Doing business in Andorra - It might be just the right place for you
- Julio Gomez
- Jan 5, 2023
- 3 min read
Updated: Dec 19, 2023
Low taxes, a modern jurisdiction, and a good infrastructure
Why create a company in Andorra?
Andorra, once known as a tax haven, has evolved into a jurisdiction with transparent and low taxation. With one of the most attractive direct taxation systems in the Eurozone, Andorra is a compelling option for entrepreneurs, influencers, digital marketing experts, and investors, among others.
Procedures for creating a company in Andorra
Application for Company Name: Submit three preferred names to the Andorran government, which will respond within 10 days.
Foreign Investment Application: If non-residents wish to acquire more than 10%, a detailed dossier must be provided.
Opening a Bank Account: This step may be cumbersome, especially for those involved in cryptocurrencies.
Constitution and Registration: Formalize the articles of association with an Andorran notary and register the company in the Andorran commercial register.
Commercial Opening: Obtain a license to begin operations and invoicing.
Application for Tax Registration Number: Register with the Andorran Social Security.
The process can take between two and four months, depending on the client's profile.
Advantages and benefits of creating a company in Andorra
Strategic Location: Situated between France and Spain, Andorra is less than three hours by car from major cities like Barcelona and Toulouse.
Taxation: Corporate tax is taxed at a maximum of 10%, and Andorra has 8 Double Taxation Avoidance Agreements with countries like Spain, France, and Portugal.
Investment Opportunities: The Foreign Investment Law allows non-residents to invest in Andorra, and the country values foreign investment highly.
Infrastructure: High-speed internet, excellent healthcare, and trilingual education.
Cost-Effective: Incorporation and maintenance costs are much lower than in Malta, Luxembourg, or Cyprus.
Types of business companies in Andorra
Public Limited Company (SA): Minimum capital of €60,000, suitable for large companies.
Limited Company (SL): Minimum capital of €3,000, aimed at small businesses.
Both types require tax domicile in Andorra and must have an administrator.
Labour costs and salaries in Andorra
Compared to France or Spain, the costs are lower, with Social Security participation being an average of 15% lower. Salaries are estimated to be around €1,950/month on average, with tax savings on profits averaging 30% less.
Other advantages
Lifestyle: Spectacular landscapes and unbeatable ski slopes.
Technology: 100% fiber optic coverage throughout the territory.
Affordability: Office rentals from €400, low prices compared to Spain and France.
Healthcare: Competitive healthcare system with qualified medical teams.
Education: High-quality education options, including free public education.
Summary
In conclusion, Andorra's transformation from a tax haven to a jurisdiction with transparent and low taxation makes it an appealing destination for foreign investors and businesses. The well-defined procedures for company creation, coupled with strategic advantages such as its location, infrastructure, and favourable tax agreements, position Andorra as a competitive choice in Europe.
The country's emphasis on investment, low corporate taxes, and additional non-tax benefits such as quality of life and technological advancements further enhance its attractiveness. Whether for large corporations or small businesses, Andorra offers a unique blend of opportunities that align with various business needs and goals. The comparative advantages in labour costs and the supportive environment for online businesses and freelancers make Andorra a compelling option for company creation.
Andorra's blend of fiscal benefits, lifestyle attractions, and business-friendly environment underscores why Andorra is one of the most attractive countries in Europe for investors to incorporate their companies.
Over the years, we have gained a reputation on strategic compliance guidance.
At iBerotech, we harness regulatory expertise and leverage key strategic partnerships to empower foreign organisations in successfully traversing the Iberian market's multifaceted regulatory landscape for strategic growth.
Sources
https://andorrainsiders.com/en/open-mount-andorra-company/
https://www.andorrainc.com/en/andorra-company-formation/
https://andorralawyers.com/andorra/company-creation-in-andorra-complete-guide/
https://andorraone.com/en/set-up-company-andorra/
