Investing with cryptocurrency in Andorra
The benefits of trading or mining cryptocurrencies in Andorra
Andorra clearly has many advantages to offer to young entrepreneurs and traders. Setting up a company is attractive for multiple reasons. Safety, environment, culture but also taxation make Andorra very attractive as a location for your trading activity. You may read further on advantages that speak for Andorra discussed here. However investing in cryptocurrencies in Andorra is a topic that we need to discuss separately from traditional factors that make a jurisdiction competitive.
Investing in cryptocurrencies such as “trading bitcoins” based in Andorra
If you are a trader investing into digital coins you may of course trade being a resident in Andorra. Residency in Andorra is an attractive option for various profiles and lifestyles. Please review here the different options available for active business people as well as passive retirees or traders.
Being a resident in Andorra you are fully subject to income taxation on your worldwide income. However there is income that may qualify for tax exemptions that includes capital gains from publicly traded stocks under certain conditions. We recommend an initial analysis of your trading activities, investment types and vehicles to properly evaluate your potential taxation implications in Andorra.
Ultimately your residency has to be properly maintained under the rules of international tax treaties and the definition of a tax residency in Andorra with respect to the neighboring countries is quite clear.
The regulatory framework for activities related to cryptocurrencies in Andorra
The legislation and regulatory framework for cryptocurrencies is still unchartered territory throughout much of the world. As currencies such as the bitcoin have multiplied their value over the past year banking authorities and governments are paying close attention and are working on a regulatory framework. Compliance in banks have been very careful as specifically the bitcoin had been used in transactions that are doubtful or directly for money-laundering purposes. Andorra in that sense is very sensitive to this topic with its increased vulnerability as small country and tiny financial system independent of the ECB. Its increased compliance and constant state of alert to prevent any incident also has an impact on the general attitude towards any business or trading activity with cryptocurrencies.
The financial regulatory and supervising body in Andorra called AFA is closely monitoring the developments, but has not yet formally pronounced itself with regards to the rules to establish companies with activity related to cryptocurrencies. The local business association has taken a proactive approach to urge the Andorran authorities to establish a legal framework and reduce uncertainty for those companies specialized in ICOs, blockchain technology and mining that wish to establish themselves in Andorra.
Cryptocurrency-mining in Andorra
Besides the lifestyle and tax benefits Andorra may also provide with the proper infrastructure for this future activity that is increasingly gaining in importance. According to Eurostat official numbers Andorra has some of the lowest electricity prices in Europe. The small principality has a price 0.134 EUR for the kilowatt per hour (kWh) , while the average in Europe is something above 0.20 euros for a kWh.
Apart from this the electrical infrastructure in Andorra is extremely stable and blackouts or down times are rather uncommon when comparing to Spain for example.
Industrial property is available for rent and server and IT infrastructure may be installed in suitable conditions.
Finally Andorra offers as one of the few countries in the world a coverage with 100% fiber optics.
These and other factors related to your lifestyle may make Andorra a suitable destination for your cryptocurrency / digital coin project.
Contact us today to evaluate your project.