Why Stock Market Investors Are Turning to Andorra: 0% on Capital Gains Explained

For high-net-worth individuals (HNWIs), maximizing returns from stock market investments is not only about portfolio performance—it’s also about smart tax planning. Andorra, a small yet financially sophisticated country, offers one of Europe’s most favorable personal tax environments, especially for private investors. Here’s why more HNWIs are choosing Andorra as their tax residency.

1. 0% IRPF on Capital Gains for Minority Shareholders

In Andorra, private individuals who invest in stocks enjoy an extraordinary tax advantage: capital gains are exempt from personal income tax (IRPF) under certain conditions.

If an individual owns less than 25% of a company, the capital gains obtained from selling those shares are 100% tax-free under Andorran IRPF law. This applies whether the company is listed or privately held.

⚠️ This exemption only applies to individuals, not companies. Corporate profits are subject to Corporate Income Tax (IS), which is generally 10%.

2. Tax-Free Gains for Major Shareholders After 10 Years

Even if you own 25% or more of a company, Andorra rewards long-term investment. If you hold your shares for at least 10 years, the capital gains from their sale are also exempt from IRPF.

This approach is particularly beneficial for founders, family offices, and long-term strategic investors seeking tax-efficient exits.

3. Andorra Does Not Tax Wealth, Inheritance, or Gifts

In addition to the IRPF exemption on capital gains:

• No wealth tax is levied on personal assets.

• No inheritance or gift tax, allowing for efficient intergenerational wealth transfers.

  
  

This makes Andorra a comprehensive destination for asset protection and legacy planning.

4. Not Applicable to Companies: Corporate Income Still Taxed

It’s important to note: the 0% tax rate on capital gains only applies under IRPF (individual income tax).If the sale is made through a company (e.g., a holding or investment entity), capital gains will be taxed at the standard Corporate Income Tax (IS) rate, which is 10% in most cases.

Therefore, choosing the right structure—personal vs. corporate—is essential when planning your investments in Andorra.

5. A Stable, Transparent, and Trusted Jurisdiction

Andorra combines tax efficiency with:

• Political and financial stability.

• EU Monetary Agreement (Euro-based economy).

• Compliance with OECD and international transparency standards.

  
  

This makes it one of the few remaining European jurisdictions where HNWIs can still enjoy both low taxation and legal certainty.

Conclusion

If you are an individual investor looking to minimize taxes on stock market profits, Andorra’s IRPF exemption on capital gains provides a powerful advantage—especially when combined with its broader tax benefits and investor-friendly environment.

At LinkAnd, we help HNWIs and their advisors navigate Andorra’s legal and tax framework with precision. From structuring your investments to managing your relocation, our network connects you with trusted local experts to unlock the full potential of this investor haven.