DOING BUSINESS IN ANDORRA
Since 2003, Healy Consultants has assisted our Clients with services including i) Andorra business registration ii) government license registration iii) corporate banking solutions iv) employee recruitment v) visa and migration strategies and vi) office rental solutions.
Press the link headings below to read detailed, relevant, up to date information.
Advantages and disadvantages
Advantages of Andorra company registration
- A limited liability company in Andorra can be formed with only i) two shareholders ii) one director and a minimum paid-up capital of €3,000. Our Clients are not required to live in Andorra to be appointed as shareholders and directors;
- Andorra companies are allowed to conduct business in the country and overseas without suffering from punitive tax rates making at an attractive EU solution for international entrepreneurs;
- Our Clients forming a company in Andorra will benefit from advantageous tax incentives, including: i) a corporate income tax rate of only 10% ii) capital gain tax of only 10% and iii) no withholding tax on dividends and interest remitted abroad;
- Andorra also offers an attractive holding company regime, through which holding vehicles are legally exempt from corporate income tax from their global subsidiaries, provided that such entities have no permanent establishment in Andorra. See other tax considerations;
- Since 2013, Andorran VAT is the lowest in Europe at 4.5% followed by the Canary Islands at 5%. EU VAT registered companies can be tax exempt and recover any VAT incurred when doing business in Europe through an Andorran company. Healy Consultants will be happy to assist with EU VAT registration for our Clients Andorran company for a one-time fee of €950;
- While Andorra is not part of the European Union, the country uses the euro as its currency and does not implement any exchange controls;
- In 2012, Andorra approved a new law that allows 100% ownership of any company by foreign investors. Some restrictions however continue to apply on companies having trading activities within the territory.
Disadvantages of Andorra company registration
- While Andorra has recently introduced regulations to reduce banking secrecy, the country is still perceived as a tax haven by foreign tax administrations. Andorra is notably included into the blacklisted tax haven lists of several countries including Spain, Canada, Italy, Sweden, Australia and Monaco. Our Clients registering a company in Andorra can hence be subject to additional scrutiny by their tax authority. It is critically important that our Clients are aware of their corporate and personal income tax obligations in their country of residency and comply with them. Let us know if our Firm can assist you with this matter;
- Annual accounts must be submitted to the government for the fiscal year following Andorra company formation. Healy Consultants will assist our Clients efficiently and effectively to complete this annual obligation;
- No global bank is directly present in Andorra. While it is still possible to open a corporate bank account to support Andorra company formation, this will have to be done with a local Andorra bank, including i) Banqua Privata Andorra ii) Andbank and iii) MoraBanc.
Best uses of an Andorra company
- Non-resident business involved in international trade, international investment and financing may be subject to only 2% corporate tax. A VAT rate at 4.5% being the lowest in Europe makes the Principality one of the most tax efficient legal structure to significantly reduce European tax liabilities;
- Holding companies with tax exempt status are especially attractive for wealthy businessmen in neighboring countries Portugal, France and Spain;
- Andorra is a cheaper European alternative for Clients interested in setting up asset protection structures to conserve family wealth compared to Monaco, Switzerland, Liechtenstein, San Marino, Malta or Cyprus.
- Time to incorporate: Four weeks
- Cost to set up: €22,750
- Minimum capital: €3,000
- Physical office required: No
- Shareholders: 2
- Directors: 1
- Company secretary: No
- Resident director: No
- Corporate tax rate: 10%
- Corporate tax base: Worldwide
- Shelf companies: No
- Main company type: SL Company
Useful links for Andorra
Government and public authority websites:
- Law on Trading and Company Names
- Andorra Country Profile
- Andorra; Assesment of Financial Sector Supervision and Regulation
- Andorra and Its Financial System 2013