Setting Up a Company in Andorra for Online Business: E-Commerce, Consulting, and Services

Published on July 27, 2026 and written by Cyril Jarnias

Setting up your digital business in Andorra is attracting more and more e‑commerce entrepreneurs, consultants, and online service providers. Light taxation, a modern legal framework, a solid banking system, and provisions for digital nomads and tech startups: the principle seems appealing. But turning this idea into a concrete project requires mastering several layers of rules—tax, social, immigration, customs, digital, and intellectual property.

A tax environment designed for digital businesses

Andorra is regularly presented as one of the most favorable tax environments in Europe for entrepreneurship, without being an “exotic” jurisdiction. Its tax system is codified, stable, and part of a legal framework that has been modernized in recent years.

Corporate tax: between 2% and 10% depending on the case

The core of the appeal lies in corporate tax, called Impost de Societats (IS). The standard rate is a flat rate of 10% applied to net profit. This level is significantly lower than neighboring countries: around 25% in Spain and 25% in France, with social charges and additional levies generally heavier in those states.

However, one must take into account a minimum taxation threshold: an effective contribution of 3% on positive accounting profit was introduced starting from the 2024 fiscal year. In practice, even by multiplying deductions, a profitable company will no longer be able to fall below this minimum threshold, unless it falls under a specifically approved 2% regime.

To visualize the main orders of magnitude:

For an e‑commerce operator or an international consultant, current taxation will in practice be around 10%, or even less if the activity falls under a specialized regime with substance (service company with a high intangible component, software development, platforms, etc.).

Personal income tax: cap at 10%

The other key bloc for an entrepreneur who personally settles in Andorra is personal income tax (IRPF). Again, the logic is to cap the tax burden. The scale provides a full exemption on the first 24,000 euros of annual income, followed by a moderate progression to a maximum rate of 10%.

– the portion of income up to €24,000 is exempt,

– income above that is taxed at 5–10% depending on the bracket,

– dividends distributed by an Andorran company to an Andorran resident are exempt from local IRPF.

A table allows comparison of the main features with a neighboring country:

For capital gains on crypto‑assets, a special regime provides for taxation of up to 10%, with an annual allowance of €3,000.

IGI: the Andorran “VAT” at 4.5%

Unlike European Union countries, Andorra does not apply VAT, but a general indirect tax (IGI) that plays an equivalent role. Its standard rate is 4.5% on the sale of goods and provision of services. This is one of the lowest in Europe, far from the 20% in France or 21% in Spain.

– sales to customers located in Andorra will be subject to IGI at 4.5% (except in cases of reduced rates),

– exports (France, Spain, rest of the EU) are in principle invoiced without IGI, with VAT due in the destination country.

This implies a dual logic:

1. managing IGI for internal Andorran operations; 2. managing VAT, OSS or IOSS rules for flows to the European Union.

We will come back to this point for cross‑border e‑commerce.

Other tax features: what does not exist

Andorra also stands out for what it does not tax:

– no wealth tax,

– no inheritance or gift tax,

– no specific tax on the holding of financial assets.

For a wealth‑conscious entrepreneur who wants to house their online business income in a stable structure, these elements weigh heavily in the balance, especially compared with the overall charges in EU member states.

Choosing the right structure: SL, SA, holding, and international companies

For an e‑commerce, consulting, or digital services player, the standard vehicle in Andorra is the limited company. Local law primarily provides for two forms: the Societat Limitada (SL) and the Societat Anònima (SA).

The SL, basic vehicle for e‑commerce and consulting

The SL is the Andorran equivalent of an LLC. It is widely preferred by entrepreneurs, incorporated freelancers, service SMEs, digital agencies, consulting firms, IT developers, etc. The minimum share capital is set at €3,000, paid in cash or occasionally in kind.

It can be formed by a single shareholder (SLU) or several, and its management is flexible: a single manager, several joint or several directors, or a board of directors. Shareholders benefit from limited liability up to the amount of their contributions.

For an online business, the SL ticks several boxes:

A formation cost of around €1,000 in registration fees and an annual register fee of about €850 give an order of magnitude of the administrative base.

The SA, vehicle for large‑scale projects

The SA, close to the French société anonyme, requires a minimum capital of €60,000, fully paid up upon formation. It is intended for major projects, credit institutions, insurers, or structures aiming to open up capital to many investors.

In the context of a standard e‑commerce business or consulting activity, the SA is generally relevant only if you aim for: significant turnover and a complex management structure.

– a significant fundraising,

– a large number of shareholders,

– or a more “institutional” perception with financial partners.

