account in the Principality of Andorra successfully and without complications. Ask us for advice without obligation.