Company formation in Andorra
We help businesses and individuals to set up their company in Andorra. Forming a company in Andorra is a legal process that requires the right assistance by local lawyers and tax specialists. Andorra Consultants has over 15 years of experience in all steps of company formation in Andorra.
Multiple legal changes in recent years have made Andorra by now the most attractive jurisdiction for company formation across Europe.
What is required to form a company in Andorra?
It is important to mention that there are no offshore entities in Andorra. All trading companies must have a registered office, however for small companies the office may be in a private apartment or business center.
There is no system of nominee directors as such in Andorra and each company requires a proper director, however the director may be a non-resident. So it is technically possible to be the owner and director of an Andorran company without physically living there. Appointing a nominee director in Andorra is technically possible, but given the legal responsibilities that the nominee has it is rather uncommon.
Nevertheless the company normally requires a certain level of presence in the country. If a non-resident director is managing the company we strongly suggest to have a local employee even it part-time. However these substance requirements in Andorra depend largely on your activities and the countries you are trading with. We may happily advise you further on this.
Entity types and shareholders
Entity types and shareholders
The following entity types exist currently in Andorra:
1. Limited Liability Company – Societat Limitada (S.L.)
This type of company is mostly used for small and medium sized businesses with one or a limited number of shareholders. The minimum capital requirement is 3000 EUR. There may be one shareholder only (S.L.U.).
2. Anonymous Limited Liability Company – Societat Anònima (S.A.)
This type of company is meant for larger enterprises with multiple shareholders and larger initial capital such as holding and financing companies. They have a minimum capital requirement of 60000 EUR. There may be one shareholder only (S.A.U.).
There is no publicly traded entities in Andorra as such with the non-existence of a stock exchange in Andorra. Theoretically companies could however be listed on foreign stock exchanges.
Since the reforms in 2012 foreign individual may legally own 100% of a trading company or holding company in Andorra, however you must go through previous authorization process with the Andorran government if there is any non-resident shareholders of 10% or more of the company’s capital.
Andorra Consultants – we help companies assess their possibilities in Andorra and choose a new direction which utilizes their resources most productively combined with the local tax + legal advantages.
What are the benefits of creating a company in Andorra?
Multinational and large companies typically are motivated by the 2-10% corporate tax rate and the special holding regime that the low-tax jurisdiction Andorra has to offer. However also many small companies decide to take this step not just to optimize their tax base of their international business activity, but also because the business owners and main shareholders decide on a residence in the Principality of Andorra. The unique advantages that you may enjoy when combining your company formation with a shareholder tax residence in Andorra are further explained here.
The following summarizes the reasons to form a company in Andorra:
- Low corporate taxation between 2-10% depending on the activity
- Legal security with a tax model that is following OECD and BEPS requirements in terms of compliance, substance requirements and anti-money laundering standards
- Multiple DTA agreements (double tax agreements) in place or in planning with most European jurisdictions
- Low-cost destination in terms of labor costs (minimum wage at 950 EUR, social security contributions between 13.5- 14% for employers and office space leases extremely affordable in comparison with neighboring Spain and France
- Special holding entities available for those with important international company participations in entities in Europe and other countries with low withholding taxes despite the absence of a DTA
- Non-EU member with an EU association agreement on the way.
- Special agreements with the Schengen area with visa benefits for non-EU member directors and shareholders
Do you have a proper business plan?
Incorporating a company in Andorra for many means also selling to the local market. Andorra has different market dynamics and consumer profiles. It is fundamental to look at these issues before setting up your business geared towards local consumers and companies.
This is the most worrying part for most clients going through the set up of their operations and business in Andorra. We include in our company formation package the entire assistance in bank account opening including a proper bank introduction and preparation of the documentation related to compliance. Further we help ease the issues of requesting a special license for your opening such as certificates for sanitary installations or operating a special regime tax company such as international trading or financial management companies.
Do you require financing for your new venture? We have in-house financial analysts to make projections and accompany you in your journey towards a line of funding and credit with one of the local banking institutions.
Important documents required
Note that forming your company in Andorra requires a due-dilligence process with the government that will check all your credentials and background. This is meant to avoid and prevent any money-laundering issues as Andorra is following the path of complete transparency. The following documents will be required for the process:
- Criminal Records I. – Your criminal records / police records certificate of your country of residence
- Criminal Records II. – If you were born in a different country than the one of your current residence then we also need your criminal records / police records certificate of your country of birth
- Copy of your passport – Please bring your passport on your first visit to Andorra or have it copied and notarized in your country
- NOTE: – Any foreign documents have to be notarized with an apostille of The Hague
Competitor research & analysis
Do you require a market analysis previous to setting up your business? Ask our consultants on company market research.
Can I buy a ready-made or shelf-company?
Technically this would be possible however the efforts of changing the bylaws of an existing company as well as going through the process of foreign investment are the same as if you would incorporate a new company in Andorra. So in most cases unless you are buying an existing company with the exact same activity it does not make much sense in terms of time and resources required.
We look forward to be consulting you on your company formation project. For some more details on Andorra’s foreign direct investment law you may also consult www.ccis.ad. However given the expired information we strongly suggest to consult with us.