The end of the “non-dom” regime in the United Kingdom: why Andorra is emerging as Europe’s new fiscal alternative

The recent tax reform in the United Kingdom has marked a turning point in international wealth planning. The well-known non-domiciled residents regime, popularly called non-dom, ceased to apply on 6 April 2025, bringing an end to a model that for decades attracted thousands of foreign residents due to its tax advantages.

Following its elimination, many British citizens and international residents are now seeking a stable, safe, and tax-efficient European jurisdiction that allows them to continue managing their wealth with freedom and transparency. This is where Andorra emerges as a real, modern alternative, fully aligned with international standards.

This is where Andorra emerges as a real, modern alternative, fully aligned with international standards.

1. The end of the “non-dom”: a historic shift in the British system

For years, the non-dom regime allowed residents who were not domiciled in the United Kingdom to be taxed only on income generated within the UK, as long as their foreign income remained outside the country (remittance basis).

However, since 6 April 2025, this regime has been abolished. From that date forward, all UK tax residents are taxed on their worldwide income, except in very limited cases of temporary new residence (a four-year transitional regime for individuals arriving after spending ten years abroad).

This reform has resulted in a substantial increase in tax burdens for many international profiles (entrepreneurs, investors, and global professionals) who had previously considered the UK an attractive environment thanks to its flexible tax system.

2. Andorra: a competitive, internationally recognised fiscal framework

In contrast to the uncertainty created by the new British landscape, Andorra offers a clear, stable, and OECD-compliant tax structure—ideal for those looking to optimise their European residence without resorting to tax havens.

The Principality is characterised by:

• Corporate tax between 2% and 10%,
• Personal Income Tax (IRPF) with a maximum rate of 10%,
• No wealth tax, inheritance tax, or gift tax,
• A fully transparent and internationally cooperative system, with information-exchange agreements and double taxation treaties.

These conditions have made Andorra an ideal platform for structuring wealth, centralising investments, and establishing tax residence—both for individuals and corporations.

3. Requirements and guarantees for tax residence in Andorra

Andorra offers various residence programmes adapted to different profiles:

• Passive residence (by investment): suitable for high-net-worth individuals or retirees who wish to settle in the country without carrying out direct economic activity.
• Active residence: designed for entrepreneurs and professionals who wish to develop their business in Andorra, either by creating their own company or joining an existing one.

In both cases, residents benefit from reduced and stable taxation, access to the Andorran financial system, free movement within the European area, and an exceptional quality of life in a safe, multilingual, natural environment.

4. New double taxation treaty between Andorra and the United Kingdom

A key milestone in strengthening fiscal relations between the two countries has been the signing of the Double Taxation Agreement between Andorra and the United Kingdom, which enters into force in January.

This agreement provides greater legal certainty and transparency for British citizens wishing to move their residence or investments to the Principality.

The treaty ensures that income will not be taxed twice (neither in the UK nor in Andorra), thereby promoting mobility, investment, and the arrival of new high-level residents.

Without doubt, this development reinforces Andorra’s position as a strategic destination for British professionals and companies seeking to maintain a European presence in a modern and predictable tax environment.

5. Legal framework and regulatory security

Andorran legislation offers full legal security to foreign investors, with clear rules in corporate, tax, and financial matters.

Procedures for establishing companies, opening bank accounts, and obtaining residence are agile and transparent, overseen by strong institutions such as the Andorran Financial Authority (AFA).

Likewise, double taxation treaties signed with several European countries (including France, Spain, Luxembourg, and now the United Kingdom) guarantee protection against international double taxation—a key element for British business owners with global interests.

6. Comparison with other European frameworks

While other European jurisdictions (such as Ireland, Malta, or Cyprus) also offer favourable regimes, Andorra provides a uniquely balanced combination of advantages:

• It is outside the European Union, yet maintains customs and cooperation agreements with it.
• It has significantly lower tax pressure than most neighbouring countries.
• It offers superior quality of life, a very low crime rate, an exceptional natural environment, and a top-tier educational and healthcare system.

Together, these factors make Andorra the most balanced fiscal and lifestyle refuge in Europe.

7. Looking ahead: Andorra as a destination of stability and opportunity

The disappearance of the non-dom regime has reshaped the European tax landscape and opened a window of opportunity for those wishing to reorganise their residence and wealth structures.

In this new scenario, Andorra stands out as the logical evolution for the modern British investor: a country with competitive taxation, a solid legal framework, and an international outlook.