Banks in Andorra

Banking in Andorra

When choosing Andorra as a location for your business operations or personal investments, banking in Andorra is essential. You may need to transfer capital for your newly formed company or make the investment required for the passive residency. Trust in the local banks and meeting compliance and due diligence requirements are fundamental for your future banking relationship in Andorra.

To summarise, banking in Andorra has three banks: Andbank, Morabanc, and Crèdit Andorrà. All these banks are national and domestically owned that offer domestic Andorra personal and business banking.

Andorra’s large banking sector has private banking and wealth management. The principality’s solvency ratios are above European standards, and some Andorran banks frequently score among the most solvent banks in Europe.

Although Andorra is not an EU member, Andorran banks operate in a similar regulatory environment as their European peers and financial operations are in Euros.

What bank types exist in Andorra?

In 2022, the takeover of Vallbanc (formerly BPA) by Crèdit Andorrà and of Banc Sabadell d’Andorra by Morabanc was completed, leaving Andorra with 3 banks. These banks accept individual as well as business banking clients.

You may choose from the following banks:

  • Andbank
  • Morabanc
  • Crèdit Andorrà

All banks are national and domestically owned banks. Their main activities are private banking and consumer banking for the local Andorran population and commercial banking for Andorran businesses. In the past, offshore banking was influential in the Andorran economy.

Since the economic opening and the various exchange of information treaties entered into force, offshore money positions have been reduced. Nevertheless, Andorra remains an alternative banking center for primarily 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 remaining offshore capital complying with international anti-money laundry requirements accrediting Andorra as a safe and solvent financial center.

How solvent are Andorra’s banks?

The 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 exceed 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, need to manage their balance sheets and funding strategy more conservatively. This assures further stability and makes Andorra’s banks slightly vulnerable to external shocks. It is unlikely that Andorra’s financial system may experience significant 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 will be slightly higher due to reduced competition, despite the SEPA integration of Andorra. Most banks offer free wires up to 500 EUR to other SEPA countries.

Spain’s banks have been forced to restructure heavily 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 if 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 a resident or non-resident individual or company. The compliance and due diligence of Andorran banks has substantially increased in the past years. Be ready to comply with anti-money laundering standards and FATCA protocol, indicate the origin of funds, and document transactions of significant nominal value.

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

Assistance to open a bank account in Andorra

Our firm assists with compliance and legal requirements for helping in opening an Andorran bank account. Most of our company incorporation plans include the assistance with the opening of a commercial account for your business. However, with specific activities and company structures, a higher due diligence process might be necessary, and you will need to consult us for 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.