Are you an entrepreneur and want to open a business in Andorra? In this article, we tell you everything you need to know to do so before moving to the Principality. We advise you to put yourself in the hands of our experts at MCA Assessors. We can guide you through the process, making your experience much easier and hassle-free.
Why open a business in Andorra?
Opening a business in Andorra is one of the most popular options for entrepreneurs. To begin with, the Principality is characterized by its low taxation, which usually does not reach 10% of the income, regardless of the type of business. On the other hand, Andorra’s location is strategic, between Spain and France, and very close to the rest of Europe. It is very close to Barcelona and Toulouse. In addition, the Principality has several bilateral agreements with different countries, including eight double-taxation agreements.
Finally, we cannot leave out the excellent quality of life in the Principality and the first-class health services. And, of course, if you plan to open a business in Andorra and take the whole family with you, there are many educational options for the children.
Tax advantages of opening a business in Andorra
Taxation is undoubtedly one of the main attractions of Andorra. We tell you that the benefits in tax matters are multiple if compared with Spain, for example. In the Principality, the taxation is as follows:
- 10% corporate income tax. It is possible to receive a bonus of 80%.
- Corporate income tax exemption for certain holding companies.
- IGI is 4.5%. This tax is the equivalent of the Spanish VAT, whose general rate is 21%.
- Employees’ social security contributions are 15.5%.
- The fees to maintain the company in Andorra are less than 1,000 euros.
Companies in the Principality
Before telling you how to open a business in Andorra, it is essential to note that in the Principality, there are two different types of companies that you can create:
- Limited Liability Company or SL. The minimum share capital is 3,000 euros, which is perfect for creating small and medium-sized companies.
- Public Limited Company or SA. The minimum share capital is 6,000 euros for a business aimed at large companies or platforms.
How to open a business in Andorra?
To open a business in Andorra, following specific steps is essential. Remember that this is a complex process, but by respecting all the requirements demanded by the Principality, you can establish yourself in the country and start doing business successfully.
First steps to open a business in Andorra
- Company name. The first step is to apply to the Government of Andorra for the company name, the name your business will have.
- Application for foreign investment. At the same time that the corporate name is requested, you must make the foreign investment application, as long as you have a shareholding of more than 10% of the capital stock.
- Bank account and share capital. The next step is to open a bank account in the Principality. The account must be a company account, and you can approach any banks operating in the country. The account opening process is also somewhat meticulous, as it is necessary to approve the compliance. With the bank account established, it is time to deposit the share capital.
The legal section for incorporating a business
Once the first steps have been completed, it is time to focus on the legal section. Once the corporate name, the foreign investment, and the bank account with the corresponding deposit are in place, the public deed can be signed. This procedure is done before a notary and must be accompanied by the bylaws of the business and the corresponding incorporation process.
With the deed, the company is registered with the Companies Registry. The notary carries out this procedure, and you have 20 days after the signature to make the inscription and constitution before the Mercantile Registry of Andorra.
After the section confers the notary, depositing with the AFA or Andorran Financial Authority is time. This deposit, which amounts to 50,000 euros, is given as a deposit and also allows you to obtain the residence permit on your own account, a procedure for which we can advise you at MCA Assessors.
Another step to open a business in Andorra is to apply to the Registry of Commerce and Industry. This procedure will allow us to start exercising the corresponding commercial activity and to obtain the NRT. Finally, with all these steps completed, the registration with the Andorran CASS can be done, that is to say, to register not only the company but also the members of the company with social security.
Time and cost of opening a business in Andorra
Incorporation and maintenance costs must be considered when opening a business in Andorra. The former are one-time costs, while the latter are periodic. The cost varies depending on the type of business and commercial activity, but when it comes to digital businesses, which are the most frequent in the Principality, these are the approximate amounts:
- Government and notary fees: 2,000 euros.
- Gestoría’s fees. They vary depending on the agency you decide to hire. Come to MCA Assessors for advice. Gestoría’s fees. They vary depending on the agency you decide to hire. Come to MCA Assessors for advice.
- Deposit of the bond with the AFA: 50,000 euros.
As regards maintenance costs, these are annual and include, in addition to the expenses of the management company in charge of the maintenance and accounts of the company, municipal taxes, and fees amounting to 800 euros.
The time it takes to set up a business in Andorra, as well as to obtain the corresponding residence permit in the Principality, is around three months.
