Andorra has established itself as an attractive destination for entrepreneurs and businesses thanks to its fiscal stability, safe environment, and competitive advantages. However, the process of incorporating a company in the Principality can raise questions, particularly regarding legal requirements, administrative procedures, and specific conditions for both residents and non-residents.
Whether you are planning to relocate to Andorra, set up a business in the country, or simply invest in the Principality, we guide you step by step through the process — from choosing the legal structure to completing the mandatory formalities. This includes the possible application for foreign investment approval, drafting the company’s articles of association, opening a bank account, handling notarial procedures, and registering with the Companies Register and the Andorran Social Security Fund (Caixa Andorrana de la Seguretat Social, or CASS).
Why Create a Company in Andorra? Discover Its Advantages
Establishing yourself in Andorra offers a number of attractive advantages, both from a professional perspective — focusing purely on business — and on a personal or family level, thanks to its climate, location, and quality of life.
The country’s tax benefits are particularly noteworthy, including a reduced Corporate Tax rate of 10% (one of the lowest in Europe), limited Personal Income Tax (IRPF), a General Indirect Tax (IGI – equivalent to Spanish VAT) of 4.5%, and appealing exemptions on wealth tax, inheritance tax, and capital gains tax, among others.
In addition, this Pyrenean country offers strong political and economic stability, an exceptional natural environment, extensive fibre optic coverage, and efficient communication networks that facilitate business development.
Economically, Andorra has demonstrated consistent and sustained growth, with a diversified economy that goes beyond tourism and includes emerging sectors such as technology and financial services. Additionally, the adoption of the euro and a robust banking system ensure economic stability.
Its strategic geographical position — between Spain and France —favours numerous international agreements to avoid double taxation, and highly competitive costs for office rental and everyday expenses compared to other European countries, further enhancing its appeal.
If you not only want to create a company in Andorra but also consider moving there, you’ll find that Andorra is an ideal place to live, offering excellent air quality, spectacular natural landscapes, and a low population density. This makes Andorra a healthy and safe environment.
Additionally, the foreign investment process in Andorra is quite accessible and efficient. Non-residents can start businesses in the country, either by establishing new companies or acquiring already operational ones. The Andorran government promotes foreign investments and implements various measures to facilitate the arrival of entrepreneurs and businesspeople, creating the perfect environment for business growth.
Already have a company and want to relocate it to Andorra? Here is how to do it!
What types of company can you create in Andorra?
Before creating a company in Andorra, the first step is to determine the type of company you want to create. The most common legal forms in Andorra are the Limited Company, the Public Limited Company, the General Partnership or the Sole Proprietorship.
For example, if you choose to incorporate a limited company, you need a minimum capital of 3,000 euros and to obtain the foreign investment dossier. The whole incorporation process must be carried out before an Andorran notary. Subsequently, you only need to obtain the company’s Tax Identification Number (NRT).
Limited Liability Company (LLC, Sociedad Limitada)
The most popular form of incorporation for small and medium-sized enterprises (SMEs). Requires a minimum capital of EUR 3,000.
Public Limited Company (PLC, Sociedad Anónima)
This is more suitable for larger companies with a larger number of partners. The minimum capital to incorporate a corporation is EUR 60,000.
General Partnership (Sociedad Colectiva)
This is a very common structure for small and medium-sized businesses. The general partnership is not subject to a minimum amount of capital for its incorporation.
Sole Proprietorships (Empresas Unipersonales)
In Andorra, as in many other countries, sole proprietorships can be incorporated under various legal forms, although the most common is the Sociedad Limitada Unipersonal (SLU).
- If you opt for a Sociedad Limitada Unipersonal (SLU), the minimum incorporation capital is EUR 3,000.
- On the other hand, if you decide to operate as a self-employed person, there is no minimum capital requirement.
Necessary documentation and other requirements
Contrary to what some might think, the creation of a company in Andorra is subject to strict international transparency standards, with an exhaustive review process that ensures the prevention of illicit activities such as money laundering. This involves gathering and presenting certain essential documentation:
- Criminal records legalized with a Hague Apostille, generally valid for three months from the date of issuance.
- Copy of the passport, also legalized with a Hague Apostille.
- Documentation describing the entrepreneur’s professional profile and business model (e.g., resume, business plan, etc.).
- Proof of tax compliance, such as previous tax returns, as well as documents proving the origin of funds (accounting, annual accounts, etc.).
How to Create a Company in Andorra Step by Step
Setting up a company in Andorra is a fairly straightforward process, but it is important to note that it involves a certain workload and may take between two and four months to complete. This is because Andorra follows a specific procedure that requires a number of steps to be completed before formally applying to create a company in the Principality.
