The path of entrepreneurship is often full of obstacles. Creating a company in Andorra is a quite peculiar process compared to other European countries and requires good professionals to process it safely and efficiently. In this article we will summarize each and every one of the necessary procedures for the constitution of an Andorran society, although it depends on each particular case.
First of all, clarify that although a non-resident can effectively establish an Andorran company with 100% of the share capital, in this article we will assume the scenario in which an Andorran resident want to create a new business.
If you want to know the process for obtaining the residence permit as well as its requirements and different types, do not miss our article on residence in Andorra.
Applying for the companies corporate name is similar to any other European country. The Govern d’Andorra provides a form to validate the company name and thus obtain a successful first request.
Here we can use the tool:
The company name also requires the corporate purpose of the company, that's why we always recommend consulting with professional advisory in case of not having basic knowledge on the issue.
As for the necessary time, this first step should never be more than two weeks, although in some extreme cases it can be extended up to thirty days.
Foreign investment file
This step is not necessary if you are a resident (as we have assumed), so we will not discuss it in this article. If you are interested in knowing both the types of residences established in the Andorran legislation and everything related to the foreign investment file, do not miss the next article about residency.
The next of the basic requirements as in any other country, is to make the effective deposit of capital. For this we will have to go to any of the five banking entities of the country, also complying with the banking compliance requirements of each entity. Of course, you have the help of our professionals, already experienced in this kind of documentation.
The minimum capital for a private limited company is €3,000, while that of a public limited company is €60,000.
It is worth mentioning that the compliance process depends exclusively on the Bank, and will vary depending on the type of company and its activity, as well as the current condition of the partner or partners.
Drafting of company bylaws
Depending on the companies conditions, some bylaws or others will be drafted. The bylaws must be written before the constitution before a notary.
Constitution before a Notary
By means of a deed and with the company name and certificate of the deposit of the share capital, we can now proceed with the previous step to keep the company open: go to the notary.
Before the notary public deed is registered and incorporated into the company registry, thus empowering the company. However, this does not imply the authorization of the same, since commercial authorization is still needed (approximately one month procedure).
The opening of the companies trade is requested. All companies that carry out an activity, industrial or services must be registered in the commercial register. At this time you must have the address of your safe and specified company, an electrical bulletin of the registered office (of the electricity company in charge of the premises, in Andorra is FEDA) and a current security contract with a fire extinguisher at the address of your company.
Finally, we would have to register the Social Security (Class) to the administrators and also to their employees if they apply and request two digital files that, although they are not necessary, are very useful for various management tasks in the company, due to savings in time and travel:
- Digital certificate request in Class.
- Digital signature application in Tribute.
Impost de Societats (Corporate tax)
The general rate of corporate tax on business in Andorra is 10%, although under certain circumstances bonuses can be given. However, dividends obtained through an Andorran company are not taxed in personal income tax, which is a great advantage.
The Andorran system of taxation stands out for being approved and therefore similar to those applied in European countries but of low physical burden due to its low nominal and effective rates. If you want to know more about the taxes applied in this small country, the corporate tax and its details visit our article on the andorran tax framework.
If you want to move or move your business to Andorra, or get more information about Andorra, both about the jurisdiction and about life and day-to-day, do not hesitate to contact us here. At Andorra Insiders we collaborate with the best lawyers, prosecutors and accountants in the country, experts both nationally and internationally from the Principality of Andorra. We solve your doubts, personalize and individualize your case and offer you comprehensive support.