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Andorra

Retail_Trading_Status

Allowed-Regulated Unknown
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Analysis ID
#414
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Created
2025-06-26 13:01
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Executive Summary

In Andorra, individuals are legally permitted to engage in cryptocurrency trading, subject to a developing regulatory framework primarily based on Law 24/2022. The Andorran Financial Authority (AFA) is the primary regulator, requiring entities operating in the digital asset space to obtain a license. Andorra aims to be a hub for new technologies by providing a clear legal framework and fostering technological innovation, while cryptocurrencies are not legal tender but gains are taxed at a maximum of 10%. AML/KYC regulations are in place, and the AFA has issued warnings regarding unlicensed platforms.

Key Pillars

The key regulatory pillars in Andorra's cryptocurrency framework include: the Andorran Financial Authority (AFA) as the primary regulator overseeing financial activities related to digital assets; core compliance requirements centered around Anti-Money Laundering (AML) and Know Your Customer (KYC) procedures as outlined in Law 14/2017; and licensing requirements for companies operating in the digital asset space, such as cryptocurrency exchanges or custody services, including registration with the AFA, minimum capital, civil liability insurance, and designation of a registered digital overseer.

Landmark Laws

Llei 24/2022, del 30 de juny, de la representació digital d'actius mitjançant l'ús de la criptografia i de la tecnologia de llibre registre distribuït i blockchain (Law 24/2022, of June 30, on the digital representation of assets through the use of cryptography and distributed ledger and blockchain technology): This law provides a clear legal framework for the digital representation of assets using cryptography and distributed ledger technology, aiming to attract foreign investment and position Andorra as a hub for new technologies. Law 14/2017, of June 22, on the Prevention and Fight Against Money Laundering and Terrorist Financing: This law outlines the requirements for AML/KYC procedures, including identity verification and due diligence, and requires obligated entities to retain data for at least ten years.

Considerations

Cryptocurrencies are not recognized as legal tender in Andorra, but gains from cryptocurrency transactions are subject to Personal Income Tax (IRPF) at a maximum rate of 10% on the net profit, with the first €3,000 of capital gains being exempt. Companies involved in cryptocurrency activities are also subject to a corporate tax rate capped at 10%. The AFA has issued warnings regarding unlicensed platforms, emphasizing that entities not authorized or registered with the AFA do not guarantee any protection for potential clients or investors. The Andorran authorities, including the AFA and the Financial Intelligence Unit of Andorra (Uifand), are focused on mitigating risks associated with virtual assets, such as money laundering and terrorist financing.

Notes

Andorra's government initiated the "Horitzó 23" (Horizon 23) action plan in 2020 to modernize the country and position it as an innovative hub for digital innovation and economic diversification. Banks in Andorra are beginning to adopt blockchain technology and offer services related to cryptocurrencies; for instance, MoraBanc has received approval for digital asset custody, and Creand Crèdit Andorrà has partnered with Onyze to offer crypto asset trading and custody services. The International Monetary Fund (IMF) has provided technical assistance to Andorra on registering cryptocurrency transactions and recommended that the AFA monitor crypto asset transactions and positions. It was noted in March 2024 that banks in Andorra require prior approval from the AFA to register bitcoin transactions and crypto assets, and at that time, no bank had yet requested such approval.

Detailed Explanation

Individual citizens and residents in Andorra are legally permitted to buy, sell, and hold cryptocurrencies, subject to a developing regulatory framework. This framework is primarily shaped by Llei 24/2022, del 30 de juny, de la representació digital d'actius mitjançant l'ús de la criptografia i de la tecnologia de llibre registre distribuït i blockchain (Law 24/2022, of June 30, on the digital representation of assets through the use of cryptography and distributed ledger and blockchain technology). This law aims to position Andorra as a hub for new technologies and attract foreign investment in projects related to this sector by providing a clear legal framework.

The Andorran Financial Authority (AFA - Autoritat Financera Andorrana) is the primary regulatory body overseeing financial activities, including those related to digital assets. Companies wishing to operate in the digital asset space, such as cryptocurrency exchanges or custody services, must obtain a specific license from the AFA. These licensing requirements include official registration with the AFA, a minimum established capital, civil liability insurance, and the designation of a "registered digital overseer" (veedor digital registrat) as an authorized representative before the AFA. These measures are designed to ensure the security of operations and align the sector with international standards for Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT).

