Andorra is known as a tax and business haven due to its tax advantages, stable legal framework, and simplified procedures. One of the popular legal instruments in this country is the establishment of a 'sociedad patrimonial'. In this article, we'll dig into what a 'sociedad patrimonial' is, why to set one up in Andorra, its benefits, and the necessary process to make it happen.
Feb 24, 2024
A patrimonial society is a legal structure whose main goal is to manage and administer real estate or financial assets of its partners. In general, it does not engage in any commercial, industrial, or professional activity, but rather acts as an intermediary between its partners and the owned assets.
There are two main types of patrimonial societies:
Real estate patrimonial society: It handles the management and administration of real estate properties, whether they are residential, commercial, or industrial.
Financial patrimonial society: It manages financial assets such as stocks, bonds, shares in other companies, bank accounts, among others.
Both types of societies can be used to optimize the management of assets and facilitate their administration.
Establishing a patrimonial society in Andorra can offer numerous tax and legal advantages, making it a very attractive option for investors and businessmen who wish to protect and manage their assets efficiently. Some of these advantages include:
Reduced taxation: Andorra has a favorable tax regime, with a general Corporate Tax rate of 10%. However, patrimonial societies that meet certain requirements may benefit from a reduced taxation of 4%.
Tax-free transfer of shares: There is no wealth tax nor on the transfer of shares, which is especially useful for succession planning or transfer of assets among partners.
Confidentiality: Andorra ensures the privacy and confidentiality of its investors and companies, as public access to financial and patrimonial information of societies is not allowed.
Political and legal stability: This country offers a safe and stable legal framework for conducting business and financial operations.
The process of creating a patrimonial society in Andorra is relatively simple and fast. Here are the steps to follow:
To start, it's necessary to define the legal structure of the society (for example, Public Limited Company or Private Limited Company) and the specific social objective related to the management and administration of goods.
Before beginning the legal procedures, it's important to ensure that the desired name for the society is available. For this, a consultation must be made at the Mercantile Registry of Andorra.
The next step is to draft the public deed of incorporation before a notary and have it signed by all the partners. This document includes details such as denomination, address, social objective, social capital, among other important data. The social statutes must also be included and accepted by the partners.
Once the public deed is signed, it is necessary to present it along with the required documents to the Mercantile Registry of Andorra to apply for the society's registration.
After registration in the Mercantile Registry, it will be necessary to obtain the society's Tax Identification Number (NRT), which will allow carrying out economic activities and comply with tax obligations.
Finally, it's crucial to open a bank account in Andorra to deposit the minimum required social capital, depending on the type of society chosen.
In summary, constituting a patrimonial society in Andorra can be a smart strategy for efficiently managing real estate or financial assets, taking advantage of the tax and legal benefits offered by this country. In any case, it's always advisable to seek expert advice before making decisions related to the legal and fiscal structure of your assets.
If you want more information on how to create a company in Andorra, we invite you to continue reading this article.
