Andorra Trade

Subchapters:

  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

Trade balance for the last 5 years

Trade balance (million EUR)

2017 2018 2019 2020 2021
Exports from the EU (million EUR) 1,240.00 1,298.90 1,290.00 1,315.60 1,283.90
Imports into the EU (million EUR) 85.4 97 89 85.6 96.9
Balance with the EU (million EUR) -1 154.5 -1,201.9 -1,200.9 -1,230.0 -1,187.0

Source: European Commission

The Principality of Andorra maintains close relations with the European Union. The State Secretariat for European Affairs deals, for example, with coordinating the negotiation of agreements, their implementation and the monitoring of issues of interest. Andorra currently has several bilateral agreements and is negotiating an association agreement with the EU regarding participation in the internal market.

  • Allcountrylist: Overview of major industries in Andorra, including mining, construction, transportation, tourism, and foreign trade.

Commodity structure

Main items of import in 2021:

  • Code 62 – Clothing and clothing accessories, other than knitted or crocheted – 22.2%
  • Code 87 – Vehicles, other than rolling stock, their parts, components and accessories – 22%
  • Code 24 – Tobacco and manufactured tobacco substitutes – 14.9%
  • Code 61 – Clothing and clothing accessories, knitted or crocheted – 14%
2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 214.7 61.01 56.8 35.2 41.4
Imports to the Czech Republic (billion CZK) 4.9 5.51 4.4 4.6 18
Balance with the Czech Republic (billion CZK) 209.8 55.5 52.4 30.6 23.4

Source: CZSO

Trade relations with countries outside the EU

Outside the EU, the strongest market for Andorra is Great Britain and the USA, other partners include China and Switzerland.

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) ON ON ON ON ON
Imports to countries outside the EU (million EUR) ON ON ON ON ON
Balance with non-EU countries (million EUR) ON ON ON ON ON

Source: EIU, Eurostat

Foreign direct investment

Spain continues to be the main source of foreign direct investment in Andorra, followed by France. Within the European Union are its strongest partners, such as Germany and Italy. From an industry perspective, the main focus of investment was the provision of services. In 2020, the volume of foreign direct investment in the country decreased significantly, but in 2021 it increased again. Andorra’s main attractions for foreign investors lie in the competitive tax framework or the quality of life. The country has concluded several treaties on the prevention of double taxation, and a treaty with the Czech Republic is also expected in the near future.

Due to the small area of ​​the country and the related relatively expensive price of land, it is difficult to imagine the development of export and investment activities connected with the creation of a platform for industrial production, etc.

On the contrary, some specialized areas of services appear to be increasingly interesting, e.g. marketing, online sales channels, service telephone lines and consulting activities, especially in the field of intellectual property.

At the same time, foreign activities in the science and research sector, online entertainment, for which the Andorran government creates favorable conditions, are gaining weight.

FTAs and treaties

Andorra has several cooperation and trade agreements with the EU.

In 1990, the Customs Union Agreement was signed between Andorra and the EEC, which entered into force in 1991.

In 2004, the Cooperation Agreement between the European Communities and Andorra was concluded, updating and extending the content of the 1990 agreement by establishing a framework for cooperation in the fields of environment, transport, culture, regional policy, veterinary care and regional policy.

Andorra is not part of the Schengen area.

Since 2003, however, it has signed an Agreement with France and Spain on the movement and residence of third-country nationals , which allows entry into the country to all who have the right to enter Spain or France. The three contracting states jointly coordinate their visa obligations and Andorra is de facto governed by Schengen visa requirements.

In 2004, the Agreement on Taxation of Savings Income was also signed, which ensures the setting of equivalent measures in the territory of Andorra according to the European Community, in order to be able to effectively tax savings income in the form of interest rates.

The use of the euro was confirmed in late 2011 with the signing of the Agreement on Monetary Union between the EU and Andorra . The agreement allows Andorra to use the currency and, from June 2013, to mint its own euro coins.

In 2013, at Andorra’s instigation, negotiations on the revision of the agreement were initiated, which resulted in the signing in February 2016 of a new Agreement on the Automatic Exchange of Information on Financial Accounts , aimed at improving international tax cooperation and preventing tax evasion.

As part of the tax reform that began in 2012, a 10% tax on the income of legal entities and individuals was introduced.

In 2015, negotiations on the Association Agreement with the EU began. The aim of the agreement is to ensure a uniform arrangement for the access of these countries to the internal market and the harmonization of the national economy with individual EU sector policies.

In 2020, Andorra became the 190th country of the International Monetary Fund .

Developmental cooperation

Andorra implements its development policy with the aim of efficiency and flexibility, considering the conclusions adopted in the Paris Declaration and the Accra Action Plan as its framework.

The Ministry of Foreign Affairs is responsible for development cooperation, which devotes 17.5% of its budget to it. In addition to the state administration, a number of Andorran non-governmental and non-profit organizations participate in specific development cooperation projects.

The budget for development cooperation and humanitarian aid was set for 2022 in the amount of EUR 805,000.00.

The country’s sectoral development policy pursues the following goals: protection of vulnerable sections of the population (especially women and children), management of water resources, sustainable development, the fight against climate change, poverty and the promotion of education.

Geographically, the priorities are distributed as follows:

Priority Group No. 1 (main priority): in Africa Burkina Faso, Cameroon, Madagascar, Mali, Mozambique, Central African Republic, Senegal and Uganda; in Asia, Afghanistan, Cambodia and Syria; in Latin America, Bolivia, Colombia, Haiti and Honduras; in Europe, Armenia and Ukraine.

Priority Group No. 2 (medium priority): in Africa Benin, Burundi, Republic of Guinea, Guinea Bissau, Guinea Bissau, Niger, Democratic Republic of the Congo, Republic of the Congo, Rwanda, Sierra Leone, Togo and Chad; in Asia, the Philippines and Nepal.; in Latin America, El Salvador, Nicaragua and the Dominican Republic.; in Europe, Kosovo and Moldova.

Priority group No. 3 (regular priority): Other countries of the Ibero-American Summit, Francophonie and countries listed by organizations such as UNDP, the United Nations and the World Bank as developing countries. Detailed information on the government’s development cooperation programs (together with the 2030 Agenda projects) can be found on the relevant websites, including the project plan for 2022: https://www.exteriors.ad/es/asuntos-multilaterales-y-cooperaciin/cooperacion -international-al-desarrollo

Prospective fields of study (MOP)

The most promising items for Czech exports, sectors for investment, privatization and development projects

Due to the small area of ​​the country and the related relatively expensive price of land, it is difficult to imagine the development of export and investment activities connected with the creation of a platform for industrial production, etc. On the contrary, some specialized areas of services appear to be increasingly interesting, e.g. marketing, online sales channels, telephone service lines and consulting activities, especially in the field of intellectual property. At the same time, foreign activities in the science and research sector, online entertainment, for which the Andorran government creates favorable conditions, are gaining weight.

Marketing

Online sales channels

Service telephone lines

Online entertainment, sports

Areas of intellectual property

Science and research

Andorra Trade