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Benefits of creating a patrimonial company

2020-10-12

Heritage company in Andorra

A patrimonial company is one that does not carry out any type of economic activities. Therefore, it is not directly related to money or credit rights. Nor with production or distribution activities, where goods and services are offered, or people are employed.

If not, it is a company which is based on activities related to the purchase of real estate or securities. It is used mainly for the rental of real estate, the possession of real estate and the possession of securities.

Among the benefits obtained in a patrimonial company are:

  • Reduce expenses related to real estate
  • It allows the correct handling of successions, as well as obtaining tax savings.

Therefore, equity companies should not pay taxes and neither should they pay taxes. This allows you to save considerably, since you will only have to pay taxes in the case of corporate taxes.

In addition, through the patrimonial society it is possible to insure the family patrimony. Making it remain protected despite scenarios, such as bankruptcy of companies. Thus moving away from situations where assets could be seized.

However, before creating an equity company, it is important to review different alternative scenarios. In order to ensure that it generates much more savings than expenses. Like this is the society whose benefits are conducive to the business that is being carried out.

You need to know how it differs from other companies and the steps to create an equity company.

Differences between a patrimonial company and other companies

When talking about patrimonial society there are often confusion as to what it means. As it can also be confused with other companies, including the limited company, the corporation and the partnership. So it is essential to know in depth what each of these implies.

Thus, the main difference between a patrimonial society and the others is based on economic activities. Since, as mentioned above, a patrimonial company must not imply an economic substance, nor participation of other companies.

Some examples that allow distinguishing when it is not a patrimonial company include the fact of having hired other people. Either so that they are responsible for completing a full day when renting the properties. Nor will it be a patrimonial-type company if you have a partnership with other companies and this implies capital.

In the event that the company is related to a holding company and has a stake of more than 50%. This will not be considered as a patrimonial society due to the use of materials and human personnel.

Types of equity companies:

  • Property patrimonial society
  • Property rental property company
  • Heritage holding company

Steps to create a company in Andorra

Before creating a company in Andorra, it is essential to know the steps necessary for it to be approved. Therefore, during an average period of 60 days each of the corresponding stages must be met. Established by the Andorran government, which supports all companies that wish to invest abroad.

  1. Request an authorization to be able to make a foreign investment.
  2. Formulate the request by which the name of the company is established in accordance with certain guidelines.
  3. Request the incorporation of the company.

Categories : Legislation

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12-10-2020

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