Andorra, small independent European coprincipality situated among the southern peaks of the Pyrenees Mountains and bounded by France to the north and east and by Spain to the south and west. Andorra’s official language is Catalan (Spanish and French are also spoken); its institutions are based in Catalonian law, and a large proportion of the Spanish immigrants (or their descendants) in Andorra are Catalan.

It is one of the smallest states in Europe. The capital is Andorra la Vella. Almost nine-tenths of the population is classified as urban, and half of residents are foreign nationals, mainly from Spain, France, and Portugal.

Because of the lack of customs duties and low or nonexistent taxes, Andorra has become an important international centre of retail trade that has attracted millions of shoppers from all over Europe with its duty-free imported consumer goods, including alcoholic beverages, electronic devices, tobacco, and clothing. Tourism is another of Andorra’s leading industries, and the area has excellent opportunities for winter sports. The construction industry flourished in response to the increase in tourism. The banking sector is also economically significant.

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