Andorra company formation
Welcome to our comprehensive guide to incorporate your company in Andorra, a jewel between France and Spain, popular with entrepreneurs for its advantageous taxation and favourable environment. If the idea of setting up your own company in Andorra appeals to you, this guide is your perfect companion.
Why Choose Andorra for Your Business?
The Principality of Andorra offers a multitude of advantages that make this small state a destination of choice for entrepreneurs.
Tax benefits
Andorra offers an attractive tax regime with a corporate tax capped at 10%, which can be reduced to 2% in some cases. In addition, VAT, or IGI in Andorra, is at 4.5%, the lowest rate in Europe.
Advantageous Wage Costs and Social Contributions
Wage costs and social security contributions in Andorra are significantly lower than in many European countries, making it easier to hire and reduce costs for entrepreneurs.
Exceptional Quality of Life
Andorra offers a remarkable quality of life with a preserved natural environment, a quality healthcare system, and a diversified education system. It is also one of the countries with the longest life expectancy in the world.
The different types of companies in Andorra
In Andorra, there are several types of companies that can be created. The most common are the Limited Company (SL), the Public Limited Company (SA), and the Collective Company.
The Limited Company (SL)
Equivalent to the LLC, it is often chosen by small businesses. To set up an SL, a minimum statutory capital of €3,000 is required. If run by a single person, it becomes a Single-Member Limited Company (SLU).
The public limited company (SA)
Preferred by large companies, it requires a minimum capital of 60,000 euros. A single person can set up a public limited company, called a single-member public limited company (SAU).
The Collective Company
In this type of company, the capital is shared between the partners, with conditions of creation similar to the SL and the SA.
Read the guide to legal statuses
Setting up a Holding Company in Andorra
The Principality is also attractive for the creation of holding companies due to its favourable tax system. Setting up a holding company in a stable jurisdiction offers advantages, and for expats, it can make it easier to obtain tax residency in Andorra.
5 Steps to Setting Up a Company in Andorra
Setting up a company in Andorra involves several key steps.
- Request for Company Name: Choose three names in order of preference. The government will validate one name within 10 days.
- Investment Authorization: Each non-resident shareholder must obtain prior authorization for foreign investment, which lasts approximately 10 to 15 days.
- Pre-opening of the Bank Account: Open a temporary account in an Andorran bank and deposit the statutory capital. The duration varies from one to four weeks.
- Constitution and Registration: Formalize the articles of association before an Andorran notary and register the company in the Commercial Register.
- Opening of Trade: Apply for the opening of the business, with the need to determine the company’s registered office and obtain the electrical installation certificate. The opening of trade only concerns commercial companies, not holding companies.
Corporate Bonds in Andorra
Once the company is set up, there are obligations that must be met, including the preparation of accounting documents and the payment of social security contributions of up to 22%.
Expatriation in Andorra: becoming an Andorran resident
The creation of a company in Andorra offers the possibility of becoming resident, especially for managers who own at least 21% of the shares. Running a local business from abroad is also an option, but this requires a thorough analysis of the personal situation.
Do not hesitate to request our services at Clickand to make the creation of your company in Andorra a reality and facilitate your expatriation in this privileged location from a tax point of view. We are here to support you every step of the way.