Setting up a company in the Principality of Andorra

Andorra, the small Andorran principality located between Spain and France, has become an appealing destination for entrepreneurs wishing to start a business in Andorra. In this article, we'll explore the requirements, types of companies, implications of living in Andorra, and the steps to open a corporate bank account in this country.

What are the requirements to create a company in Andorra?

To create a new company, certain requirements must be met. To set up a company in Andorra, the necessary documents include obtaining a foreign investment authorization, the company name, as well as the personal documentation of the founders. Furthermore, to establish a company in the country, a minimum capital is required that varies depending on the type of society one aims to establish. The process of opening a company in Andorra involves submitting the required documentation to a notary, as well as its registration in the Commercial Registry. It is vital to comply with all legal requirements to ensure that it is possible to create a successful company in Andorra. In addition, it is essential to take into account aspects such as choosing the company structure, choosing the activity to be carried out, as well as the drafting of the company's corporate statutes. The administrators must also be appointed and the registered office of the company in the country established.

After completing all these steps, it is necessary to request the Tax Identification Number (NRT) from the Andorra Tax Administration, as well as to open an account in the name of the company and make the investment of the share capital.

Then you'll be able to start managing your society in Andorra and continue living legally in Spain. It is important to have the advice of professionals specialized in company formation. At Papers we take care of the company creation and we handle all the aspects until obtaining the active residence. Contact us for more information.

To create a society in Andorra, it is required to obtain a foreign investment authorization, submit the necessary documentation before a notary, register the company in the Commercial Registry, obtain the NRT, open an account and comply with the current legal regulations. With all these steps completed, you will be able to start operating and developing a successful company in this country. 

What are the tax advantages of setting up a company in Andorra?

Andorra offers attractive advantages, such as double taxation agreements, for companies that decide to create a company. Taxation for society in Andorra is competitive, with a corporate tax that can be advantageous compared to other countries. Moreover, foreign companies that decide to set up a company can benefit from special tax advantages, making them more attractive for foreign investment. In this comparison of tax burdens, Andorra stands out as a favourable destination for those looking to start a company. Additionally, Andorra also offers a stable and secure business environment, with modern infrastructure and a strategic location in the heart of Europe. This, combined with its transparent legal system and highly skilled workforce, makes Andorra an attractive place for business investment and an excellent place to establish a company while continuing to live in Spain.

Another advantage of creating a company in Andorra is the flexibility in corporate structure, allowing companies to adapt to the changing needs of the market in an agile and efficient manner. Furthermore, the country has an extensive network of trade treaties that facilitate international trade and the expansion of companies into global markets.

Andorra offers an attractive business environment with stability, flexibility, and access to international markets, making it an ideal destination for those looking to create a company in a competitive and business-friendly environment. 

What type of society can be established in Andorra?

When setting up a society in Andorra, it is important to consider the corporate structure that will best suit the needs of the business. One can opt for establishing a Limited Company in Andorra, which offers advantages in terms of the limited liability of the partners. Likewise, entrepreneurs interested in asset management may choose to establish a Holding in Andorra, subject to certain specific requirements. The process of registering the society in the Commercial Registry must be followed meticulously to ensure that the company operates legally and benefits from the advantages offered by Andorra. Moreover, it is important to bear in mind that establishing a company in Andorra also requires compliance with certain legal and administrative requirements, such as obtaining a Tax Identification Number (NIF) for the company and opening an account in Andorra.

Another important aspect to consider when setting up a company is hiring employees. It is necessary to comply with the labor laws of the country, which establish rules on labor contracts, wages, social benefits, work safety, among other aspects.

You can count on the advice of professionals specialized in company formation, such as Papers, who can guide entrepreneurs throughout the entire process, from choosing the type of company to registration in the Commercial Registry.

When establishing a company, it is crucial to consider the corporate structure that best fits the needs of the business, to comply with the legal and administrative requirements, and to have the advice of specialized professionals to ensure the success and legality of the company. 

What are the implications of residing in Andorra for creating a company?

Residing in Andorra can have significant implications for creating a company. The residence requirements for entrepreneurs involve demonstrating the ability to sustain oneself economically in the country. Nonetheless, entrepreneurs residing in Andorra enjoy benefits, both fiscal and in terms of quality of life, that make the principality an attractive place for undertaking. Furthermore, the process of foreign investment in Andorra is solid, allowing non-residents to set up businesses in the country efficiently. The fiscal benefits that Andorra offers to resident entrepreneurs include a corporate tax rate of 10%, one of the lowest in Europe, and the absence of personal taxes on income and wealth. Additionally, the country has a network of international tax agreements that provide legal security to businesses operating there.

In terms of quality of life, Andorra offers a safe and peaceful environment, with a high educational and health standard. The country also enjoys a pleasant climate and a spectacular natural setting that attracts numerous residents and tourists. All of this, combined with the absence of pollution and the low level of crime, makes Andorra an ideal place to establish and develop a company.

On the other hand, the process of foreign investment in Andorra is relatively simple and quick. Non-residents can establish businesses in the country through the establishment of societies or the acquisition of existing businesses. Moreover, the Andorran government is open to foreign investments and has implemented measures to facilitate the arrival of entrepreneurs and businesspeople to the country.

Residing in Andorra offers entrepreneurs numerous advantages, including tax benefits, quality of life, security, and an efficient process for establishing a business in the country. These conditions make Andorra an attractive place for entrepreneurship and an option to consider for those looking to establish their company in a favorable environment.

What are the steps to open an account for the company?

Opening a bank account in Andorra requires fulfilling certain criteria. Choosing the right bank is essential, considering aspects such as the variety of services offered, fees, and applicable regulations. It is fundamental to be aware of the regulations and rules concerning corporate accounts in Andorra, to ensure legal compliance in all financial transactions. Once the procedures are completed, the company will be able to operate with its own account in this business-friendly country. Among the requirements for opening a corporate account in Andorra are the presentation of the required documentation, including the company registration certificate, personal documentation of the legal representatives, proof of address, among others. In addition, the physical presence of the legal representatives may be required at the account opening.

It is important to highlight that Andorra is a country with a solid reputation in the financial field, so it is important to comply with the established requirements and demonstrate the legitimacy of the company and its activities. This may involve the presentation of financial reports, business plans, banking references, and other documents that support the solvency and seriousness of the company.

Once the corporate bank account in Andorra is operational, the company will be able to enjoy a number of advantages, such as the financial stability of the country, a wide range of financial services, solid and strict banking regulation, and the possibility of conducting transactions in euros, which facilitates operations with other countries of the European Union.

Opening a corporate bank account in Andorra requires time, preparation, and strict compliance with legal and financial requirements. However, once these procedures are completed, the company will be able to operate in a business-friendly environment, with access to quality financial services and a solid and reliable banking infrastructure. 

If you would like more information about setting up a company in Andorra in 2024, please refer to our free guide available here.