Business entities in Andorra
There are several ways of doing business in Andorra, the most common being through the setup of an Andorran limited liability company. Business entities available in Andorra also include: i) the public limited company ii) the branch office of an overseas company and iii) the representative office, although these types of legal entity are less commonly used to do business in Andorra.
The Andorra Limited Liability Company (Societat Limitada – SL)
The Andorra LLC is commonly used by global entrepreneurs, as foreigners may now own 100% of both trading and non-trading (holding) company in Andorra. Andorra business setup requires the appointment of one director and two shareholders of any nationality. The shareholders are required to invest a minimum paid-up share capital of €3,000 in order to complete Andorra business setup.
The Andorra Public Limited Company (Societat Anonima – SA)
This business entity is recommended for larger companies that intend to become publicly listed. Such a company requires a minimum capital of €60,000 for incorporation. At least two shareholders of any nationality must be appointed. To give your company a marketing edge, Healy Consultants recommends our Clients establish an Andorra PLC instead of a LLC.
The Andorra branch office
The branch is an extension of an overseas company. It must however have an independent management team and corporate bank account based in Andorra.
The Andorra representative office
Andorra representative offices are not allowed to make direct sales within Andorra or to sign any contracts. Consequently, this entity can only engage in market research and promotion of the business of the overseas company.
The Andorra holding company
- An Andorra holding company can be formed with only i) 1 shareholder ii) 1 director and iii) a minimum paid-up capital of only €3,000. Directors and shareholders can be foreigners and do not need to be residing in Andorra. Our Clients will also not have to travel to complete the engagement;
- An Andorra holding company’s exclusive purpose is the management and holding of participations in non-resident companies located outside Andorra. Under the holding regime, Andorra companies will benefit from tax exemption on i) dividends perceived from overseas subsidiaries and other foreign companies ii) dividends paid to its shareholders in Andorra and overseas and iii) capital gains obtained from transferring shares to other parties. The dividends received by individual or corporate shareholders of the Andorra holding company will also be exempt of personal/corporate income tax. Companies are not automatically granted tax exemption, they must apply to be included under this special tax regime and be approved by the Andorran Tax Authorities;
- Bearer shares are not permitted and the shareholders and directors information is published in the Andorran Public Register. After company registration, it is also mandatory to submit financial statements with the companies registry each year.
Table of comparison between Andorra business entities
|LLC||PLC||Branch||Rep Office||Holding company|
|Also known as||SL||SA||Sucursal||Oficina de representacion||ETVE|
|How long to set the company up?||4 weeks||4 weeks||6 weeks||6 weeks||4 weeks|
|How long to open company bank account?||4 weeks||4 weeks||4 weeks||4 weeks||4 weeks|
|Minimum share capital?||€3,000||€60,000||N/A||N/A||€3,000|
|File annual tax return?||Yes||Yes||Yes||Yes||Yes|
|Tax registration certificate required?||Yes||Yes||Yes||Yes||Yes|
|Recommended corporate bank account?||Andbank||Banqua Privata Andorra||MoraBanc||MoraBanc||Andbank|
|Does our Client need to travel?||No||No||No||No||No|
|Resident director required?||No||No||No||No||No|
|Andorran shareholder required?||No||No||No||No||No|
|Minimum directors allowed?||1||1||1||1||1|
|Resident company secretary required?||No||No||No||No||No|
|Corporate shareholders allowed?||Yes||Yes||Yes||Yes||Yes|
|Corporate director(s) allowed?||No||No||No||No||No|
|Corporate tax rate?||10%||10%||10%||N/A||0%|
|Annual financial statements required?||Yes||Yes||Yes||Yes||Yes|
|Statutory audit required?||No||Yes||Yes||Yes||No|
|Allowed to issue sales invoices?||Yes||Yes||Yes||No||Yes|
|Allowed to sign contracts?||Yes||Yes||Yes||No||Yes|
|Allowed to import and export goods?||Yes||Yes||Yes||No||No|
|Can rent an office space in Andorra?||Yes||Yes||Yes||Yes||Yes|
|Can buy Andorra property?||Yes||Yes||Yes||No||No|
|Can own equity in other Andorra companies?||Yes||Yes||Yes||No||No|
|Total Andorra business setup costs in Yr. 1||€22,750||€25,750||€26,750||€23,750||€22,750|
|Subsequent annual costs (incl. accounting and tax fee)||€5,400||€6,400||€6,400||€5,400||€5,400|
|Sample engagement invoice|