While cryptocurrencies are not recognized as legal tender in Andorra, the sector benefits from this robust regulatory structure. The government has been proactive in updating its legal framework for digital assets, reflecting a commitment to fostering technological innovation while ensuring compliance with legal and financial standards. This approach is part of Andorra's broader "Horitzó 23" (Horizon 23) action plan, initiated in 2020 to modernize the country and position it as an innovative hub for digital innovation and economic diversification.

Gains from cryptocurrency transactions for individuals are subject to Personal Income Tax (IRPF - Impost sobre la Renda de les Persones Físiques) at a maximum rate of 10% on the net profit, with the first €3,000 of capital gains being exempt. Companies involved in cryptocurrency activities are subject to a corporate tax rate also capped at 10%.

The AFA has issued warnings regarding unlicensed platforms, emphasizing that entities not authorized or registered with the AFA do not guarantee any protection for potential clients or investors in Andorra. This highlights the importance for retail traders to use regulated and licensed entities. The Andorran authorities, including the AFA and the Financial Intelligence Unit of Andorra (Uifand), are also focused on mitigating risks associated with virtual assets, such as money laundering and terrorist financing. The Uifand has initiated a risk study to analyze the impact of virtual assets and design more effective control policies.

Banks in Andorra are also beginning to adopt blockchain technology and offer services related to cryptocurrencies. For instance, MoraBanc has received approval for digital asset custody and allows clients to store cryptocurrencies. Creand Crèdit Andorrà has also partnered with Onyze to offer crypto asset trading and custody services. However, it was noted in March 2024 that banks in Andorra require prior approval from the AFA to register bitcoin transactions and crypto assets, and at that time, no bank had yet requested such approval. The International Monetary Fund (IMF) has provided technical assistance to Andorra on registering cryptocurrency transactions and recommended that the AFA monitor crypto asset transactions and positions.

Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations are in place in Andorra, in line with international standards. Law 14/2017, of June 22, on the Prevention and Fight Against Money Laundering and Terrorist Financing, outlines the requirements for AML/KYC procedures, including identity verification. Obligated entities must perform due diligence and retain data for at least ten years. The traceability of funds is crucial, and Andorran banks are known for their meticulousness in this regard.

Summary Points

Okay, here's the regulatory analysis report on Retail_Trading_Status in Andorra, converted into a clear, well-structured bullet point format:

Retail Trading of Cryptocurrencies in Andorra: Regulatory Overview

I. General Status

  • Allowed-Regulated: Individual citizens and residents are legally permitted to buy, sell, and hold cryptocurrencies.
  • Developing Regulatory Framework: The regulatory environment is evolving and becoming more defined.

II. Key Regulatory Bodies

  • Andorran Financial Authority (AFA - Autoritat Financera Andorrana):
    • Primary regulatory body overseeing financial activities, including digital assets.
    • Responsible for licensing cryptocurrency exchanges and custody services.
    • Issues warnings regarding unlicensed platforms.
  • Financial Intelligence Unit of Andorra (Uifand):
    • Focused on mitigating risks associated with virtual assets, such as money laundering and terrorist financing.
    • Initiated a risk study to analyze the impact of virtual assets.

III. Key Legislation and Regulations

  • Llei 24/2022 (Law 24/2022, of June 30):
    • "De la representació digital d'actius mitjançant l'ús de la criptografia i de la tecnologia de llibre registre distribuït i blockchain" (On the digital representation of assets through the use of cryptography and distributed ledger and blockchain technology).
    • Provides a legal framework for the issuance, custody, exchange, and supervision of digital assets.
    • Aims to position Andorra as a hub for new technologies.
  • Law 14/2017, of June 22:
    • On the Prevention and Fight Against Money Laundering and Terrorist Financing.
    • Outlines requirements for AML/KYC procedures.

IV. Requirements for Compliance

  • Licensing for Cryptocurrency Businesses:
    • Companies operating in the digital asset space (e.g., exchanges, custody services) require a specific license from the AFA.
    • Requirements include:
      • Official registration with the AFA.
      • Minimum established capital.
      • Civil liability insurance.
      • Designation of a "registered digital overseer" (veedor digital registrat).
  • KYC/AML Procedures:
    • Obligated entities must perform due diligence and identity verification.
    • Data retention for at least ten years.
    • Traceability of funds is crucial.

V. Taxation

  • Personal Income Tax (IRPF - Impost sobre la Renda de les Persones Físiques):
    • Gains from cryptocurrency transactions are subject to IRPF.
    • Maximum rate of 10% on net profit.
    • First €3,000 of capital gains are exempt.
  • Corporate Tax:
    • Companies involved in cryptocurrency activities are subject to a corporate tax rate capped at 10%.

