🇵🇹vs🇦🇩vs🇨🇾

Portugal vs Andorra: Tax & Residency Comparison (2026)

We compare Portugal and Andorra on taxes, cost of living, and residency requirements — plus a third option most people miss: Cyprus Non-Dom, with a ~5% effective tax rate.

Last updated: 2026-03-29

Quick Comparison: Portugal vs Andorra vs Cyprus Non-Dom

🇵🇹 Portugal🇦🇩 Andorra🇨🇾 Cyprus
Corporate tax21%10%15%
Income taxUp to 48%Up to 10%0% (dividends)
Effective rate~25-30%~10%~5%
Dividend tax28%0%0% income tax, 2.65% GHS only
Cost of livingMediumHighMedium
EU memberYesNoYes

Interactive Tax Calculator

Countries compared

🇵🇹

Portugal

Effective rate

28%

Est. tax: €28,000

🇦🇩

Andorra

Effective rate

10%

Est. tax: €10,000

Our recommendation

Best option
🇨🇾

Cyprus (Non-Dom)

At ~5% effective rate, Cyprus saves you more than either country.

Effective rate

5%

Est. tax: €5,000

Annual savings vs Portugal

€23,000

Estimates based on effective rates. Consult a tax advisor for your specific situation.

Portugal vs Andorra: Detailed Analysis

With Portugal ending its NHR regime, many Spanish and Portuguese speakers are looking at Andorra as an alternative. Andorra offers a flat 10% tax on both personal income and corporate profits, with 0% on dividends. Portugal now charges up to 48% income tax and 28% on dividends. However, Andorra is not an EU member, has a tiny economy, and requires a EUR 400K deposit for residency. Portugal offers EU membership, a diverse economy, and a world-class lifestyle. The choice often comes down to: how much do you value EU access versus saving 30%+ on taxes?

Pros and Cons

🇵🇹 Portugal

Pros

  • +EU membership and Schengen access
  • +Golden Visa program (reformed 2023)
  • +High quality of life, mild climate
  • +Growing tech and startup ecosystem

Cons

  • -NHR regime ended for new applicants (2024)
  • -Standard income tax rates up to 48%
  • -High social security contributions (~34%)
  • -Dividend withholding tax at 28%

🇦🇩 Andorra

Pros

  • +Low flat tax rate (10% max)
  • +No dividend tax
  • +Close to Spain and France
  • +Safe, high quality of life

Cons

  • -Not EU member, limited market access
  • -Very small economy and market
  • -Requires €400K deposit for residency
  • -Limited international banking

Our Verdict

Andorra wins on taxes (10% flat), but lacks EU membership. Portugal has better lifestyle but much higher taxes since NHR ended.

But there is a third option...

The Alternative Most People Miss: Cyprus

You do not have to choose between EU membership and low taxes. Cyprus gives you both: EU membership with Schengen access, AND a ~5% effective tax rate through Non-Dom status. That is half what you would pay in Andorra (10%), with none of the limitations of a micro-state. The 60-day rule makes it even more flexible than Andorra, where you need 183 days of presence.

🇨🇾

Cyprus Non-Dom: ~5% effective tax

The option most people overlook

  • ✓EU member with full Schengen access
  • ✓Non-Dom status: 0% tax on dividends (only 2.65% GHS)
  • ✓~5% effective tax rate for entrepreneurs
  • ✓60-day rule: tax residency with minimal presence
  • ✓Mediterranean lifestyle, 340 days of sun
  • ✓English widely spoken

Detailed Cyprus comparisons:

Cyprus vs Portugal

Frequently Asked Questions

Is Andorra or Portugal better for taxes?+
Andorra is significantly better for taxes with its 10% flat rate, compared to Portugal standard rates of up to 48% since NHR ended. However, Cyprus Non-Dom at ~5% effective beats both.
Can I keep EU residency if I move to Andorra?+
No. Andorra is not an EU member. Moving there means losing EU residency benefits unless you maintain residency in an EU country. This is a key disadvantage compared to Cyprus, which is a full EU member.
How much does Andorra residency cost?+
Andorra requires a EUR 400,000 deposit with the national financial authority (AFA), plus setting up a company or making a qualifying investment. Total setup costs typically run EUR 450,000-500,000.
What about the Cyprus alternative?+
Cyprus Non-Dom status offers ~5% effective tax, EU membership, Schengen access, and only requires 60 days of annual presence. No large deposit is required like Andorra.
Is Portugal NHR still available in 2026?+
No. Portugal ended the NHR regime for new applicants in 2024. Current standard income tax rates range from 14.5% to 48%, making it one of the higher-taxed countries in Western Europe.
Which country is best for Spanish speakers wanting low taxes?+
While Andorra is popular with Spanish speakers due to proximity and shared language, Cyprus offers lower taxes (~5% vs 10%), EU membership, and English as a widely spoken language. Many Spanish expats are discovering Cyprus as the better option.

Sources and References

Tax data: PwC Worldwide Tax Summaries, KPMG Tax Guides (2025/2026), Big Four country guides. Effective rates are approximations for entrepreneur structures (company + low salary + dividends). Consult a tax advisor before making decisions.

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