Andorra, a small but economically stable principality nestled between France and Spain, has become an attractive destination for international entrepreneurs and investors seeking tax efficiency and business-friendly regulations. Known for its low corporate tax rates, political stability, and strategic location in Europe, Andorra offers a favorable environment for company formation, especially for businesses in finance, consulting, digital services, and trading.
This Frequently Asked Questions (FAQ) page provides clear, concise answers to the most common inquiries about forming a company in Andorra. Whether you’re looking to establish a private limited company (Societat Limitada, or SL), relocate your digital business, or set up a holding company, this guide will walk you through the basics of registration, legal requirements, and compliance procedures.
Foreign investors can benefit from Andorra’s transparent regulatory framework, low tax burden (corporate tax capped at 10%), and growing infrastructure for modern businesses. However, setting up a company in Andorra involves several steps, including obtaining foreign investment approval, registering with local authorities, and meeting residency or directorship conditions.
With no exchange controls, a stable banking system, and growing recognition as a legitimate low-tax jurisdiction, Andorra is ideal for those seeking a long-term business base in Europe with favorable fiscal conditions. This FAQ aims to simplify the process by answering key questions about cost, timing, ownership rules, required documentation, and ongoing compliance.
If you’re considering incorporating a company in Andorra, this page will help you understand the fundamentals and prepare for a smooth and legally compliant setup. Use the questions below as your starting point to explore one of Europe’s most unique and tax-friendly business jurisdictions.
Frequently Asked Questions About Andorra Company Setup
This FAQ provides key insights into Andorra company formation for entrepreneurs, investors, and digital nomads looking to benefit from the country’s low-tax and business-friendly environment. Whether you’re planning to form a private limited company (SL), establish a holding company, or relocate a tech business, this guide answers the most common questions about the process. Learn about foreign investment requirements, residency options, tax obligations, and setup costs. With its strategic European location, favorable tax regime, and political stability, Andorra is an ideal choice for those seeking efficient company incorporation and long-term financial advantages.
1. How do I start a company in Andorra as a foreigner?
To start a company in Andorra as a foreigner, you must first apply for foreign investment approval, then register a private limited company (Societat Limitada, SL) with the Andorran government. You’ll also need a registered office, a local bank account, and may need to apply for residency depending on the business type.
2. Can foreigners own 100% of a company in Andorra?
Yes, foreigners can own 100% of a company in Andorra. However, foreign investment approval is required before incorporation, and ownership must be declared to the Andorran Ministry of Economy.
3. What is the minimum share capital to open a company in Andorra?
The minimum share capital to form a private limited company (SL) in Andorra is €3,000. This must be deposited in a local bank account before registration is finalized.
4. How much does it cost to incorporate a company in Andorra?
Company formation in Andorra typically costs between €5,000 and €10,000, depending on legal fees, notary services, government charges, and whether you need help with residency or business licensing.
5. What are the tax benefits of setting up a company in Andorra?
Andorra offers low corporate taxes, with a standard rate of 10%. There is no wealth tax, inheritance tax, or capital gains tax on most types of income. VAT (IGI) is also low at just 4.5%.
6. What types of companies can I open in Andorra?
The most common structure is a private limited company (SL). Other types include public limited companies (SA), holding companies, and sole proprietorships. Most foreign investors choose SLs for flexibility and limited liability.
7. Do I need to live in Andorra to start a company?
You do not need to live in Andorra to start a company, but at least one director or administrator must be a resident, or you’ll need to appoint a local representative. Residency is recommended for easier management and tax optimization.
8. How long does it take to register a company in Andorra?
Company formation in Andorra generally takes 4 to 6 weeks, including foreign investment approval, company registration, tax identification, and opening a bank account.
9. Is Andorra a tax haven for businesses?
Andorra is not considered a tax haven by the EU or OECD. It offers low but transparent tax rates, complies with international regulations, and has double tax treaties with several countries.
10. Can I open a bank account in Andorra for my company?
Yes, after your company is registered, you can open a corporate bank account in Andorra. Banks require detailed documentation, including business plans, company structure, and identification for all shareholders.
11. Do I need a registered office address in Andorra?
Yes, every company in Andorra must have a local registered office. This is required for legal correspondence and tax registration purposes.
12. Are there annual reporting requirements for Andorran companies?
Yes, Andorran companies must submit annual financial statements, pay annual taxes, and file activity reports with the tax administration. You’ll need to hire a licensed accountant for compliance.
13. Can I relocate my digital business to Andorra?
Yes, Andorra is an excellent jurisdiction for digital entrepreneurs. You can relocate your online business by forming an SL, obtaining residence, and benefiting from the low-tax regime for IT and consulting services.
14. Is Andorra suitable for a holding company?
Yes, Andorra is a strong choice for holding companies due to its low corporate tax and no withholding tax on dividends or capital gains in many cases. Proper structuring is essential for international compliance.
15. What are the steps to apply for foreign investment approval in Andorra?
To apply, submit documentation including passport copies, business plan, criminal background check, and intended shareholding structure to the Ministry of Economy. Approval takes 2–4 weeks and is required before incorporation.
Interested in setting up an offshore company in Andorra?
Visit our Andorra Company Formation page for detailed guidance, packages, and expert support tailored to your needs.
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