VI. Notable Restrictions or Limitations

  • Not Legal Tender: Cryptocurrencies are not recognized as legal tender in Andorra.
  • AFA Approval for Banks: Banks require prior approval from the AFA to register bitcoin transactions and crypto assets.
  • Unlicensed Platforms: The AFA warns against using unlicensed platforms, as they do not guarantee protection for clients or investors.

VII. Recent Developments or Changes

  • Banks Adopting Blockchain:
    • MoraBanc has received approval for digital asset custody.
    • Creand Crèdit Andorrà has partnered with Onyze to offer crypto asset trading and custody services.
  • IMF Technical Assistance: The International Monetary Fund (IMF) has provided technical assistance to Andorra on registering cryptocurrency transactions.
  • AFA Monitoring: The AFA is recommended to monitor crypto asset transactions and positions.
  • "Horitzó 23" (Horizon 23) Action Plan: Andorra's broader plan to modernize the country and position it as an innovative hub for digital innovation and economic diversification.

Full Analysis Report

Report on the Current Status of Retail Trading of Cryptocurrencies in Andorra

Date: 2025-06-26

Topic: Retail_Trading_Status

Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

1. Identified Status:

Allowed-Regulated

2. Detailed Narrative Explanation:

Individual citizens and residents in Andorra are legally permitted to buy, sell, and hold cryptocurrencies. This activity is subject to a developing regulatory framework, primarily shaped by the "Llei 24/2022, del 30 de juny, de la representació digital d'actius mitjançant l'ús de la criptografia i de la tecnologia de llibre registre distribuït i blockchain" (Law 24/2022, of June 30, on the digital representation of assets through the use of cryptography and distributed ledger and blockchain technology). This law aims to position Andorra as a hub for new technologies and attract foreign investment in projects related to this sector by providing a clear legal framework.

The Andorran Financial Authority (AFA - Autoritat Financera Andorrana) is the primary regulatory body overseeing financial activities, including those related to digital assets. Companies wishing to operate in the digital asset space, such as cryptocurrency exchanges or custody services, must obtain a specific license from the AFA. These licensing requirements include official registration with the AFA, a minimum established capital, civil liability insurance, and the designation of a "registered digital overseer" (veedor digital registrat) as an authorized representative before the AFA. These measures are designed to ensure the security of operations and align the sector with international standards for Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT).

While cryptocurrencies are not recognized as legal tender in Andorra, the sector benefits from this robust regulatory structure. The government has been proactive in updating its legal framework for digital assets, reflecting a commitment to fostering technological innovation while ensuring compliance with legal and financial standards. This approach is part of Andorra's broader "Horitzó 23" (Horizon 23) action plan, initiated in 2020 to modernize the country and position it as an innovative hub for digital innovation and economic diversification.

In terms of taxation, gains from cryptocurrency transactions for individuals are subject to Personal Income Tax (IRPF - Impost sobre la Renda de les Persones Físiques) at a maximum rate of 10% on the net profit, with the first €3,000 of capital gains being exempt. This relatively low tax rate makes Andorra an attractive destination for cryptocurrency investors. Companies involved in cryptocurrency activities are subject to a corporate tax rate also capped at 10%.

The AFA has issued warnings regarding unlicensed platforms, emphasizing that entities not authorized or registered with the AFA do not guarantee any protection for potential clients or investors in Andorra. This highlights the importance for retail traders to use regulated and licensed entities. The Andorran authorities, including the AFA and the Financial Intelligence Unit of Andorra (Uifand), are also focused on mitigating risks associated with virtual assets, such as money laundering and terrorist financing. The Uifand has initiated a risk study to analyze the impact of virtual assets and design more effective control policies.

Banks in Andorra are also beginning to adopt blockchain technology and offer services related to cryptocurrencies. For instance, MoraBanc has received approval for digital asset custody and allows clients to store cryptocurrencies. Creand Crèdit Andorrà has also partnered with Onyze to offer crypto asset trading and custody services. However, it was noted in March 2024 that banks in Andorra require prior approval from the AFA to register bitcoin transactions and crypto assets, and at that time, no bank had yet requested such approval. The International Monetary Fund (IMF) has provided technical assistance to Andorra on registering cryptocurrency transactions and recommended that the AFA monitor crypto asset transactions and positions.

Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations are in place in Andorra, in line with international standards. Law 14/2017, of June 22, on the Prevention and Fight Against Money Laundering and Terrorist Financing, outlines the requirements for AML/KYC procedures, including identity verification. Obligated entities must perform due diligence and retain data for at least ten years. The traceability of funds is crucial, and Andorran banks are known for their meticulousness in this regard.

3. Specific, Relevant Text Excerpts:

  • Llei 24/2022 (Law 24/2022): "Andorra ha establert un marc regulatori específic per a la tecnologia blockchain i les criptomonedes mitjançant la la Llei 24/2022, del 30 de juny, de la representació digital d'actius mitjançant l'ús de la criptografia i de la tecnologia de llibre registre distribuït i blockchain (Ley de activos digitales). Aquesta legislació proporciona directrius clares per a la emissió, custòdia, intercanvi i supervisió d'actius digitals utilitzant tecnologies de registre distribuït (DLT) i blockchain." (Andorra has established a specific regulatory framework for blockchain technology and cryptocurrencies through Law 24/2022, of June 30, on the digital representation of assets through the use of cryptography and distributed ledger and blockchain technology (Digital Assets Law). This legislation provides clear guidelines for the issuance, custody, exchange, and supervision of digital assets using distributed ledger (DLT) and blockchain technologies.)
  • AFA Licensing: "Les empreses que desitgin operar en l'àmbit dels actius digitals a Andorra, com plataformes DeFi, marketplaces de NFTs o serveis de custòdia, deben obtenir una llicència específica atorgada por la Autoritat Financera Andorrana (AFA)." (Companies wishing to operate in the field of digital assets in Andorra, such as DeFi platforms, NFT marketplaces, or custody services, must obtain a specific license granted by the Andorran Financial Authority (AFA).)
  • Taxation: "A Andorra, els guanys obtinguts mitjançant la compravenda de monedes virtuals (trading) tributa al tipus màxim que contempla la llei d'IRPF, és a dir, un 10% del benefici net." (In Andorra, profits obtained through the buying and selling of virtual currencies (trading) are taxed at the maximum rate contemplated by the Personal Income Tax law, i.e., 10% of the net profit.) Another source states: "En Andorra, las ganancias obtenidas por la compraventa o el trading de criptomonedas tributan como ganancias de capital dentro del IRPF (Impuesto sobre la Renta de las Personas Físicas), cuyo tipo impositivo general es del 10% sobre la ganancia neta." (In Andorra, gains obtained from the sale or trading of cryptocurrencies are taxed as capital gains within the IRPF (Personal Income Tax), whose general tax rate is 10% on the net gain.)
  • AFA Warnings: "En aquest sentit, l'AFA ha fet públic un avís en que deixa clar que 'la societat Bitcoinforme, SL amb marca Bit2Me, no disposa de cap tipus d'autorització ni està registrada a l'AFA', motiu pel qual s'adverteix que 'no es garanteix a Andorra cap tipus de protecció als potencials clients o inversors'." (In this regard, the AFA has issued a notice making it clear that 'the company Bitcoinforme, SL under the brand Bit2Me, does not have any type of authorization nor is it registered with the AFA', for which reason it is warned that 'no type of protection is guaranteed in Andorra for potential clients or investors'.)
  • AML/KYC: "Under the guidelines of the General Council of Andorra, Andorran Financial Authority (AFA) and the aforementioned Act(s) [Law 14/2017, of 22 June, on the Prevention and Fight Against Money Laundering and Terrorist Financing], this document highlights the necessary requirements for AML and KYC procedures, in particular, Identity Verification required in Andorra."
  • Regulatory Intent: "L'enfocament regulatori d'Andorra subratlla el seu compromís de fomentar la innovació tecnològica mentre assegura un compliment sòlid dels estàndards legals i financers en el sector dels actius digitals." (Andorra's regulatory approach underscores its commitment to fostering technological innovation while ensuring robust compliance with legal and financial standards in the digital asset sector.)

4. Direct, Accessible URL Links to Specific Sources:

Web Sources (19)

Sources discovered via web search grounding

Search queries used (7)
  • estat actual de la negociació minorista de criptomonedes a Andorra 2024 2025
  • regulació de criptomonedes a Andorra per a particulars
  • lleis de criptomoneda a Andorra
  • Autoritat Financera Andorrana (AFA) criptomonedes
  • requisits KYC/AML per a criptomonedes a Andorra
  • advertiments oficials sobre la negociació de criptomonedes a Andorra
  • és legal comprar i vendre criptomonedes a Andorra per a residents
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