In this article we want to explain you how to create a company in Andorra and everything you need to develop your economic activity in Andorra.
Why create a company in Andorra?
Creating a company in Andorra is currently synonymous with being able to obtain great tax benefits.
Besides being able to develop your economic activity in a place with economic, legal and social security, you will be able to benefit from paying very low taxes for having carried out the incorporation of companies in Andorra.
Types of companies in Andorra
Depending on your activity, you will need to create a company in Andorra under the form of a limited company or under the form of a joint-stock company.
We help you to make this decision depending on your specific case:
Limited company (SA)
This type of company is created for those who seek to invest in the stock market and whose companies are based on a larger number of partners.
The required share capital is €60,000.
There is the option of this company being formed by a single partner, in which case it would be called a Sole Shareholder Company.
Limited company (SL)
On the other hand, the limited company is designed for companies with a smaller turnover, since the legal requirements are not as strict as with the public limited company.
In this case, the company law requires a minimum share capital of 3.000€ to be able to create the company in Andorra.
It is important that the capital stock is always in the company’s coffers, since if it is not, not having the capital stock is a cause for dissolution of the company.
The steps to register a company in Andorra
It is important for you to know that setting up a company in Andorra is not something that is relatively easy or fast. There is a lot of bureaucracy involved and that is why we want to save you all this.
Company name reservation
The first step to create a company in Andorra will be to request a NIA (Administrative Identification Number) for each of the partners who are going to create a company in Andorra.
This NIA usually takes between one and two days.
Once we have the AIN, the next step will be the reservation of the company name in the country. This step is very important, since we will obtain the corporate purpose and the name of the company that will be established later in the public deed and in the statute of the company in Andorra.
It is important to know that the name cannot be generic and if you intend to use the acronym AND or refer directly to the word ANDORRA, you will need a special authorization that will further delay the process of obtaining the reservation of the company name of the company in Andorra.
Foreign investment application
This application is a process that currently takes approximately one month.
It is an extensive form in which you must explain to the Government of Andorra who the investor is, what he/she has done during all these years and what he/she will do in Andorra during the coming years.
The foreign investment authorization is one of the documents necessary to detail in the public deed. Without this document, there is no option to create a company in Andorra.
You must take into account that in this procedure additional very important documents will be requested such as the apostilled declaration of criminal record of the country of nationality and residence of the investor partner of the company in Andorra, the Curriculum Vitae of the same one and the notarized apostilled photocopy of the DNI or passport of the partner in question.
Bank account opening and deposit of capital
Once we have obtained all the above documents, it is time to request the pre-opening of the bank account for the company in Andorra.
This process is long and painstaking. At the moment the banking entities demand many requirements and documentation to be able to pre-open these accounts in constitution that will serve exclusively to deposit the share capital of the company in Andorra.
In addition to the company’s documents, the foreign investment authorization and all the documentation of the partner in his country of origin, as well as of the companies he may already own, must be presented to them.
In addition, it is specifically required to show to the bank:
- IRPF of the last years of the partner.
- Bank statement of one year of the partner.
- Proof of address of the partner.
- Explanation of the operation that the company will have in Andorra.
- Once all this information has been detailed, the bank in Andorra allows to make only the disbursement of the share capital of the company only to be able to proceed to create a company before a Notary in Andorra.
The account will be frozen until the process of incorporation of the company in Andorra has not been completed.
Incorporation of the company
Once the share capital of the company has been deposited in the bank, we will have all the necessary documents to be able to incorporate the company before the Notary of the selected country.
At this point we must take into account that a registered office will be necessary in order to be able to domicile the company in Andorra.
The domicile of the company at this point can be established in a coworking or in a business center.
Once we have carried out the procedure before the Notaries of the country, the company must be registered in the Register of companies of Andorra.
The inscription in the register of companies of the society has a term of approximately 15 days, where the businessman still does not have the society fully operative. Nevertheless, the company with its corporate name already has its own legal personality, which means that it can start signing contracts with companies in Andorra or in other countries.
Start of commercial activities
The last step for the creation of a company in Andorra is to obtain the commercial permit.
This authorization is the one that allows to culminate with the process of incorporation of the company in the Principality since with this registration you can start the commercial activity in the Principality.
Normally this is one of the last steps for your business when incorporating a company and it takes between 15 days and one month depending on the legislation applicable to your specific case.
The costs associated with creating a company
In relation to the costs of creating a company in the Principality, we must take into account that the lawyers’ fees will be around 4K-5K€, but you must also take into account the share capital and all the expenses of registration fees, any application for a company name or even the cost of the Notary must be added to all the general costs.
Therefore, between the deposit of 50K€ to obtain the residence in the Principality, the lawyers’ fees for the creation of the Andorran company and the registration fees you should have about 60K€ approximately to start your business in Andorra and be resident in the Principality.
Documents needed for company formation
As we have explained, for the incorporation of companies in Andorra, the procedures required for the creation imply the presentation of certain documentation.
Among such documentation, it will be necessary to present to the authorities of the Principality, an apostilled criminal record, your curriculum vitae, notarized photocopy of your ID card or passport in force apostilled, your last income tax and corporate tax returns in case you are an entrepreneur in your current country of residence, bank statement of one year where you can justify the origin of the funds and a proof of your current address.
All these documents, in any case, seek to clarify the origin of the funds you contribute to the Principality.
Contact Us
If you have any doubts about how to proceed with the creation of a company in Andorra or how to change your tax residence in the Principality, we can help you without obligation.
It is important that you know which type of residence is more suitable to your personal and professional condition, since not in all cases is applicable the change of residence to the country or simply the creation of a company in Andorra.
You must take into account that when creating a company in Andorra it is very important that you meet the requirement of substance in the Principality. This is fulfilled through the residence of the investment partner in the country.
However, it could also be fulfilled in the case that the company in Andorra enjoys absolute independence from the investment partner and that all the effective decision making is carried out directly from the Principality through the hiring of an employee (it can be part-time) and the renting of a space for the company (an office).
That is why not all businesses are suitable to move to Andorra, therefore, ask us for advice without obligation so that we can assess your professional economic activity and so we can advise you in the best possible way.
