European Tax Haven Gets A Bit Closer
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European tax havens are great for saving tax, but if it's not close to an international airport it's not going to be attractive to those who want one but also want to continue running their business - which is why an island in the middle of the Pacific Ocean won't see many high net worth individuals looking to buy a property and take residency there.
But take a State that has an excellent reputation for sport, security and quality of life, put it on the coast of the Mediterranean and fill it with millionaires and billionaires and within fifteen minutes of an international airport - and you have Monaco.
Give it a border with the French Riviera and a short distance from Italy and it's easy to see why Monaco holds such appeal for successful business people who want to live somewhere where they're not paying half and often more of their income in tax and it's easy to understand why they pay top dollar (or in this case Euros) for real estate.
But there is an alternative, and that alternative is Andorra. It has similarities with Monaco but also differences, and one of the major differences that has put Andorra at a disadvantage for those considering which tax haven to choose is soon to disappear.
Looking at the similarities, both countries (and they are both independent countries, neither of which is a member of the EU) have a zero rate income tax and no inheritance tax, and both have first class medical facilities including modern hospitals with some of the best doctors and surgeons working there.
In order to gain residency both require a bank account to be established locally. The banks in Monaco will often ask for an initial deposit of between 300,000 and a million Euros while the Andorra banks will require a lot less than this. The residency office in Monaco will need to see a certificate from one of the banks in Monaco showing that the deposit has been made. Once residency is granted the money is free to be used for whatever purpose the person who deposited the money feels they want to use it for.
Another similarity is that both require an applicant to have an address within the country. This is via renting or buying, and Andorra is soon changing their rules where the minimum investment in a property in Andorra will be 370,000 Euros. Up to now there has been no established minimum spend.
But there are differences between the two, notably the cost of buying property in Monaco and property in Andorra. A 30m2 studio apartment will cost a million Euros in Monaco, while good two and three bedroom apartments are available for 400,000 Euros and houses from 800,000 Euros when looking at property in Andorra.
For some high net worth individuals the difference in real estate costs between the two isn't as important an issue as how convenient they are for conducting business. Andorra has high speed broadband, better than the UK's, so for those who can do much of their work online, it is an option - both countries are an hour ahead of GMT so doing business with London and New York isn't an issue.
However if that person considering both countries needed to physically meet people for business in different locations around Europe or further afield, Monaco currently wins hands down. Fifteen minutes away by helicopter or 40 minutes by car is Nice International Airport, served by various national and low cost airlines, with flights both in Europe and around the world available for the active businessman - and when compared to a two and a half hour drive from Andorra to Barcelona in Spain or Toulouse in France there is no contest.
But that is set to change with a new helicopter link having been approved recently between Barcelona and Andorra, taking the time down to less than thirty minutes for those who take Andorra residency - and regular flights between the UK and France starting this November at Seu d'Urgell Airport in Spain - a mere fifteen minute drive from the Andorra border, effectively killing off a long held Monaco property advantage.
And with Andorra property a bargain compared to Monaco there could be a few enterpreneurs making their way there this Whitsun.
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