Andorra
Country overview
The Principality of Andorra is a landlocked country in the Pyrenees mountain range between Spain and France. It is one of the smallest countries in Europe, occupying approximately 468 square kilometres and with a population in 2021 (est.) of 79,034.
Ethnic groups (in 2022) included Andorran (48.3 per cent), Spanish (24.8 per cent), followed by Portuguese (11.2 per cent) and French (4.5 per cent). The official language is Catalan, with French, Spanish and Portuguese also spoken. Roman Catholicism is the predominant religion.
Andorra is one of the oldest countries in Europe. However, centuries of isolation meant that it was relatively removed from the mainstream of European history and shared significant ties only with France and Spain. Expansion in tourism and telecommunications since the 1970s has gradually opened it up to the rest of Europe.
Bilateral relations
Australia established diplomatic relations with Andorra in 1998, with accreditation through the Australian Embassy in Madrid.
Political overview
Andorra was an independent feudal protectorate from 1278 to 1993, when the country's first written constitution was ratified, creating a modern system of government and establishing the Principality as a parliamentary democracy.
Andorra is a constitutional diarchy and parliamentary democracy. Its heads of state – co-princes – are the President of France, Emmanuel Macron (since May 2017), and the Bishop of Urgell (based in the neighbouring Spanish town Seu d'Urgell), HE Joan Enric Vives i Sicília (since May 2003). The role of the co-princes is largely ceremonial.
Parliamentary terms in the General Council (Andorran parliament) are four years, with half the counsellors elected in equal numbers from the seven administrative parishes, and the other half from a single national constituency. The head of government (Prime Minister-equivalent) is Xavier Espot Zamora, whose broad centre-right coalition, Democrats for Andorra, came to power in 2011 and was most recently re-elected in 2023.
The central challenges for the principality remain implementation of further fiscal reform, closer integration with the EU through finalising negotiations on an Association Agreement and ensuring continued economic growth.
Foreign policy
Andorra is an active member of the international community, including through membership of the United Nations (UN), the Council of Europe and the Organization for Security and Cooperation in Europe (OSCE).
Although not a member of the European Union, Andorra uses the Euro as its currency and enjoys a 'special relationship' with the EU, such as being treated as an EU member for trade in manufactured goods (no tariffs) and as a non-EU member for agricultural products.
Fast facts
- Andorran visitors to Australia (2022)
- 170
- Australian resident returns from the Andorran (2022)
- 70
- Resident Australian population born in Andorra (2021 census)
- 26
Agreements with Andorra
Australia signed a Tax Information Exchange Agreement with Andorra in 2012.
Texts of bilateral agreements are available at the Australian Treaties Database.
Trade and investment
Australia's economic relations with Andorra are minimal. Australian imports from Andorra were worth over US$65,000 and Australian exports to Andorra were worth almost US$132,000 (2021 World Bank figures).
The services sector is the most important in Andorra, accounting for roughly 80 per cent of the country's workforce. The services sector is heavily dependent on tourism, which constitutes the largest source of income for the country (Andorra receives more than 8 million visitors annually). The retail and hotel industries are also very prominent, and so is the country's large banking and financial sector, which accounts for over 20 per cent of GDP.
As only two per cent of Andorra's land is arable, it relies heavily on imports of food and other goods. Spain and France are its main trading partners. Spain buys over 60 per cent of Andorra's exports and provides a similar proportion of its imports; France takes almost 20 per cent of Andorra's exports and provides 13 per cent of its imports (2018 World Bank figures).
Previously a longstanding tax-free entity, Andorra has enacted policies committing to greater domestic and international tax compliance. In 2013, it introduced a value added tax (VAT)-like general indirect tax (called IGI, at a rate of 4.5 per cent), corporation tax and non-resident income tax. Personal income tax was introduced on 1 January 2015 at a flat rate of 10 per cent (5 per cent for incomes between 24,000 and 40,000 Euros). Andorra has signed tax information exchange agreements (TIEAs), including the OECD Declaration in 2014, and TIEAs with Spain and Italy in 2015. It has also signed double taxation treaties, including with France and Portugal.
Andorra is diversifying its economy in areas such as IT, education and medical services.
The Australian Trade Commission (Austrade) Madrid Office aims to attract foreign direct investment into Australia and promotes the Australian education sector.
Contact
Australia’s diplomatic representation in Andorra is from the Australian Embassy in Madrid.
Torre Emperador, Paseo de la Castellana, 259D
Level 24, 28046, Madrid
Ph: +34 91 353 6600
Email: madrid.embassy@dfat.gov.au