Create a holding company in Andorra

Are you looking for solutions to optimize your company’s taxation? The creation of a holding company in Andorra may well be the key. Our business center, dedicated to offering you tailor-made services, accompanies each client throughout their efforts to maximize revenues and find the best solutions. Find out how our team of experts can help you set up and manage your holding company in Andorra, while benefiting from advantageous taxation.

Why choose to set up a holding company in Andorra?

A holding company in Andorra, of which you are 100% the owner from the moment it is created, offers a strategic way to generate profits. By transferring all or part of the shares of your French companies to an Andorran holding company, you can benefit from the dividends of the current year and those of the previous ones. Thanks to double taxation agreements, the parent-subsidiary regime can reduce withholding tax by only 5% compared to 30% in France.

The tax advantages in Andorra are particularly attractive: dividends are tax-free, offering a maximum return, even if you do not reside in the country. Our gestoria based in Andorra ensures the implementation of the device and guarantees the legality of the project in France.

Tax advantages in Andorra:

Andorran taxation stands out in Europe with advantages such as no dividend tax, minimal administrative pressure, no Real Estate Wealth Tax (IFI), and a corporate income tax capped at 10%. Other advantages include competitive payroll and employer charges, the absence of VAT, and the possibility of becoming an Andorran tax resident by setting up a company.

What are the tax advantages of a holding company in Andorra?

Andorra offers a particularly advantageous tax regime for companies and holding companies, including:

• A relatively low corporate income tax rate, capped at 10%.
• The total absence of taxes on dividends.
• There is no notion of misuse of company assets, simplifying the tax framework.
• Competitive payroll and employer costs, set at 6.5% and 15.5% respectively.
• There is no Company Vehicle Tax (TVS), carbon tax or ecological penalty, further reducing the tax burden for companies established in Andorra.

How does the Andorran holding company work?

A holding company is a financial company that brings together partners or shareholders under a legal entity. Creating a holding company therefore means bringing together at least two companies around a parent company called a “holding company”, holding all or part of the capital of the subsidiary company called a “subsidiary”

The establishment of a holding company in Andorra offers a major tax advantage: the exemption of dividends and capital gains from subsidiaries or affiliated companies. In contrast to the general corporate tax exemption scheme, there is no minimum shareholding or specific holding period.

However, this tax exemption is subject to certain conditions:

1. The company’s corporate purpose must be exclusively the management and holding of shareholdings in companies, whether resident or non-resident for tax purposes in Andorra.
2. The companies benefiting from the investment must be subject to a minimum tax of 4% or be resident in a country that has signed a Double Taxation Agreement (DTA) with Andorra.

In general, Andorran holding companies benefit from zero taxation, thus offering an attractive tax framework.

Who may be interested in a holding company in Andorra?

The operating regime is particularly attractive to the following profiles:

• “Family offices” looking to establish their wealth management company.
• Large private equity firms wishing to benefit from the exemption with a low percentage of participation.
• High-net-worth individuals residing in Andorra who wish to channel their investments through a holding company.

How can I benefit from the holding company regime?

Interested taxpayers must apply to the Andorran tax authorities and identify it in the annual accounts. For any assistance in this regard, please contact us via the contact button at the end of this article.

How to set up a holding company in Andorra?

The creation of a holding company in Andorra is administratively accessible. Steps include:

1. Deposit the foreign investment in Andorra (if the incorporator is a non-resident).
2. Request the reservation of the company name.
3. Open a bank account to obtain the certificate of payment of the share capital.
4. Incorporate the company in the presence of an Andorran notary.

For Andorran residents, these steps will make the holding company practically operational. However, for non-residents, considerations on the effective seat of management and international rules may apply.

Can I own a holding company in Andorra while living in another country and not pay taxes?

Although setting up a holding company in Andorra is possible for non-residents, it can lead to tax complications in their place of residence. The company’s actual residency, Controlled Foreign Corporations (CFC) rules, and international tax transparency may result in tax claims.

We recommend that non-residents set up a holding company in Andorra only if they can meet the following criteria:

• Economic substance: The holding company should have an office and employees, ideally asset managers or skilled professionals.
• Efficient management: Directors must reside in Andorra or travel to the country for meetings.
• Visibility: the company must have a presence in Andorra with a phone number, a website, and an image that confirms the location.

Why choose a support?

Setting up a holding company in Andorra can be complex, especially without the necessary knowledge of local laws, international taxation and the Catalan language. Clickand, our business centre, puts its experience at your disposal to accompany you from the beginning to the signature before a notary in Andorra and your country of residence. Our experts take care of all the steps, allowing you to focus on your activities with peace of mind.

Our Services for the Incorporation of a Holding Company in Andorra:

• Legal Services: Our tax experts accompany you in France or elsewhere for all legal formalities.
• International Tax Planning: Advice on how to reside in one country, offer services in another and be taxed in a third country.
• Non-residents in Andorra: Possibility of setting up a holding company in Andorran territory without residing there, benefiting from the same tax advantages as local companies.

Setting up a holding company in Andorra can be the right choice to optimise your tax system while benefiting from personalised support. Contact us now to get more information and start your project with confidence.

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