The Vuelta a España goes to Andorra today and pleasant weather awaits, 26°C and sunshine. As a ski resort in the Pyrenees it’s an obvious destination for a race with climbs and hotels but there’s a wider ecosystem for much of the pro peloton here. The micro-state has become home to plenty and this is creating a self-fulfilling phenomenon attracting more riders and in turn physios, nutritionists, mechanics, financial advisors and more.
Long before today’s nation states, Andorra was one among many counties, kingdoms, provinces and other divisions of land. The oddity is that it has persisted while all the rest have been folded into what we know as France and Spain today. Being an enclave in the mountains has helped, there few resources to claim and it has not been strategic either, there are easier passages across the Pyrenees to the west and east. Another factor was that in 1278 it became a shared entity with the Count of Foix (in France today) and the Bishop of La Seu d’Urgell (in Spain) appointed as co-princes of the state and the borders set then have barely been changed; today the Bishop of La Seu d’Urgell is still the co-head of state, only now alongside the French President. In the 1990s locals got more of a say with their own parliament.
The Pyrenees were long exploited by smugglers, moving contraband or more recently trying to dodge tariffs and duties. Andorra got into this arbitrage by more legitimate means. Local tobacco cultivation which continues to this day made it a place for smokers from Spain and France to stock up, then low taxes made it a budget destination. Smokers could enjoy a day trip for skiing or thermal baths and return with bulk purchases of cigarettes. This expanded into a wider retail offer for washing machines, TVs and other big ticket items – bikes too – sold at unbeatable prices because they were tax-free, coupled with the incentive of low duties on fuel meaning the drive from large population centres like Barcelona, Toulouse, Zaragoza or Pau wasn’t as costly either. Some of this retail took a hit because of the internet. Consumers were able to shop around for low prices, benefit from warehousing efficiency and have goods delivered to them. But to this day the VAT rate is 4.5%, while it is 21% in Spain and 20% in France. A box of cigarettes is about €40 compared to €140 in France.
Alas one cycling angle is, or hopefully was, that Andorra’s easygoing retailing apparently extended to pharmaceuticals, including the over-the-counter sale of recombinant-EPO. Just walk in, pay and walk out apparently but this is hard to substantiate today; it could equally have been the result of a crooked pharmacist. Either way it was apparently a destination around the turn of the century for some looking to fill up their fridges with vials of EPO, and save on VAT while doing so.
Onto the more substantial and bona fide angle and Andorra has become a tax haven for riders. In 2006 Joaquim “Purito” Rodriguez moved to the principality. He’s a Catalan by birth so it was close by. He seemed to become an evangelist who attracted others. Or at least the tax rate did the talking. Today many riders are attracted by this, a flat 10% rate applies to income above €40,000. For comparison earn over €60,000 in Spain and the rate is 45% which explains why Girona isn’t the draw it used to be; over the border in France it’s about 33%. The VAT rate matters too as riders billing for services only need add 4.5%.
Another draw is residency. Work visas can be hard to get for non-Europeans but Andorra will grant a VIP residency visa to a cyclist brandishing a pro contract and willing to lodge a €50,000 bond for two years. This simplicity is a big draw for some, perhaps as much or more than the tax rate as getting a visa can be time consuming.
Housing is another attraction. You can rent a three bedroom apartment – one room for bikes and a home gym – for under €2,000 a month. If you have to ask how much this might cost in Monaco then you probably can’t afford it; but €20,000 per month is normal. Or see why many a Monaco pro opts to rent a studio and their home gym is the balcony.
Low taxes, easy visas and housing. The downside to all this is being sequestered in the middle of the mountains. A sprinter just can’t find many flat roads to train on but even a climber doesn’t have it easy either. The Pyrenees are damp, and with the lowest altitude in the principality at 900m it is cold for three out of the four seasons. So whatever the tax saving, the practical difficulties are legion with airport connections further away. Plus it has the dull feel of a retail outlet and ski resort. The solution to this for many is to actually live in Girona while keeping residency in Andorra where being present for 90 days is sufficient. Plus nobody seems to be counting.
If you know of plenty of cyclists who are resident in Andorra, it’s also become home to many others. Indeed the wintry weather is less of a problem for winter sports athletes of course, but those who do motor sports, trail running or or take part in indoor sports have made it home. Plus a growing “influencer”, Youtuber and gamer streaming quotient who just need a cosy apartment rather than the outdoors, indeed the Andorran government is making a big push in e-sports. All this though means there’s a wider ecosystem. Physios, masseurs, nutritionists for athletes, accountants, banking and legal advice for others. There’s an economy growing up around the service of the pro cyclists and others.
Building on this the principality wants to establish itself as as sports and well-being destination with facilities for rehab, hotels with altitude rooms – sleep at 1,500m but adjust the dial to simulate 2,700m – and more.
Conclusion
Once just a drab high altitude retail outlet, Andorra’s become home for many pro cyclists although plenty will say it’s still a drab place. Yes plenty are attracted by the tax rate but housing and visa requirements underpin this, Monaco’s rental rates reserve it for an elite. It’s a regular bidder for the Vuelta and Tour, able to supply hotel accommodation for the convoy but increasingly able to afford it. If the Vuelta was here last year and is back today, there’s every chance it features next year or soon again in the Tour too.