Holdings and international companies: structuring a group

Andorran law allows holdings dedicated to holding foreign subsidiaries. An Andorran holding can be created with a capital of €3,000, a single shareholder and a single director, without any local residency requirement for the latter. Its purpose is then limited to holding and managing holdings in non‑resident companies.

This type of structure interests entrepreneurs who:

– already own e‑commerce or consulting subsidiaries in other countries,

– wish to centralize the holding of shares in a jurisdiction with more neutral taxation,

– and want to benefit from exemption regimes on dividends and capital gains, subject to conditions (minimum holding and level of taxation of subsidiaries).

In parallel, specific categories, such as “international exploitation of intangible assets companies” or “international trade companies”, exist for activities essentially oriented abroad. They can allow for reduced rates (up to 2%) provided that real substance is demonstrated and that the criteria of the sectoral legislation are met.

Creating your company: steps, bank, and basic obligations

Setting up your structure in Andorra is not a mere online formality, even though significant progress has been made in digitalization. The process remains regulated and involves several mandatory milestones.

Legal process: from company name to registration

Creation generally follows this sequence:

The notary has 20 working days after the signing to proceed with registration, after which the company can start operating, subject to obtaining the necessary commercial or municipal permits.

Opening a bank account in Andorra: conditions and practices

Opening a bank account is a mandatory step, both to release the capital and for daily management (collections, expenses, IGI, salaries). The Andorran financial sector is concentrated around a few solid banking groups, active in retail banking, wealth management, and investment banking.

To open a company account, banks generally require:

Accounts can be held in euros, but also in other currencies. Andorran banks are connected to the SWIFT network and, since 2019, fully integrated into the SEPA system for euro zone transfers (credit, and gradually direct debits and instant payments).

IGI, registration, and accounting

Any company carrying out an economic activity in Andorra must register for IGI and keep regular accounting. IGI filing obligations depend on turnover:

In all cases, you must maintain a register of issued and received invoices, distinguishing:

– IGI collected (sales in Andorra),

– deductible IGI on local purchases,

– IGI on imports.

Taxation is by difference, through the forms provided by the administration (general or simplified regime).

Residence and physical presence: working from Andorra, not as a fiction

Creating a company in Andorra for an online activity quickly leads to a central question: where does the founder actually live? The authorities are clear: this is not a mailbox country. Residence rules require effective physical presence.

“Active” residences for entrepreneurs: working on site

For founders who wish to manage their company from the country and benefit from active resident status, several paths exist, but with a common core: a minimum presence of 183 days per year in the Principality and having the center of one’s economic and personal interests there.

The most classic scheme for an entrepreneur‑shareholder is the work permit for shareholding director:

Other paths exist, particularly for innovative projects in the digital economy or for “digital entrepreneur” profiles, who can obtain D.4‑type residences, without the fixed capital requirement or the €50,000 deposit with the AFA, provided that the technological activity has high added value and is validated by the Ministry of Economy. This type of permit nevertheless imposes:

– monthly financial means of at least three times the Andorran minimum wage (plus a minimum per dependent),

– a stay obligation of at least 90 days per year,

– private health insurance and housing (rented or owned) in Andorra.

“Passive” residences for international entrepreneurs: 90 days and activity oriented abroad

For entrepreneurs whose online activity is almost exclusively foreign, a specific category called “international business” or “category B” passive residence exists. It is designed for people who:

– create an Andorran company,

– generate at least 85% of their turnover outside Andorra,

– wish to spend only 90 days a year or more in the country.

This category requires:

– incorporation of a company,

– a refundable deposit of approximately €50,000 with the AFA, plus an amount per dependent,

– a income threshold above 300% of the annual Andorran minimum wage (and an additional 100% per dependent),

– proof of housing and private health insurance.

Digital nomads and tech entrepreneurs: the regulated 100% online path

Law 42/2022 and accompanying texts introduced a category of residence permit for digital nomads. It targets professionals who:

– do not need a specific geographic location to work,

– work primarily using information technology and telecommunications,

– contribute to the digital economy, entrepreneurship, or innovation.

These permits, initially valid for two years and then renewable for increasingly longer periods, impose a minimum of 90 days of annual presence, sufficient financial resources, housing, and health and disability insurance covering Andorra. They are subject to an annual quota and require qualitative validation of the profile by the ministry in charge of the economy.

For a consultant or online service provider already mobile between several countries, this path allows settling in Andorra without the obligation to immediately establish a local company, provided that the criteria related to the dematerialized nature of the work are respected.

Data protection, cookies, and e‑commerce framework

Even though Andorra does not belong to either the European Union or the European Economic Area, it has adopted a legal corpus heavily inspired by European law in matters of electronic commerce and data protection.

