The 5 banks of Andorra: how to open a bank account
The banking sector is a vital element when investors are launching new ventures in a foreign country. Access and trust of local banks is important for the development of economic activity within a country. When planning an investment in your business or personal life, following the requisite requirements and the Know Your Customer program that these lenders apply are essential for the future bank relationship. The fact that the financial and insurance sectors are about 10% of GDP makes that issue of financial policy even more urgent. Therefore today we will discuss the activity of this sector in the country: banks accounts and payments made in Andorra.
Andorran banks
The Andorran financial system includes 5 banks, one specialist credit institution, 8 financial institutions for management of investment organizations and 4 financial institutions. 34 insurance providers – of whom 18 are members – a branch of a foreign insurance group. Granted operations on Andorra. The banking sector represents a strong capitalisation of its various entities and with a conservative and prudent management. During the past year meanwhile, financial sector revenues jumped above 20% and almost beat most markets in the region. These characteristics permitted the industry to hold ratios above 10% well above major international financial markets. These banking companies are:
- Credit Andorra.
- Mora Banc.
- Vallbanc.
- Banc Sabadell Andorra (please note that this bank even that it has the same name, is not the same bank of Spain).
- Andbanc.
Nonetheless, Credit Andorra has bought Vallbanc and they are now in a fusion process that will be finish in 2022. The same has happen with Mora banc that recently has bought Banc Sabadell Andorra.
How do I open a bank account in Andorra as a non-resident
Andorra is a small landlocked micro state sandwiched between France and Spain. It is popular for skiing during the Pyrenees, cheap cigarettes, alcohol and low taxes. 11 million tourists visit the small town each month for supplies. This country has approximately 80,000 inhabitants. There’s a real absence of unemployment. Neither is it a member of the EU either. It is an idyllical country high in the mountains that looks down onto the rest of Europe.
Low taxes is one of the main interests of foreign people in Andorra. If you are a non resident in Andorra and you want to open a bank account in Andorra, you can do it. Andorra has good banking services too and they can open you a foreign bank account and don’t report it to your tax resident country if the amount of this account is less than 50.000€.
Open a bank account
Commercial banking is just a minority of the Andorran banking. Additional Wealth Management services like investments funds, the possibility to buy certain assets and financial products are parts of the day-to-day activities of the Principality. The legislation on money laundering has the strongest consequences because they have been strict. Furthermore it is necessary to comply with FATCA protocol and determine the origin of all funds contributed by focusing on document transactions of considerable nominal values. In addition to this it must note that commercial banks are a minority of Andorran bank activity. BPA was founded in 2015.
What does it imply to have a bank account?
However, since it was decided to regulate the situation and make things right in the country, it was necessary to inform the country of residence of the person requesting the bank account in Andorra. This fact generated that the Andorran banks stopped opening this type of accounts due to the complexity it entailed.
Currently, after the political situation generated in several jurisdictions such as Spain by the Covid-19, Andorran banks have started to receive requests from foreigners to open bank accounts to deposit their savings or to diversify their capital.
Faced with this exceptional situation, the banks have once again changed their mentality and now understand the need of many investors to diversify their capital. Therefore, they accept without any problem the opening of bank accounts by non-resident foreigners in Andorra.
However, these accounts can be opened provided that certain requirements are met and that the origin of the funds is fully justified.
What questions will the bank ask me?
The more the bank knows the more it has the ability to tailor their advice and service to you. The bank may ask about the origin of the proceeds and the nature of your job work. If you ask a banking institution to manage their investments they will ask about the degree of risk you accept. In order to get you the best support possible the bank ask about your future intentions: buy a house, start business, retire and everything else. When they ask why you think about investing money and how you take it when there’s risk involved.
What do you need to open a bank account in Andorra?
Andorran banking entities want to know exhaustively who their client is and that is why they need information and documentation such as for example:
- Last two income tax declarations of the applicants.
- Justification of the origin of the funds and their traceability.
- Proof of address.
- Explanation of banking operations.
- One year’s bank statement of the applicant’s personal account.
Once the compliance department of the bank has these documents, it will proceed to analyze the account, the client and the feasibility of opening the bank account of the non-resident foreigner, but in any case it will inform the country of tax residence of origin of the client that he has been accepted as a client and that he has a bank account in that entity.
Therefore, it is possible to open a bank account in Andorra without being a tax resident in Andorra.
What documentation will the bank want to see?
