Andorra is a Tax heaven, but they also said yes to the Tax Information Exchange Agreement (which more and more countries are joining), so to do it safe you actually have to live there.
The country is currently open for new registrations (and it might be the last time). If you live in Andorra you will be there as a 'passive residence' so you won't be able to run a business from there (but ofcourse with an online business you can just register it in Cyprus or something and still run it).
Here are the requirements to become a passive resident:
? You must be over 18 years old.
? You must prove that you do not have a criminal record.
? You must reside physically in Andorra for at least 183 days a year.
? You must deposit a security of 24,100 euros plus
6,025 euros for each dependant. This security must be deposited with the INAF (National Financial Institute) and will be refunded at the time of departure.
? You must undergo a medical examination in the month following your request for passive residence.
? You must prove that you have sufficient means to provide for your needs.
? You must submit evidence of social insurance covering illness, disability and old age.
I know several webmasters that live in Andorra. Officially you would have to be there 6 months a year, but they don't really check on it. But you will need an address, so you need to rent a condo full time.
Andorra is very nice in the summer (nice climate) and lots of outdoor activities, but in the winter it's the most fun as it's great for skiing so it's definitely worth becoming a passive resident and pay 0% tax for the rest of your life
