If you are thinking of setting up a business in Andorra there are a number of questions you need to consider. The Principality of Andorra is a microstate bordered by France and Spain. Due to its unique location at the heart of Europe it is an attractive place to set up a business.
With the new foreign Direct Investment Law issued in June 2012, Andorra now has opened its borders to encourage Foreign Direct Investment. The country has a good infrastructure, fibre-optic Internet service throughout the whole country and a well-educated workface that basically speaks four languages (Catalan, Spanish, French and English).
Andorra is not a member of the European Union, nevertheless it uses the euro and the country enjoys a special status within the EU.
Its business opportunities and above all its new and attractive fiscal framework (Corporate tax of 10%, Personal Income Tax (IRPF) of 10%, Tax on the income of non-residents for tax purposes (IRNR) of 10% and General indirect tax of 4,5%), are the main reasons why entrepreneurs from Europe decide to come in Andorra.
There are two types of limited companies:
- Societat Limitada: small business entreprises with a minimum capital requirement of € 3.000.
- Societat Anònima: companies with minimum capital requirement of € 60.000.
And the basic steps to set up a company in Andorra are:
Register the Company name: The first step in setting up your company will be to obtain the reservation of the company name (Sol·licitud de reserva de denominació social).
Apply for an authorization from the Government to incorporate the company (foreign investment approval): With the reservation of the company name, you will be able to apply for the Government authorization which is an intensive process that requires you to provide a well-structured business plan; identification of the shareholders and directors including criminal-record from your country of birth and country of residence; description of the business development strategy in Andorra. The application form must be completed with the following documents: (i) The authorization for the corporate name; (ii) The draft articles of incorporation, (iii) Criminal record for each shareholder with an apostille of The Hague, and (iv) Copy of the Passport or ID for each shareholder duly apostilled.
Open a business bank account: Once you have the Government’s authorization and the authorization for the corporate name, you will need to open a business account with an Andorran bank and make a deposit of €3.000 (S.L.) or €60.000 (S.A.) – which is the minimum authorized share capital for a S.L. or S.A. Evidence of payment can be obtained in the form of a bank certificate which will be need to be provided to the Andorran Notary.
Deed of incorporation: The following step is to apply for the deed of incorporation to establish your company. This is the official document that states the key details of the Andorran company (name, address, details of the director, board members, shareholders, etc.). You will need to arrange an Andorra Notary appointment to sign the deed of incorporation.
Register the company to the Registre de Societats: With the original deed of incorporation obtained, the Notary will register the public document in the Trade Register of Andorra.
Apply for a Company Tax Identification Number (N.R.T): The following step to have a company legally incorporated under the Law of Andorra is to apply for your NRT which is your company tax number from Tributs Andorra.