Complete guide to create a company in Andorra: Requirements, benefits, and steps to be taken

¿Por qué crear una empresa en Andorra?
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Create a company in Andorra is a process that is best left to experts like MCA Assessors. Andorra is a country characterized by low taxation and transparency. Nowadays, it is much easier to create a company in Andorra, something that was complicated a few years ago. This makes the Principality one of the preferred destinations for investors.

How to create a company in Andorra?

Create a company in Andorra consists of very specific steps. They are not complex, but it is advisable to put yourself in the hands of experts, especially if you have not yet moved to the Principality. The business procedures in Andorra are as follows:

Advantages create a company in Andorra
  • Request reservation of the company name. That is, how your company will be called and allows you to differentiate it from other companies. For this purpose, obtaining a negative certification of the company name is necessary, guaranteeing that the name will be exclusive to the company.
  • Create the company’s bylaws, which will serve as the document to be presented to the notary.
  • Request the foreign investment authorization. This document can only be requested when at least 10% of the company’s capital stock is held.
  • To deposit the initial capital stock. To do so, a bank account must be opened, and the documentation required by the financial institution must be provided. It is very important to comply with the bank’s compliance and KYC.
  • Incorporate the company before the notary. It is here when the bylaws are formalized, and the corresponding registration is made before the Mercantile Registry of the Principality.
  • Deposit with the Andorran Financial Authority (AFA). To create a company in Andorra, depositing at least 15,000 euros with the AFA is necessary. This also allows them to obtain a residence permit.
  • To obtain the Tax Registration Number (NRT). To obtain this document, the application for opening a business is submitted. This number allows the exercise of economic activity.
  • Registration with the CASS or Andorran Social Security. The process of creating a company in Andorra concludes with the registration of the company and the partners in the CASS.

Once the registration with CASS has been made, the company has six months to start operations. As for the incorporation time, the abovementioned process will take about three months.

Types of companies in Andorra

If you want to create a company in Andorra, we tell you that there are two different types of models: the Sociedad Anónima and the Limitada. The Public Limited Company (S.A.) is characterized because it needs a minimum capital of 60,000 euros for its constitution. This type of Andorran company is aimed at large companies as it allows the capital to be distributed among the shareholders. There must be a sum of 1480,50 euros for registration and registration of the company, as well as 935,50 euros per year for maintenance expenses. For these purposes, there is also the Sociedad Anónima Unipersonal model.

The Limited Company (S.L.) is a model in which a minimum capital of 3,000 euros is necessary. This type of company is designed for small businesses, and it is necessary to consider other expenses, such as the company’s registration, which amount to 1016.67 euros. In addition, the annual maintenance costs must amount to 851 euros. There is also the Sociedad Limitada Unipersonal or S.L.U.; a single person will manage this company.

No matter what type of company you want to incorporate, having a tax domicile in the Principality is very important, even if the shareholders, suppliers, and clients are outside the country. On the other hand, companies incorporated in Andorra must have an administrator.

Procedures to create a company in Andorra

Advantages of create a company in Andorra

Why is it a good idea to set up a company in Andorra? We tell you that the Principality is becoming the preferred destination for many foreign investors because of the great benefits it brings. To begin with, Andorra has a strategic location, bordering France to the north and Spain to the south. It is approximately two hours away from cities such as Barcelona and Toulouse.

On the other hand, the country has an excellent infrastructure and one of Europe’s highest per capita incomes. The health and educational infrastructure is extensive, meaning residents have a high quality of life. But without a doubt, what most attracts investors and businessmen is the Andorran taxation.

Taxes in Andorra

Suppose you are going to set up a company in Andorra. In that case, you should know that the Principality has entered into several double taxation treaties that avoid double taxation at the international level. The countries with which this agreement has been signed are Spain, France, Portugal, Liechtenstein, Luxembourg, and the United Arab Emirates. Corporate income tax is between 2 and 10%, while income tax is between 5 and 10%.renta se sitúa entre un 5 y un 10%.

On the other hand, Andorra is characterized by having one of the lowest VATs. Although the VAT in Andorra is IGI, you will be surprised to know that it is 4.5% in general IGI. And what about Spain? The general VAT in our country is 21%. As you can see, in Andorra, it is much lower.

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