E‑commerce law and online contracts

Online transactions are governed by a specific e‑commerce law and a text on the legal validity of electronic contracts. In practice, an e‑commerce site, a SaaS platform, or an online consulting site based in Andorra must:

These requirements bring Andorran practice close to European standards, without directly applying the EU e‑commerce directive.

Personal data: a law close to the GDPR

The Andorran law on personal data protection (LQPD) is supervised by the Andorran Data Protection Agency (APDA). It adopts the main principles of the GDPR:

– basic obligation of lawfulness, fairness, and transparency,

– informing individuals of the controller’s identity, purposes, legal basis, recipients,

– rights of access, rectification, erasure, opposition (ARCO rights),

– appropriate security of data against unauthorized access or loss,

– regulation of international data transfers when the destination country does not ensure an equivalent level.

Cookies, banners, and consent management

On the cookie front, Andorra aligns with European practices: sites must clearly inform the user and obtain prior consent for any cookie that is not strictly necessary (analytics, marketing, third‑party tracking).

In practice, an Andorran site will need to:

– display a visible banner on the first visit,

– distinguish essential cookies from others,

– offer options for acceptance, refusal, or settings,

– ideally use a compliant consent management platform (CMP).

For an e‑commerce operator that also targets EU customers, respecting these principles helps avoid gaps with the regulatory expectations of other jurisdictions.

Selling from Andorra to the EU: customs, VAT, OSS, and IOSS

The tricky point for an e‑commerce project based in Andorra is managing sales to France, Spain, and more broadly, the European Union. Andorra is associated with the EU through a customs agreement and an association agreement, but is not integrated into the European VAT area. Goods leaving Andorra for the EU are treated as imports by the destination country.

Exporting physical goods: SAD, invoices, and import VAT

For any shipment of goods to France or Spain from Andorra, the goods are subject to a customs declaration using a Single Administrative Document (SAD). The Andorran exporter provides:

– a commercial invoice without IGI, detailing descriptions, prices, and the tax data of the parties,

– a transport document (CMR, waybill, etc.),

– a packing list if necessary.

Upon arrival, the French or Spanish customs apply:

– any customs duties depending on the nature of the product,

– local VAT (20% in France, 21% in Spain) on the import value.

Digital services and products: IGI, local VAT, and registrations

For digital services (SaaS subscriptions, downloadable software, digital content, pure online consulting) sold to Andorran customers, the company generally applies IGI at 4.5%. The rules differ if the customer is in the EU.

– In B2B with an EU customer who is VATP registered (professional with an intra‑Community VAT number), the logic is reverse charge: the Andorran provider invoices tax‑free and the customer declares VAT in their own country.

– In B2C with European private individuals, the principle is to apply the VAT of the country of consumption. But since Andorra is outside the EU, the standard EU OSS scheme is not directly open to it. This leads to configurations where you must register for VAT in certain member states depending on turnover thresholds reached, or use, for the sale of low‑value goods, the IOSS scheme through an intermediary established in the EU.

For an e‑commerce operator who sends parcels of less than €150 to European consumers:

IOSS requirements involve:

– the obligation to charge VAT at the buyer’s country rate,

– transmitting the IOSS identifier to customs formalities,

– keeping detailed records of sales by member state.

The choice between these modalities depends on the nature of the products, shipment volumes, and the desired user experience (avoiding customers paying unpredictable fees upon delivery).

Logistics summary for an Andorran e‑commerce business

In summary, an e‑commerce business based in Andorra selling to the EU will need to manage:

– IGI at 4.5% for local sales,

– import VAT mechanisms for physical shipments,

– reverse charge for B2B digital services,

– possible VAT registrations in member states, or use of IOSS for low‑value B2C sales.

A country‑by‑country and product‑by‑product analysis is almost essential to structure a robust model.

Social contributions, social protection, and entrepreneur status

Taxation is not the only economic factor to consider. The cost and coverage of social security play an important role in the decision to settle with one’s family or team.

CASS: 22% of the average salary for the self‑employed

The Andorran social security system is managed by the CASS. For a self‑employed worker or a director‑shareholder who contributes personally, the standard contribution corresponds to 22% of the Andorran average salary, regardless of actual income. The scale works by brackets, but for a typical entrepreneur, the reference base is close to the official average salary.

To illustrate, based on an average salary of around €2,560–2,670:

– the standard contribution exceeds €560 per month for a self‑employed person,

– it is split between the general branch (health, benefits) and the pension branch.

– for a new activity, a reduced base (25% of the average salary) can apply in the first year, with a contribution around €64 per month, but without entitlement to pension points,

– for self‑employed persons with low turnover (less than €12,000 profit and €150,000 turnover), a 50% reduction can bring the contribution down to around €280.

As income increases, the CASS can adjust the calculation base, up to 137.5% of the standard base for very high incomes.

