[2024] Create a company in Andorra: Requirements and benefits

Andorra, the small Andorran principality nestled between Spain and France, has become an attractive destination for entrepreneurs looking 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 business bank account in this country.

What are the requirements to create a company in Andorra?

To start a new company, certain requirements need to be met. To set up a company in Andorra, the necessary documents include obtaining foreign investment authorization, the company's social denomination, as well as the personal documentation of the founders. Additionally, to establish a company in the country, a minimum capital is required, which varies depending on the type of company one intends to establish. The process to open a company in Andorra involves the presentation of the required documentation to a notary, as well as its registration in the Trade Register. It's important to meet all legal requirements to ensure the successful creation of a company in Andorra. Furthermore, it's vital to consider aspects like choosing the structure of the company, selecting the activity to be developed, as well as drafting the company's bylaws. Administrators must also be appointed and the company's registered office established in the country.

After completing all these steps, you need to apply for a Tax Identification Number (NIF) from Andorra's Tax Administration, as well as open an account in the company's name and make the social capital investment.

Then you can start managing your company in Andorra and continue living legally in Spain. It's important to have the advice of professionals specialized in company creation. At Papers, we handle the creation of the company and take care of all aspects until obtaining active residency. Contact us for more information.

To create a company in Andorra, you need to obtain foreign investment authorization, present the necessary documentation to a notary, register the company in the Trade Register, obtain the NIF, open an account, and comply with current legal regulations. With all these steps fulfilled, you can start operating and developing a successful business in this country. 

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

Andorra offers attractive benefits, such as double taxation agreements, for companies that decide to create a business. Corporate taxation 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 business can benefit from special tax advantages, making them more appealing for foreign investment. In this tax burden comparison, Andorra stands out as a favorable destination for those looking to start a company. Moreover, 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 set up a company while continuing to live in Spain.

Another advantage of creating a company in Andorra is the flexibility in corporate structure, allowing businesses to adapt to changing market needs in an agile and efficient manner. Additionally, the country has a wide network of trade agreements that facilitate international trade and business expansion 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 business in a competitive and business-friendly environment. 

What type of company can be established in Andorra?

When establishing a company in Andorra, it's important to consider the company structure that will best suit business needs. One can opt to establish a Limited Company in Andorra, which offers advantages in terms of limited liability for partners. Likewise, entrepreneurs interested in asset management can opt to establish a Holding in Andorra, subject to certain specific requirements. The process of registering the company in the Trade Register must be meticulously followed to ensure the company operates legally and benefits from the advantages Andorra offers. Additionally, it's important to note that setting up a company in Andorra also requires fulfilling 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 establishing a business is the hiring of employees. Compliance with the country's labor laws is necessary, which establishes regulations on employment contracts, salaries, social benefits, workplace safety, among other aspects.

You can count on the advice of professionals specialized in company formation, like Papers, who can guide entrepreneurs through the entire process, from choosing the type of company to registration in the Trade Register.

When establishing a company, it's essential to consider the business structure that best fits business needs, meet legal and administrative requirements, and seek the advice of specialized professionals to ensure the company's success and legality. 

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

Residing in Andorra can have significant implications for creating a company. The residency requirements for entrepreneurs involve demonstrating the ability to be economically self-sufficient in the country. However, businesspeople residing in Andorra enjoy benefits, both fiscal and in terms of quality of life, making the principality an attractive place to undertake. Furthermore, the foreign investment process in Andorra is solid, allowing non-residents to efficiently establish businesses in the country. The fiscal benefits offered by Andorra to resident businesspeople include a corporate tax of 10%, one of the lowest in Europe, and the absence of personal income and wealth taxes. Additionally, the country has an extensive network of international tax agreements that provide legal security to businesses operating in the country.

Regarding quality of life, Andorra offers a safe and tranquil environment, with high levels of education and healthcare. The country also enjoys a pleasant climate and spectacular natural surroundings attracting numerous residents and tourists. All this, combined with the absence of pollution and low crime rates, make Andorra an ideal place to establish and develop a business.

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

Living in Andorra offers businesspeople numerous advantages, including fiscal benefits, quality of life, safety, and an efficient process for setting up a business in the country. These conditions make Andorra an attractive place to undertake and an option to consider for those seeking to establish their company in a favorable environment.

What are the steps to open a business account?

Opening a business bank account in Andorra requires compliance with certain requirements. Choosing the right bank is crucial, considering aspects like the range of services offered, fees, and applicable regulations. It's essential to stay informed about the rules and regulations regarding business accounts in Andorra to ensure legal compliance in all financial transactions. Once the formalities are completed, the company can operate with its own account in this business-friendly country. Among the requirements for opening a business account in Andorra are presenting the required documentation, which includes the company's registration certificate, personal documentation of legal representatives, proof of address, among others. Additionally, the physical presence of legal representatives may be required when opening the account.

It's important to highlight that Andorra is a country with a strong reputation in the financial sector, so it's crucial to comply with established requirements and demonstrate the legitimacy of the company and its activities. This may involve presenting financial reports, business plans, bank references, among other documents that support the company's solvency and seriousness.

Once the business bank account in Andorra is operational, the company can enjoy a series of advantages, such as the country's financial stability, a wide range of financial services, strong and strict banking regulations, and the ability to conduct transactions in euros, facilitating operations with other European Union countries.

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

If you want more information about creating a business in Andorra in 2024, check our free guide available here.