We tend to focus on ministates such as Monaco, The Vatican, and of course Gibraltar, the British Overseas Territory so close to us, but there is another one and it also touches Spain. The introduction alongside makes it sound like a fairy tale, but there is some truth to it, as Andorra is very much the forgotten principality, but one that harbours much that is of interest within a postage stamp on the European map.

Making up about 500m2 of the Pyrenees Mountains, Andorra is wedged in between Spain and France, and though it runs its own affairs, by tradition has two ‘protecting’ Princes: the President of France and the Bishop of the nearby Spanish town of La Seu d’Urgell. Indeed, President Emmanuel Macron is a Prince for the duration of his tenure, but how did it come to be so, and how did Andorra resist being absorbed into its large neighbours?

Though protected by mountain ranges, the original Iberian tribes had to fight off the likes of Hannibal the Carthaginian (he of the elephants) before succumbing to Roman and later Visigoth rule. Germanic tribes (in this case the Franks) later protected Andorra from Moorish rule, and it was part of Charlemagne’s great empire, but the concept of independence under French-Spanish protection was first established in the 9th century and ratified in the 13th.
For centuries, the landlocked country played a cat and mouse game to remain independent and keep absorption into France or Spain at bay. Since then, Andorra has been that delightfully forgotten little principality in the shade of the Pyrenees, and for most of its history was a land of shepherds, farms, steel forges and guild weavers. The result was a dreamy, romantic little domain of wooded mountains and green pastures far removed from the turmoil of the greater world.

Andorra Comes Into The World

The later 19th century saw a partial end to this blissful isolation, with the building of spa hotels that laid the basis for what has since become an important tourist industry. Every year, Andorra attracts around ten million visitors – 125 times its population. They come for the healing waters and spa treatments, to ski and above all, to shop, for it is upon the latter that Andorra’s riches have been based.

A small hiccup occurred in the 1930s, when a Russian adventurer named Boris Skossyreff attempted to install himself as King of Andorra but was ousted, after which a detachment of the French military was posted in the country to safeguard it, later also from the effects of the Spanish Civil War. Andorra subsequently accepted refugees from both sides of the conflict, and many became residents, helping to boost the post-war economy as it embraced tourism and the tax-free shopping that made the country rich.

Neutrality during World War Two also laid the foundations for the banking sector that has boomed ever since, especially focusing on wealth management, as Andorra is also a low-tax country that attracts a strictly controlled number of foreign residents, offering them lower tax levels than the bulk of European countries. The country is not a member of the European Union, but it does work closely with it and is a member state of the United Nations and the Council of Europe. It even uses the Euro as its official currency.

The local government has generally done a good job of managing Andorra, and their plan for the future (yes, a handful of countries do seem to have such a thing, see also Singapore), includes allowing in a selected number of foreign residents. Mostly high net worth individuals attracted by low tax rates, they are subject to the kind of rigorous checks that increasingly separate Andorra from former/present tax havens such as Switzerland and Monaco.

In principle, the intention is to cap the population at 125,000, to keep it in line with available water resources, but even so this means a growth of over 50% from the current community, which has tripled over the past half century. Previous immigration took the form of people working in the services sectors – mostly retail and tourism – but now many outside workers live just across the border in neighbouring Spanish towns, with the precious land reserved for wealthier residents.
The latter may not reside in Andorra permanently, but are obliged to do so for at least a part of the year, and their coming has sparked a dynamic property market that focuses primarily on luxurious apartments in and around the little capital of Andorra la Vella, which sprawls pleasantly along what is more like a large gorge than a valley. While global warming may put the ski resorts at risk, the HNW resident influx, paired with the provision of luxury services, wealth management, banking and hospitality, is currently set to drive the economy for some time to come.

A Catalan Nation

While there is much ado about Catalan independence in Barcelona and surroundings, it is not Catalunya but Andorra that is the first Catalan state. The Romanised Iberian inhabitants of Andorra over time became Catalan speakers, with a Catalan-based Pyrenean culture. Today, however, roughly 20% of the population is Spanish and over 10% Portuguese, who form the backbone of the labour force.
They service millions of visitors to spa hotels, ski resorts and day-time shopping, most of whom arrive by car from France and Spain. Andorra can also be reached by train from these two countries after which coaches take you into the little landlocked country, while a relatively new airport at La Seu d’Urgell provides a more direct link. Most visitors from afar, however, fly into larger airports such as those of Barcelona, Toulouse and Zaragoza, and drive hire cars through the Pyrenees and into Andorra.

The country’s popularity among wealthy residents further adds to what makes the capital town of Andorra la Vella a shopping paradise. This charming town is the ideal place to buy jewellery, watches, perfumery, designer brands and, if you can wing-it, luxury cars. Real estate is expensive in Andorra, but generally looks smart and carries the sense of cleanliness and organisation that pervades this microstate. In fact, Andorra la Vella has a decidedly Swiss look about it – a tantalising hint at what Spain might be like if it were run by German speakers.

Andorra may have started out as the kind of forgotten principality from a fairy tale story, and it continues to be overlooked by mainstream attention, but today it is an increasingly internationally engaged country that builds upon the wealth attained from the 1970s onwards to consolidate its position as a very European state with much to offer. Catalan merges with Spanish, French, Portuguese and English on its streets, blending a mix of rural idyll with an increasingly sophisticated economy and urban feel. Andorra may have awoken from its centuries-like slumber, yet it still feels like a little fairy land within the 21st century.