Create a company in Andorra: advantages and requirements

¿Por qué abrir un negocio en Andorra?

Low taxation

The taxes maximum totals paid in Andorra never usually reach 10% of the rent, regardless of their type and origin

Connection

With a 100% fiber optic coverage and mobile 98%, and a future habilitation of two airports and a heliport

Location

Located in the Pyrenees between France and Spain, Andorra is close to all of Europe, and especially close to Barcelona and Tolouse

Covenants

The Principality has bilateral agreements with many countries, highlighting among them the 8 double taxation agreements (CDI)

Low quotes

Social Security competent, reliable and solvent, and one of the best sanitary systems in the world

Tax advantages of doing business in Andorra

Legal forms of companies in Andorra

  • Minimum share capital of € 3,000
  • Small and medium businesses
  • Minimum share capital of € 60,000
  •  Large platforms and companies

Proceso para constituir una sociedad

Done, your company already operates normally

1. Application for company name

Applying for the companies corporate name is similar to any other European country. The Government of Andorra provides a form to validate the company name and thus obtain a successful first request. Then we can use it:

2. Foreign Investment File

This step is not necessary if you are a resident. As normally before creating the company the client is not a resident, we must request the Government to allow us to invest as foreigners. For this, a certificate of criminal record is required, for the prevention of money laundering.

3. Bank account and share capital

The following of the basic requirements as in any other country, is create a bank account of a company in constitution and make the effective deposit of capital. For this we will have to go to any of the five banks in the country, also complying with the requirements of banking compliance of each entity. Of course, they have the help of our professionals, already experienced in this kind of documentation.

It is worth mentioning that the compliance process depends exclusively on the bank in question, and will vary depending on the type of company and its activity, as well as the current condition of the partner or partners.

4. Public deed and signature before a notary

Prior to the incorporation before a notary, the drafting of the public deed and statutes of the empresa, que variarán según las características de la misma. Una vez redactada la escritura y con la denominación social y el certificado del depósito del capital social se puede proceder al paso previo para tener la empresa abierta: go to the notary.

5. Registration in the Companies Registry

Once signed, the notary registers the public deed and incorporates it into the Companies Registry within a maximum period of 20 days, thus empowering the company. However, this does not imply the authorization of the same, since the commercial authorization is still required (process of approximately one month).

6. Deposit in the AFA

While all the procedures of the company are carried out and to advance with the self-employment residence permit, the deposit of the deposit of € 15,000 in the Andorran Financial Authority, which will be returned in full after the cancellation of the same permit has been processed.

7. NRT and Registry of Commerce and Industry

I know request the opening of the company's trade. All companies that carry out an industrial or service activity must be registered in the trade registry. By this time you must have the address of your company safe and specified.

8. Registration in the CASS and other procedures

Finally we would have to register with Social Security (CASS) to the administrators and also to their employees if it applies and request some digital files that are very useful for various management tasks in the company. Other procedures are also carried out if required.

Trade Requirements

  • Tradename
  • Local of at least 20m2
  • Electrical installation
  • Fire extinguisher installation and maintenance

Required documentation

  • Criminal record and valid passport
  • Business plan and investment strategy
  • (*) For the business plan and strategy we provide all the necessary help for compliance

Requirements to maintain the business and substance

  • Registered office in Andorra
  • Administrator or resident employee.
  • Prepare quarterly and annual tax returns 
  • Pay municipal taxes (€ 800 per year approx.)
  • Actual activity with operations and transactions
  • At least one physical office (or local) employee
  • Manage operations and decisions from Andorra
  • Commercial premises: office, home, offices, etc. (from € 400 per month approx.)

Substance factor in international business

  • Physical and registered office (not just postal address)
  • Administrative meetings within the Principality
  • Principal active bank account in Andorra
  • Accounting and accounts management in the country
  • Usual operating expenses in Andorra
Requisitos para abrir una empresa en Andorra

What is the economic substance?

In 2013, the Organization for Economic Cooperation and Development (OECD) sought to combat tax avoidance practices at the international level. Specifically reduce if not eliminate the Base Erosion and Profit Shifting or BEPS for its acronym in English. With this term it designates the tax planning strategies used by multinational companies to take advantage of discrepancies, gaps, unwanted mechanisms and inconsistencies in national tax systems and transfer their benefits to countries with little or no taxation.

For this they launched the bEPS project at the international level and a report with 15 actions to be taken to combat this problem, seeking to reduce tax fraud. As well, one of the measures of this project it is precisely "improving the coherence of international tax standards, reinforcing its focus on economic substance and guaranteeing a more transparent fiscal environment", thus making the concept of substance a requirement to operate an international business.

Approximate times and costs

Costs and administrative fees: € 2,000-2,500 approx.

Agency fees: from approx. € 4,000, on request.

Estimated time: between 2 and 3 months

Update to 2021

As an update for 2021, we can highlight that, despite the world situation current due to the pandemic, the Principality continues to operate normally a la hora de tramitar el traspaso de negocios a Andorra y de atraer nuevos residentes, de tal manera que el tiempo requerido para realizar todo el proceso sigue siendo aproximadamente el mismo: entre dos y tres meses.

Frequent questions

❓How much does it cost in money and time to start a company in Andorra?

Although of course it depends on the specific business, opening a company in Andorra usually costs about € 4,000 in fees + € 2,600 in fees and costs + the share capital (€ 3,000 or € 60,000 minimum).

❓Is it possible to create a company in Andorra and reside in Spain?

It is totally viable and legal. The company would pay taxes in Andorra, and the businessman would be subject to Spanish regulations by maintaining his tax residence in Spain, without benefiting from the Andorran tax advantages.

❓How much does a company pay in Andorra?

In general, 10% on net benefits and approximately <€ 1,000 per year for maintenance. Dividends extracted are also exempt from Andorran personal income tax.

❓What are the requirements for international business?

In general, demonstrate that the main activity is carried out: main bank account, accounting management, administrative meetings, registered offices, etc.