Why create a company in Andorra
Andorra is a country that went from being considered a tax haven, to being a country with a modern jurisdiction and with a very low and transparent tax burden. The legislation has been changing, and currently creating companies in Andorra by foreign investors is much more feasible since the country is trained. So that new companies or existing ones benefit from the tax advantages that come with setting up a company in Andorra. This is why it is one of the most attractive countries in Europe and the world chosen by investors to create their companies in Andorra.
Procedures to create a company in Andorra
To create a company in Andorra, a series of obligatory official steps or procedures must be followed for its creation:
- Make a reservation request for company name. This step is necessary to differentiate our company from the rest of the companies in the different official organisms with which any type of communication is made. We must obtain the negative certification of the company name; This will guarantee that this name will be unique to us.
- Creation of the statutes of the company.
- Deposit the initial share capital in a bank in Andorra. An account must be opened by providing the documentation required by the chosen entity.
- Constitution of the company before a notary. Formalization of the statutes in a notary and inscription in the Andorran Mercantile Registry.
- Start of the activity. Once the inscription in the Mercantile Registry has been made, we will have a period of six months to start the activity of the company.
Advantages of creating or setting up a company in Andorra
- Strategic location: It borders in the north with France and in the south with Spain. And is about two hours from two major cities such as Barcelona in Spain and Toulouse in France.
- Unbeatable infrastructures: The per capita income in Andorra is one of the highest in Europe. The whole country has high-speed internet, a large health infrastructure, and trilingual teaching in schools and universities.
- Agreements with other countries: Andorra currently has 7 double taxation agreements, which aim to avoid cases of international double taxation, carrying out a series of measures and thus involving the two contracting countries. These countries are: Spain, France, Luxembourg, Liechtenstein, Portugal and the United Arab Emirates.
- Investment: The creation of companies in Andorra facilitates obtaining the residence for entrepreneurs and directors, and it greatly appreciates foreign investment.
- Taxes in Andorra: Income tax is between 5 and 10%, and corporate tax is 10%, being the country with the lowest rates in Europe. The contribution to social security is among the lowest in Europe too. VAT on sales is 4.5%, and there is also no inheritance taxes.
Types of business entities in Andorra
There are two types of models for creating companies in Andorra, which are:
Sociedad Anónima (SA) or public limited company, whose minimum capital to create these companies is 60,000 euros.
Sociedad Limitada (SL) or limited liability company, whose minimum capital is 3,000 euros.
To create any company in Andorra, you must have your fiscal domicile in the Principality, although if your suppliers, clients or shareholders have different locations.
The companies created in Andorra, in addition to having their address, must have an administrator, regardless of the activity they perform.
All the companies created in Andorra have a tax system very similar to Spain, and must file tax returns quarterly and annually.
Labor costs and wages in Andorra
Keep in mind that when a company is created in Andorra, compared to France or Spain, the costs will be lower, where the Social Security expense is an average of 15% lower.
On the other hand, salaries in Andorra are estimated at an average of € 2,400 / month, with a minimum wage of € 1,376.27 per month. In this way, tax savings on profits are an average of 30% less, both in Spain and France.
Other advantages of creating a company in Andorra
Some of the non-fiscal advantages to create your company in Andorra are that it is a great country to live in, because of its spectacular landscapes, with great and unbeatable ski slopes for the lovers of this sport. But it also have many other advantages:
- Its direct routes of communication with Spain and France.
- The communication channels are in constant improvement. Right now, the country already offers 100% fiber optic coverage throughout the territory, while the average coverage throughout the EU is only 21%.
- It is a very attractive destination to create online sales companies and freelance jobs.
- Office rents go from € 400, which are economic prices compared to Spain and France.
- Municipal expenses do not represent more than € 500 per year, which leads to greater benefits for companies in Andorra.
- Its health system is very competitive, since it have qualified medical teams and also coverage in other countries, thanks to extraterritorial agreements.
- Its educational system offers three different models of great quality and without cost, and other options of private and specialized education.
