Starting a Business in Andorra: A Practical Guide

Published on October 3, 2025 and written by Cyril Jarnias

Andorra, a small country nestled between France and Spain, is attracting more and more entrepreneurs eager to benefit from its advantageous tax system and exceptional quality of life. But is it truly a startup paradise? What legal structures should you choose? And how do you finance your project? Let’s dive into the details to understand how to launch your startup in Andorra in 2025.

Andorra, the New Startup Eldorado?

Andorra offers numerous advantages for innovative entrepreneurs:

Ultra-competitive taxation: With a corporate tax capped at 10%, Andorra offers one of the most attractive tax regimes in Europe. Startups can therefore reinvest a larger portion of their profits into their growth.

A business-friendly environment: The Andorran government has implemented various measures to attract innovative companies, such as simplified business creation procedures and innovation grants.

Exceptional quality of life: Nestled between mountains and ski resorts, Andorra offers a privileged living environment that appeals to many entrepreneurs seeking a balance between professional and personal life.

A strategic geographical location: Just a few hours’ drive from major cities like Barcelona or Toulouse, Andorra provides easy access to French and Spanish markets.

However, certain challenges must also be considered:

– A limited domestic market (approximately 80,000 inhabitants) – Sometimes complex administrative procedures for foreigners – A relatively high cost of living

Which Legal Structure for Your Andorran Startup?

Several legal forms are available to entrepreneurs wishing to create their startup in Andorra:

Limited Liability Company (SL): The Most Common Choice

Advantages: – Minimum share capital of only €3,000 – Limited liability for partners – Management flexibility

Disadvantages: – Less credible for raising significant funds – Restrictions on transferring shares

Public Limited Company (SA): For Ambitious Projects

Advantages: – More credibility with investors – Ability to issue shares – Suitable for projects requiring significant fundraising

Disadvantages: – Minimum share capital of €60,000 – Heavier creation and management formalities

Sole Proprietorship: For Starting Solo

Advantages: – Simplicity of creation and management – No minimum share capital

Disadvantages: – Unlimited liability for the entrepreneur – Less credible for raising funds

How to Finance Your Andorran Startup?

Several options are available to entrepreneurs to finance their startup in Andorra:

Government Grants: A Welcome Boost

The Andorran government offers various grants to support innovation and business creation:

– Grants for innovation and R&D – Preferential rate loans – Temporary tax exemptions

Business Angels: Local Investors to Win Over

Andorra has a growing community of business angels, often successful entrepreneurs or wealthy investors attracted by the country’s advantageous tax system. They can provide not only funds but also their expertise and network.

Venture Capital Funds: For Ambitious Projects

Although the venture capital market is still limited in Andorra, we are seeing the emergence of a few funds specializing in innovative startups. Moreover, proximity to Barcelona provides access to a more developed ecosystem.

Crowdfunding: An Option to Explore

Crowdfunding platforms can be an interesting alternative, especially for projects with a social or environmental dimension. However, be aware of specific regulatory constraints in Andorra.

Andorran Banks: Essential Partners

Local banks offer financial products tailored to startups, such as innovation loans or specific credit lines. They can also play a key role in opening bank accounts, a step that can sometimes be complex for foreign entrepreneurs.

Key Steps to Launch Your Startup in Andorra

1. Develop a solid business plan adapted to the Andorran market 2. Choose the most appropriate legal structure (SL, SA, etc.) 3. Obtain foreign investment authorization from the government 4. Open a bank account in Andorra (a sometimes complex step) 5. Form the company before a notary 6. Register with the Andorran trade register 7. Obtain necessary licenses and permits according to your activity 8. Recruit your first employees (be mindful of local hiring quotas)

Expert advice: Get assistance from a lawyer or firm specializing in business creation in Andorra. Procedures can be complex for foreigners, and a local expert will save you valuable time.

Conclusion: Andorra, Fertile Ground for Innovative Startups

Andorra offers an environment conducive to startup development, combining attractive taxation, exceptional quality of life, and strategic geographical location. Although the domestic market is limited, the Principality can serve as an ideal base to conquer French and Spanish markets.

However, doing business in Andorra requires good preparation and the ability to navigate a sometimes complex administrative environment. With the right support and an adapted strategy, your Andorran startup has every chance to prosper in this small country with big ambitions.