Andorra’s banks must check the identity of a customer. The bank needs official identification papers such as passports or equivalent document showing photo. The bank sometimes asks for proof that the source of your investment will be the source of your investments like the sale of your home, a declaration at a foreign bank from the transfer of shares of foreign companies and.
If you live in Andorra, is very recommended to open a local bank account in one of the Andorra banks, but you need to know that it can be a large account opening process.
Andorra and SEPA
Currently known as Single zone of payments in euros, this initiative allows persons, companies and other public organizations to make payments in euros, not using cash, of. SEPA operates using three payment instruments which can be used for national and international settlements in any country that it is in the European union.
Can an account be opened anonymously in Andorra?
Bank policy requires employees to identify the person opening an account and identify where necessary the beneficial owner. The banking industries were itself responsible for building highly specific international requirements as a means to dismantle crime money. Yes it’s just impossible.
Longtime ago, in Andorra was possible to open an offshore bank account, but nowadays it’s not possible anymore.
Is the opening guaranteed?
The availability is confirmed only if your information and the origin of your funds are provided properly. You must also show Bank evidence of source of money and have all documents legally valid and certified.
So, normally the banks open the bank accounts to foreign people, but as they are private companies, they can cancel you the opening process of the bank account.
Andorran Banking and the Andorran Financial Authority (UIFAND)
Financial regulator and governing body of Andorra is an institution of the province of Andorra responsible for regulating Andorra’s financial systems. Initially established in 1989 INAF was known as Andorran National Institute of Finance until 2018. It’s aim is to ensure the correct functioning and reputation : transparency and competitiveness. In addition to these functions and their derivatives the UIFAND has others such as collectibles and bonds established in pursuance of current legislation and judicial decisions and maintaining these funds preserving the principle of prudence.
How trustworthy are Andorra’s banks?
Andorran banks are widely considered in a higher-than-average position in terms of bank solvency. They maintain above average liquidity ratios and exceed capital requirements. Credit rating agencies have shown an optimistic outlook for Andorra in the last few years. Andorran banks don’t have any connections with the European central banks which can be understood both as negative for them and as positive. A centrally-administered fund insures deposit deposits through a maximum of £100,0000 per individual depositor in Andorra and the depositor has to proactively prepare for.
Offshore banking in Andorra
Offshore banking in the traditional sense of banking secrets is a fading part of Andorra’s banking industry structure in the traditional terms of Vallbanc was formally called Banca Privada d’Andorra recently and was taken to court by the Government on March 25 2015. The name was changed and the investment firm J.C. Flowers bought the property. Private banking however still plays an important role in Andorran banks economy, with private banking still important in the country’s banking system.
Andorra banking system: A complete guide
Banking in Andorra is one of the industry of the Principality. It’s highly regulated and as a new resident it’s quite easy to locate banks for that kind of money. Banks focus on serving local clients through retail banking accounts and private banking services for residents and commercial banking for local businesses. To apply for residency the applicants must have a local money market account. That’ll help you with all the costs of moving to Andorran and adjusting your life here.
Why is banking in Andorra interesting for non-Residents?
Some wealthy expats who have to pay for Switzerland, Liechtenstein or Monaco find private banking easier here. Andorran banks really take all the time to verify outgoing payments as valid sources of funds. Bankers here understand offshore activities and structures, and offshore firms and individuals with their own business offices in offshore countries are welcomed here. If you have 10 payments a month for electricity and water and you still have electricity bill payments you might have other problems. Or you need extra money. If you’re not coming to Andorra to do transactional banking you’re going to have to look elsewhere. In 2015 U.S. government officials killed an ATM for AML failures.
Are you ready to open a bank account in Andorra?
If you want to open Andorra bank accounts as a foreigner or working for a foreign company you can get started by using the instructions below. You can also get immediate access to our Premium Report Banking In Andorra: accessible private banking & world class banks. If opening an account as non-resident is difficult and you’re in trouble please contact us. And outlines pitfalls you have to follow, the deposit strategy to use the specific and effective loopholes and the best ways to get in with a low deposit.
Final recommendations
Andorran banking system is very special. After prolonged closure, the country attempts to open itself trying to get out of the gloom of historical isolation in a process which is going firmly ahead. At Andorra Insiders we consult with the top law firms, economists and prosecutors as well as real estate agents and numerous others. Contact us to tell us about your case or read some of our services available here. For living in this country or starting new company: you can count on us. Contact us on andorralawyers.com and read below.
