And if they want to stay in Europe, there are only two true and stable tax havens left which offer an income tax free existence - Monaco and Andorra.



Of the two tax havens, Monaco is the better known.

Monaco has an image of glamour and sophistication the world over, and is famous for the Grand Prix around the streets of Monte Carlo.

Located on the French Riviera, Monaco has a warm Mediterranean climate, and some of the best known hotels in the world. In contrast Andorra, situated in the Pyrenees, is best known for her ski resorts and ten million tourists visit Andorra between December and end April for a ski holiday.

But Andorra does enjoy similar tax advantages to Monaco, with no income tax and banking privacy, affording those looking to reduce their tax burden in both jurisdictions.

Prices for property in Monaco are far higher than those for Andorra. In Monaco a million Euros will just about buy a one bedroom apartment, a good two bedroom apartment in areas like La Massana can be found for a third of the cost of a one bedroom Monaco apartment.

Buying a property in Andorra is often seen as a route to residency, which entitles people to live in Andorra and benefit from her tax haven status. Surprisingly perhaps for a tax haven, mortgages for a property are as available as many European countries, with rates around the same level. Up to eighty per cent of a property's value is often agreed by the banks in Andorra.

To obtain residency in Andorra, applications need to be submitted in Catalan. A notarised copy of the applicants passport, birth certificate and a certificate of good conduct from the home country are submitted at the same time. According to a local travel guide residency normally takes between three and six months to be approved.

Once residency is granted, residents are supposed to spend six months a year in Andorra, but this isn't policed.

One of the drawbacks for those looking to become a resident in a tax haven when considering Andorra has been that the country has no airport of its own, and is unlikely to have in the future given that it is located in the Pyrenees. The nearest airports are Barcelona and Toulouse.

Recent improvements in the road from Barcelona to Andorra though have cut the travelling time by some thirty minutes to two hours fifteen minutes.