Company Creation

Learn about the advantages of creating a company or company in Andorra

As many know, Andorra offers many tax benefits. For this reason, creating a business, a company or moving your company to the Andorran country is very tempting for entrepreneurs and investors. But leaving aside the tax advantages that Andorra has for businessmen, entrepreneurs and investors, this incredible country also has other advantages such as its digital infrastructure, its strategic location and above all its excellent quality of life, which will make don't think twice about creating your successful business in Andorra.

Below we detail more valuable advantages to be able to consider opening a company in Andorra:

Tax advantages:
- Taxes on companies ranging from 2% to 10% at the most. This tax depends on the activity of your company.
- Companies exempt from paying corporation tax. Contact us to know the requirements!
- Value added tax (VAT) of 4.5%. This is the lowest VAT in all of Europe. In Andorra it is calledIGI (General Indirect Tax).
- Personal income tax is not paid for incomes of less than €24,000. For incomes that are between €24,000 and €40,000 a 5% of personal income tax must be paid and from €40,000 the personal income tax is 10%.
- Annual maintenance fees such as payments from the municipality and the chamber of commerce, among others, which do not exceed €850 for ordinary companies.
Find out about reduced labor costs and social security contributions
- Low labor costs, especially compared to neighboring countries such as Spain and France.
- Contributions to the Social Security of 15.5%
Salaries in Andorra
- Competitive wages.
- The minimum wage is €1376.27/month €63.52/day €7.36/hour. The average salary in Andorra is €2,426.70/month.

Spain's wages are gradually approaching those of Andorra, but it must be taken into account that the cost of social security is 12% more than social security in Andorra. So the employer has to pay less annually in Andorra than in Spain or France.

Business models for creating companies in Andorra

In Andorra, companies can be classified in many ways. They can be heritage companies, one-person companies, Andorran family companies, among others. But in the legal field, Andorra offers two types of companies.

Limited Company (SL)	Sociedad Anonima
Minimum €3000 of Share Capital. Good option for SMEs.	Minimum €60,000 of Share Capital. Good option for SMEs.

Whether you are a SME or a large company, create your company in Andorra

Limited Company (SL). This type of company is perfect for small and medium-sized businesses. It requires a minimum capital of €3,000 and in the event that there is only one shareholder for the company, a Sole Proprietorship Limited Company (SLU) must be formed. If you want to create a Limited Company or a Sole Proprietorship, you must bear in mind that the registration fee for the company is around €1,016.67.

Joint Stock Company (SA). For Limited Companies, a minimum initial capital of €60,000 is necessary. This type of company is a good option for large companies or companies with many shareholders. In the event that you want to create a Limited Company without shareholders, you can do so by creating a Sole Proprietorship (SAU). The registration costs of a Limited Company are around €1,500.

Documentation necessary to create a Company in Andorra

If you are an individual...
- Copy of your passport with the Hague Postilla.
- Certificate of criminal records in both the country of origin and the country of residence.
If you are a company or society...
- Writing of the constitution with the Hague Postil.
- Valid passport and deed of powers of representatives and/or proxies of the company to be incorporated in Andorra with the Postilla of The Hague.
- Postulated Commercial Registry document listing the beneficial owners.
- Accreditation of criminal record in the country of origin and proof of the last place of residence of the representative or representatives and/or attorneys duly legalized in the Hague Attestation.
- Proof of criminal records in the country of origin and proof of the last place of residence of the representative or representatives and/or attorneys duly legalized in the Hague attestation.
- Certification of the requested foreign investment approved by the board (original document) and Business Plan.
Official documentation of the Company Registry at the Andorran Mercantile Registry.

What are the steps to follow to create a Company in Andorra?

Application for the corporate name. In this first point, the name under which you want to create the company must be requested from the Andorran government and the foreign investment authorization is requested.
Application for foreign investment. In this case, a foreign investment authorization must be requested from the Andorran government if you contribute a share greater than 10% of the share capital.
Opening of the bank account for the company. The bank where you want to deposit the company's share capital will ask you to submit the application to open the bank account with the relevant documents. During this process you will have to be 100% transparent, as you will go through a process of "compliance" or regulatory compliance of the banks to ensure that you comply with international regulations on the prevention of money laundering and financing of terrorism.
Public deed and signature with a notary. At this point, the public deed and the company's statutes must be drawn up and the company's incorporation process must be done before a notary public.
Registration in the Register of Companies. After signing the constitution of the company before a notary and making the constitution of the Andorran commercial register, the notary has 20 days to register the company.
Trade and Industry Registry. We will have to submit the Commerce and Industry application to be able to carry out the commercial activity of the company and in this way we will obtain the NRT (Tax Registration Number).
Registration at CASS (Caixa Andorran Social Security): At this point, we must register both the company and all its members with the Social Security of Andorra.

Remember that at ICOB we will accompany you throughout the process of setting up your Company in Andorra with a PERMANENT contact service with your manager.

Requirements for the establishment and maintenance of a company in Andorra

The requirements for setting up a company in Andorra are under the Economic Substance Criteria. The criteria are as follows:

Registered office in Andorra.
Quarterly and annual tax returns.
Payment of Andorran municipal taxes.
Activity of the company with the operations and transactions made.
Carry out and manage all operations from the Andorran country.
Have a commercial premises in Andorra. Physical and registered office.

How long will it take to complete your company process and what will the cost be?

It is impossible to know with certainty what the time and costs will be when creating your company in Andorra, mainly because the costs depend on factors such as the type of company activity and the size of the business. But after all our experience at ICOB we can make an approximation. The overall and total cost can be divided into set-up costs and maintenance costs.

Establishment costs	Maintenance costs
Government fees, notary, among others: €2,000 approx. Other fees: €4,000 approx.	Municipal taxes: €800 approx. Other fees: €2,400 approx.

At the level of costs to create your Company in Andorra, you must also take into account the deposit mentioned above to be deposited at the AFA (Andorran Financial Authority).

Remember that this deposit must only be deposited in the event that you want residence or want to carry out any of the activities regulated by this entity.

The time to set up a company in Andorra is around 5-6 months.

As you have seen, Andorra not only offers competitive taxation, but also benefits that come with having an efficient and profitable headquarters.

At ICOB we offer you a comprehensive plan and 360° advice for your arrival in Andorra.

Unlike other alternatives, from Andorra we give you 24/7 support both in matters relating to the creation of your company, your residence, real estate and insurance advice, on the country's public services, approval of permits, vehicle importation and EVERYTHING surrounding your arrival in Andorra.

Let us accompany you in this transition.

We aim to offer the best service to our customers.

Our professional services are available to everyone who wants to start their new life in Andorra.

special regime

When Andorra started its tax system in 2012, it wanted to boost its competitiveness by offering tax regimes even more competitive than the normal tax regime.

These regimes have gradually been abolished to the extent that the country has been gaining international prestige, offering one of the best taxation systems in Europe.

Currently, only the special regime for the exploitation of intangibles remains

This regime has an imposition in the corporate tax of 2%

It is aimed at all those business models that exploit trademarks, patents or that exploit software, web pages or IT applications. The exploitation of computer models must have been developed from 0 and must be exclusive to the company requesting the exemption.

The granting of this regime is studied on a case-by-case basis.

The requirement is to hire one person at least half-time.

Company Creation / Company transfer

Why start a business in Andorra?