Forming A Company In Andorra: The Complete Guide

Published on October 2, 2025 and written by Cyril Jarnias

Andorra has become a premier destination for entrepreneurs seeking to benefit from favorable taxation while remaining at the heart of Europe. With its breathtaking mountain landscapes and exceptional quality of life, the Principality is attracting more and more investors and business creators. In this article, we will explore in detail all aspects of company formation in Andorra, from tax benefits to administrative procedures and the most promising business sectors.

Why Andorra is an Entrepreneur’s Paradise

Forming a company in Andorra offers numerous advantages for entrepreneurs:

Ultra-competitive taxation: With a corporate tax rate of only 10% (which can be reduced to 2% under certain conditions), Andorra offers one of the most attractive tax regimes in Europe. Dividends distributed to resident shareholders are also tax-exempt.

A stable and secure economic environment: Andorra benefits from great political and economic stability, along with a solid banking system renowned for its discretion.

Exceptional quality of life: Between mountains and ski resorts, Andorra offers a privileged living environment with an excellent healthcare and education system.

Strategic geographical location: Situated between France and Spain, Andorra provides easy access to European markets while remaining outside the European Union.

Reduced social charges: Social security contributions are capped at 22% for employers, which is significantly lower than rates in neighboring countries.

No exchange controls: There are no restrictions on capital movements in Andorra.

All these factors make Andorra an ideal destination for entrepreneurs looking to optimize their structure and develop their business in a favorable environment.

The Most Suitable Legal Structures for Your Project

Several legal forms are available for forming a company in Andorra:

Societat Limitada (SL): Equivalent to the French SARL, this is the most common form for SMEs. The minimum capital is €3,000 and partners’ liability is limited to their contributions.

Societat Anònima (SA): Similar to the French SA, it is suitable for larger-scale projects. The minimum capital is €60,000.

Societat Unipersonal (SLU): This is an SL with a single partner, ideal for individual entrepreneurs.

Sucursal: This is a branch of a foreign company, without its own legal personality.

The choice of structure will depend on your project, your objectives, and your personal situation. It is recommended to seek advice from an expert to determine the most suitable legal form.

One of Europe’s Most Attractive Corporate Tax Systems

The Andorran tax regime is particularly advantageous for companies:

Corporate tax: The standard rate is 10%, but it can be reduced to 2% for certain activities such as intellectual property management or international trading companies.

No dividend taxation: Dividends paid to resident shareholders are tax-exempt.

Reduced VAT (IGI): The standard rate is 4.5%, one of the lowest in Europe.

Capital gains exemption: Capital gains on the sale of shares are exempt under certain conditions.

Tax treaties: Andorra has signed double taxation treaties with several countries, including France and Spain.

This attractive tax system allows companies to maximize their profits and reinvest more easily in their development.

Key Steps to Form Your Andorran Company

Forming a company in Andorra involves several steps:

1. Obtain foreign investment authorization from the Andorran Ministry of Economy.

2. Choose and reserve the company name with the Companies Registry.

3. Draft the company’s articles of association with the help of a local lawyer.

4. Open a temporary bank account and deposit the share capital.

5. Sign the deed of incorporation before an Andorran notary.

6. Obtain the tax identification number (NRT) from the Ministry of Finance.

7. Register the company with the Commercial Registry.

8. Obtain the necessary licenses and permits according to the activity.

The complete process typically takes between 4 and 8 weeks. It is highly recommended to be assisted by a specialized firm to ensure all procedures are carried out correctly.

Andorra vs Other Tax Havens: The Advantage Match

Compared to other attractive offshore jurisdictions, Andorra stands out in several areas:

Political and economic stability: Unlike some exotic tax havens, Andorra benefits from great stability and an excellent reputation.

Quality of life: Few offshore destinations can compete with the exceptional living environment that Andorra offers.

Geographical proximity: For European entrepreneurs, Andorra is much more accessible than destinations like the Cayman Islands or Seychelles.

Transparency: Andorra has made significant efforts in recent years to comply with international standards on tax transparency.

Balanced taxation: While some tax havens offer zero taxation, Andorra’s 10% rate remains very competitive while being more acceptable in the eyes of other countries.

These advantages make Andorra a particularly interesting option for entrepreneurs seeking a balance between tax optimization and credibility.

Social Obligations: An Advantageous System for Employers

The Andorran social system is favorable to employers:

Capped employer contributions: Employer social security charges are 14.5%, with a monthly cap of €6,000.

Reduced employee contributions: Employees contribute 6.5% of their salary.

Labor law flexibility: Andorran legislation offers some flexibility regarding employment contracts and dismissals.

Quality social coverage: Despite low contribution rates, the Andorran social protection system is effective.

These advantageous conditions allow companies to control their payroll while offering attractive conditions to their employees.

Opening a Bank Account for Your Business: Step-by-Step Guide

Opening a professional bank account is a crucial step. Here is the procedure to follow:

1. Choose an Andorran bank (Andbank, Morabanc, Crèdit Andorrà, etc.).

2. Prepare the necessary documents: company articles of association, identification documents for directors and shareholders, proof of address, business plan, etc.

3. Schedule an appointment with a bank advisor.

4. Present your project and provide the requested documents.

5. Wait for the file to be validated by the bank’s compliance committee.

6. Sign the account opening documents and make an initial deposit.

The process can take several weeks, as Andorran banks are very vigilant in combating money laundering. It is advisable to be completely transparent about the origin of funds and the nature of the planned activity.

The Most Promising Business Sectors in Andorra

Certain sectors offer particularly interesting opportunities in Andorra:

Tourism and hospitality: With its ski resorts and landscapes, Andorra attracts many visitors year-round.

E-commerce and digital services: The favorable taxation and modern infrastructure make Andorra an ideal location for digital businesses.

Financial services: The banking sector and wealth management are pillars of the Andorran economy.

Health and wellness: Specialized clinics and fitness centers are booming.

Luxury real estate: The high-end real estate market is dynamic, particularly thanks to foreign investors.

Renewable energy: Andorra is heavily investing in sustainable development and green technologies.

These sectors often benefit from additional tax incentives and active support from Andorran authorities.

Recruiting in Andorra: Keys to Building Your Team

To recruit staff in Andorra, here are some essential points to know:

Work permit: Non-European nationals must obtain a work permit, which can take several months.

Minimum wage: It is set at approximately €1,200 gross per month.

Working hours: The standard work week is 40 hours.

Paid leave: Employees are entitled to 30 days of paid leave per year.

Local recruitment: Recruiting Andorran residents or people already established in the country is encouraged.

Recruitment agencies: Several specialized agencies can help you find the profiles you’re looking for.

Training: Government assistance exists for employee training.

The Andorran labor market is relatively limited, so it may be wise to plan remote work solutions for certain positions to expand the candidate pool.