Employees: split 6.5% / 15.5%

For an employee of an Andorran company, total social charges represent around 22% of gross salary, broken down as follows:

– 6.5% borne by the employee,

– 15.5% borne by the employer.

For an online entrepreneur planning to build a small local team (customer service, logistics, development), these percentages are a key element of the cost structure, especially since salaries must at least respect the Andorran minimum wage, which is regularly updated.

Health coverage: CASS, France, and Spain

In return, affiliation with the CASS provides access:

– to the Andorran health system, with a typical reimbursement of 75% of health expenses, the remainder can be covered by private supplementary insurance,

– and to agreements with the French and Spanish health systems, useful in case of care in neighboring countries.

Residents without professional activity or pension rights must themselves take out private health insurance, often required in passive residence or digital nomad procedures.

Labor law, telework, and independent consultants

In an online business model, two situations often arise: hiring employees in Andorra and working with independent contractors based there, while sometimes having non‑Andorran clients.

Employees in Andorra: protective yet flexible framework

Andorran labor law governs:

– a standard weekly duration of 40 hours,

– rest periods (at least 30 minutes after 6 hours, 48 consecutive hours of weekly rest),

– paid annual leave (30 calendar days after one year of service),

– maternity leave (16 weeks) and paternity leave (2 weeks) paid at 100%,

– severance pay (1.5 days of salary per month worked, up to 270 days) when the employee has at least six months of service.

Telework and nomadism: a right under adaptation

Telework (“teletreball”) is not a blind spot. Legislation is evolving to regulate it, but it largely rests on the principle of agreement between the parties, through:

– riders specifying place of performance, hours, tools provided, expense coverage,

– the guarantee of equal rights with on‑site employees (salary, training, career progression),

– protection of privacy and respect for the “right to disconnect”.

– registers with the CASS,

– manages their own contributions and income tax,

– invoices their services with or without IGI depending on territoriality.

This scheme is especially suitable for experts in consulting, coaching, software development, digital marketing, who monetize their services remotely to an international clientele.

Intellectual property: trademarks, software, content

For an online company, intellectual property is often the main asset: brand name, logo, graphic charter, software, databases, editorial or audiovisual content, online training, etc. Andorra has equipped itself with a comprehensive arsenal, largely harmonized with international standards.

Trademarks, patents, designs: an international anchorage

Companies can protect: sensitive data, intellectual property, brand reputation, employee safety, and regulatory compliance.

– their trademarks (name, logo, slogan, sounds) with the Andorran Industrial Property Office,

– their patents for technical inventions (20‑year term, subject to novelty, inventive step, and industrial applicability),

– their industrial designs and models (5 years, renewable),

– and, via international systems, extend this protection (Madrid System for trademarks, European Patent Office for patents, etc.).

Copyright and related rights: automatic protection

Andorran copyright protects, without any mandatory filing requirement:

– literary and artistic works,

– software and computer programs,

– audiovisual, graphic, photographic works,

– original databases,

– derivative works (translations, adaptations, compilations).

Protection lasts for the life of the author and 70 years after their death (with specific rules for collective and anonymous works). Authors enjoy both economic rights (reproduction, communication to the public, adaptation, etc.) and moral rights (attribution, integrity).

Protection strategy for an online business

A digital entrepreneur in Andorra has every interest in: taking advantage of favorable tax regimes, developing their online activity, and relying on the country’s high connectivity to attract international clients.

– register their trademark to secure their name and logo,

– check availability before any communication campaign,

– document the development of their software, databases, and content,

– include robust intellectual property clauses in contracts with employees, freelancers, and contractors,

– monitor potential infringements (copycats, counterfeiting) and act quickly, including through precautionary measures.

Registration costs (a few hundred euros for a company, around €400 for some formalities) are low compared with the potential cost of a dispute.

In practice: who really benefits from setting up in Andorra?

Creating a company in Andorra for an online activity is neither a mirage nor a magic solution. It is a strategic choice suited to certain profiles.

It is particularly relevant for:

Conversely, the setup would be unsuitable for:

– players who do not want or cannot spend time on site, while the rules require real physical presence,

– activities primarily directed toward the Andorran market (too small for large volumes),

– profiles merely looking to “place” a mailbox without substantial economic activity or substance.

For those whose model fits, the combination of:

makes setting up in Andorra a serious option for sustainably structuring an online business in e‑commerce, consulting, or digital services.

The key is not to limit oneself to marketing discourse, but to carefully articulate: legal structure, residence status, cross‑border tax management, e‑commerce compliance, and protection of intangible assets, ideally with the support of specialized local advisors.

Cyril Jarnias

Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.

On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.

Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.

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