Banking in Andorra

When choosing a location for your business operations or personal investments banking is important. You may need to transfer capital for your newly formed company or make the investment needed for the passive residency. In any case trust into the local banks as well as being able to meet compliance and due diligence requirements are fundamental for your future banking relationship in Andorra.

What type of banks are existing in Andorra?

Andorra has currently 5 banking institutions available to the public which are all accepting individual as well as business banking clients.

You may choose from the following banks:

  1. Andbank
  2. Morabanc
  3. Banc Sabadell d’Andorra
  4. Credit Andorrà
  5. Vallbanc (formerly BPA)

All banks are national and domestically owned banks. Their main activities are private banking and consumer banking for the local Andorran population as well as commercial banking for Andorran businesses. In the past the offshore banking has had an importance in the Andorran economy. Since the economic opening and the various exchange of information treaties entered into force the offshore money positions have been reducing. Nevertheless Andorra remains an alternative banking center for mostly Spanish and French individuals seeking to diversify their exposure. With the automatic data exchange CRS going into effect and recent increases in strict compliance by Andorran banks the offshore capital that remains is complying with international anti-money laundry requirements accrediting Andorra as a safe and solvent financial center.

How solvent are Andorra’s banks ?

Solvency ratios of Andorran banks are above European standards and some Andorran banks frequently score among the most solvent banks in Europe. Their capital adequacy ratio and liquidity usually far exceeds the requirements of the EU banking sector. We are looking at some of the most solvent banks in Europe.

Nevertheless Andorra’s banks do not have funding access to the European Central Bank and therefore obviously need to manage their balance sheets and funding strategy more conservative. This assures further stability but also makes Andorra’s banks slightly vulnerable to external shocks. It is unlikely that Andorra’s financial system may experience major turbulences especially after one of their banks recently successfully was removed from the US Treasury FinCen’s list of money laundering concerns. Having been forced to tighten due diligence and compliance would make Andorra’s banking system most likely even stronger than before.

Andorran companies holding accounts in Spain and France

Putting your eggs all into one basket never was a wise decision. Also Andorran banks are less competitive in products such as merchant accounts or international wire transfers. Fees simply will be higher due to reduced competition and the non-SEPA integration of Andorra.

Spain’s banks have been forced to heavily restructure and fierce competition has driven down commissions. Therefore opening an alternative commercial account in Spain may be an alternative depending on your business needs. The possibility is certainly there is you comply with their due diligence and may provide a Spanish tax representative holding a Spanish tax identification number for your Andorra enterprise.

Opening a personal bank account in Andorra

You may open an account in Andorra as resident or non-resident individual or company. The compliance and due diligence of Andorran banks has substantially increased in the past two years. Be ready to comply with anti-money laundering standards as well as with FATCA protocol and inidicating the origin of funds as well as document transactions of important nominal value.

Other than this Andorra’s bank accounts offer a wide range of additional services such as multicurrency accounts and various financial products and instruments looking to offer diversification from traditional Spanish and French banking.

Assistance to open a bank account in Andorra

Our firm provides assistance with compliance and legal requirements for the opening of a bank account in Andorra. Most of our company incorporation plans include the assistance with the opening of a commercial account for your business. However with certain activities and company structures a higher due diligence process might be necessary and you will need to consult us for a possible assistance in these matters. We have very close relationships with several banks in Andorra and may facilitate this process for you. Apart from the introduction we will help you with all the documents and legal steps to meet compliance.