Set-up a business in Andorra

Set-up a business in Andorra

The macroeconomic framework, a non-confiscatory tax system, economic activities focused on services, access to technological innovation, flexibility in regulatory adaption, the proper functioning of political institutions, stability, the educational model, a social inclusion model and the environmental sustainability make up a set of solid attributes for the proper functioning of companies.

One way to invest in Andorra is by creating your own company, here you will find all the details you need to know.

1. Why create a Company in Andorra?

• Legal security, institutional and political stability.
• A stable, healthy and solvent financial system, adapted to all international regulations.
• Attractive taxation: A maximum of 10% corporate income tax, indirect general tax (equivalent to VAT) of 4.5%, reduced annual fees and costs. Non-existence of taxes on wealth, inheritance and donations.
• Agreements to avoid double taxation with various neighboring countries.
• Non-application of withholdings on dividends distributed by Andorran companies.
• Reduced labor costs and social contributions: 15.5% paid by the company and 6.5% paid by the worker.
• Location and infrastructures: Located between France and Spain, the closest airports and high-speed train stations are approximately two hours away. Likewise, it is expected that by the end of the year there will be regular flights from La Seu d’Urgell airport, located just 27 km from Andorra la Vella.

2. Legal forms of companies in Andorra

The S.L. “Sociedad Limitada”, a limited liability company with a minimum capital of 3,000 euros.

The S.A. “Sociedad Anónima”, a model of a public limited company with a minimum capital of 60.000 euros

3. Steps to follow to create a company in Andorra

1. Application for the Administrative Identification Number.

Form to be submitted to the Government of Andorra so that the person who requests it is given an identification number necessary to carry out any procedure before the administration. Approval period: One or two days.

2. Reservation of company name.

Form to be submitted to the Government of Andorra in which three different names must be chosen in order of preference and precisely define the business activity. The approximate period for its approval is one week from its presentation.

3. Authorization of foreign investment.

Each non-resident foreign shareholder or partner with a social participation greater than 10% of the capital must request prior authorization from the Government of Andorra for the investment. It is an extensive form where the experience and capacities of the partner or shareholder, the investments, activities and expected cash flows of the future company must be specified, among others. This process takes about a month to be approved.

4. Pre-opening of the company’s bank account.

Contact the bank where the account of the company will be domiciled and pay the total amount of the capital stock. The bank will issue a certificate that must be presented at the Notary at the time the company is incorporated. This account will not be operational yet.

The bank to carry out this procedure will previously request the resolution of the company name, the resolution of foreign investment and the apostilled or legalized criminal record.

You must allow between a week and up to 4 weeks to have your account pre-authorized.

5. Public deed of incorporation before a Notary.

Drafting of the company’s bylaws and raising he public deed of incorporation of the company, for its subsequent registration in the Companies Registry.
The maximum duration of the registration process is two weeks.

6. Registration in the Tax Registry and obtention of the tax identification code (Tax Registration Number).

7. Business license application before the Town Hall (Comú).

In the Town Hall where the business is located, request the opening of the business and the reservation of the business name. To do this, a registered address for the Company is mandatory and an electrical bulletin and a current contract for a fire extinguisher must be kept for the said address.

8. Request the bank to enable the operation of the company’s bank account.

4. Documentation required for the creation of a company in Andorra

In the case of individuals:

• Criminal record certificate of the country of origin or of the place of last residence with the Hague Apostille or legalized, and if applicable translated.
• Copy of the passport with the Hague apostille or legalized at an Andorran Notary.
• Business plan, investment strategy and curriculum vitae.

In the case of companies:

• Photocopy of the articles of incorporation with the Hague apostille or legalized.
• Photocopy of the passport of the representatives or proxies of the company with the Hague apostille or legalized.
• Photocopy of the deed of powers of the representatives or proxies of the company with the Hague apostille or legalized.
• Criminal record certificate of the country of origin and of the last residence of the representatives or proxies of the company with the Hague apostille or legalized.
• Certification of the Board that agrees the foreign investment requested.
• Certificate of the Mercantile Registry + Statutes + Act of beneficial ownership.