Here is the step-by-step procedure for setting up a company in Andorra:
- The first thing you need to do is choose the legal form. Next, you must proceed with the reservation of the company name — that is, the name you want to give your company. You can propose up to three names to the Andorran government, in order of preference. The response may take up to 10 days.
- If you are not a resident in Andorra and you intend to hold more than 10% of the company’s share capital, you will also need to apply for foreign investment authorisation. This requires submitting a complete application, and the process can take up to a month and a half.
- The next step is to draft the company’s Articles of Association, which must include the company’s business purpose, the address of its registered office, and the composition of the board of directors.
- You must incorporate the company before a notary.
- Registration in the Companies Register (Commercial Registry)
- You will also need to open a business bank account and deposit the share capital: €3,000 for a private limited company (SL) and €60,000 for a public limited company (SA). This is often the most difficult step, as the company must pass the bank’s compliance procedures. You will be required to explain the SOF (Source of Funds) and the nature of the company’s activity.
- Deposits with the Andorran Financial Authority (AFA): these deposits act as a form of guarantee or reserve that institutions are required to maintain with the AFA to ensure compliance with the country’s financial regulations.
- Finally, you must apply for a Tax Registration Number (NRT) and register both the company and all its members with the Andorran Social Security Fund (Caixa Andorrana de Seguretat Social — CASS).
Additionally, depending on the type of business, some further formalities may be required, such as applying for a trading licence, which is issued directly by the relevant local council or comú.
This process can take between 3 and 8 weeks, depending on the complexity of the case and whether the partners are residents or not.
How much does it cost to set up a company in Andorra?
Setting up a company in Andorra is a relatively simple process, but it involves a series of initial costs and recurring expenses that are important to consider before embarking on the project. These costs vary depending on the type of company to be incorporated, the economic activity to be developed and other factors.
| Share Capital | From 3.000 EUR (SL) or 60.000 EUR (SA) |
| Notary and Legal Fees | Between 300 EUR and 2.500 EUR |
| Registry of Commerce and Industry | Between 200 EUR and 400 EUR |
| Opening a Bank Account | Between 0 EUR and 200 EUR (plus, annual maintenance) |
| Business License | Between 100 EUR and 1.000 EUR, depending on the type of business |
| Tax and Accounting Consultancy | Between 300 EUR and 1.000 EUR per month |
| Registration with CASS | Monthly contributions of 22% of the gross salary |
In total, the initial investment is estimated to be between €4,000 and €6,000 to set up an SL under normal conditions.
How to manage operations between Andorra and other countries?
Managing operations between Andorra and your own country requires a strategic approach that takes into account the tax, legal and operational differences between the two countries. GIven that Andorra does not belong to the EU, its legal and fiscal aspects are different than in other European countries.
To avoid problems when setting up your company in Andorra, you should have a good understanding of the tax, labour and operational differences between the two countries.
We analyze the concept of tax residence in Andorra: requirements, necessary documentation, tax advantages. At Augé we can help you to get it
Read articleDouble taxation agreement
The Double Taxation Avoidance Agreement between Andorra and several other countries is a bilateral agreement that seeks to prevent taxpayers in both countries from paying equivalent taxes on the same income in both territories. This type of agreement is crucial to facilitate economic and commercial relations between countries and, in this case, provides a framework that allows taxpayers to avoid double taxation and optimize their tax burden in both countries. So far, Andorra has signed the double taxation agreement with France, Spain, Portugal, Luxembourg, Liechtenstein, Malta, Cyprus, and the United Arab Emirates.
Mobility of workers and companies
The mobility of workers and companies to Andorra is fluid to and from Spain and France, thanks to the geographical proximity and cooperation of both countries. Although Andorra is not part of the European Union, there are mechanisms that allow individuals and companies to operate and move between the two countries relatively smoothly, with certain requirements and legal considerations to be taken into account.
Workers moving to Andorra to work must apply for a work and residence permit, while companies must incorporate a company in the country.
Can I create a company in Andorra and live in my country?
Yes, it is completely possible to create a company in Andorra and operate it from your country without residing in Andorra. No law prevents it.
However, concepts such as effective address or economic substance (i.e. where the offices, workers and key activities of the company are located) are fundamental to determine the tax residence of the company.
Even if the company you open is established in Andorra, it is important to keep in mind that the tax administration of the country of origin could consider the company to be resident there as well, if it can prove that the effective management is carried out in that country.
