ANDORRA’S BANKING SECRECY IS A THING OF THE PAST: COMPLIANCE REGULATIONS NOW RULE SUPREME

ANDORRA’S SHIFT TOWARDS COMPLIANCE

Andorra, a small principality nestled in the Pyrenees mountains between France and Spain, has long been known for its banking secrecy and private banking. However, this model has undergone significant changes over the past decade due to international pressure and regulations.

In an effort to combat money laundering and terrorist financing, Andorra implemented the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS). This move has earned the country a stable rating from reputable agencies such as Fitch and Moody’s, which have valued Andorran banks with a BBB rating.

ANDORRA AS A FINANCIAL HUB

This new regulatory environment has transformed Andorra into an attractive alternative to traditional European banking systems. The country is now part of the Single Euro Payments Area (SEPA), allowing companies and organizations to make payments in euros from across the EU with domestic transaction conditions.

Andorra aspires to regain its status as a major financial center by attracting international capital. However, this requires adapting to an increasingly complex regulatory landscape.

CHOOSING THE RIGHT BANK IN ANDORRA

With only five banks operating in Andorra and two more set to be absorbed into existing institutions, the choice of bank is limited to three major players: Morabanc, Creand (formerly Crèdit Andorrà), and Andbank. Each bank offers a range of services catering to different needs.

OPENING A BANK ACCOUNT IN ANDORRA

Opening a bank account in Andorra requires a comprehensive compliance process to ensure that the client’s business and source of funds are legitimate. This involves providing documentation such as identification, proof of address, solvency, social security number (for residents), and source of funds.

While this process may seem daunting, reputable banks will guide clients through it, ensuring successful resolution. As long as business activities are legitimate, clients can expect a smooth compliance procedure.

ADVANTAGES OF OPENING A BANK ACCOUNT IN ANDORRA

New residents in Andorra require a local bank account for various formalities such as paying taxes and fees, obtaining residency, and accessing essential services like telephony and internet. For non-residents, opening an account in Andorra offers several benefits:

Alternative to European banking systems with country risk coverage up to €100,000
Private banking managers with international experience at lower costs than Swiss or Luxembourg competitors
Access to international private banking funds, Unit Linked, multi-currency accounts, and omnibus accounts
Potential for future residence or retirement in Andorra

PRIVATE BANKING IN ANDORRA

Andorran private banking provides comprehensive wealth management tailored to high net worth individuals and family groups. To be accepted into the elite, clients must invest at least €500,000 (although some banks accept a minimum of €350,000).

Private banking in Andorra offers diverse products for entrepreneurs, HNWI, digital entrepreneurs, and other large business owners, including:

Access to international investment funds, equities, derivatives, or structured products
Goldman Sachs international private banking through one of the leading banks in Andorra
Unit Linked, or international life insurance for tax planning
Non-resident alternative bank accounts reducing country risk
International omnibus accounts through multi-national banking providers
SICAVs (ICOs) real estate investment trusts

CHOOSING THE RIGHT BANK FOR YOU

With different banks offering varying services and benefits, choosing the right one can be challenging. If you’re unsure about which bank to choose or need assistance with opening a bank account in Andorra, contact us for guidance. We have the best contacts in international private banking in Andorra who will help you determine if this country is suitable for your needs.