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How to start a business in Andorra: Requirements and steps
Find out here how you can open a company in Andorra, from taxes, steps and advice.
Andorra has spent years strengthening its position as one of Europe’s most attractive destinations for foreign entrepreneurs and business owners. Its figures speak for themselves: The corporate tax rate stands at 10%, VAT (IGI) applies a basic rate of 4.5%, and dividends from Andorran companies remain tax-exempt within the country. Additionally, Andorra offers a strategic location between Spain and France, modern digital infrastructure, and a quality of life that’s difficult to match.
Furthermore, Andorran legislation has allowed 100% foreign-owned companies since 2012, greatly facilitating international investment. This means that, regardless of your nationality or residency, you may open a company here as long as you meet the legal requirements.
Here, we explain everything you need to know: Costs, company structures, legal requirements, taxation, and the complete step-by-step incorporation process. If you’re considering relocating your business or starting from scratch in the Principality, keep reading.
How Much Does It Cost to Starting a Business in Andorra?
Costs mainly vary according to the company structure and whether you handle the process independently or with support from a local consultancy.
Andorra offers two main company structures: The Public Limited Company (SA), requiring minimum capital of €60,000 ($66,000), and the Limited Liability Company (SL), requiring minimum capital of €3,000 ($3,300). You must deposit this capital into an Andorran bank account during incorporation.
Besides share capital, you must also consider additional expenses:
- Notary fees: The cost of the deed of incorporation before an Andorran notary varies according to the complexity of the articles of association.
- Commercial Registry: Company registration fees.
- Local consultancy or advisor: Highly recommended for foreigners, fees usually range between €1,500 ($1,650.00) and €4,000 ($4,400.00) depending on the service.
- Registered office: If you don’t own office space, you may hire a company address service, usually costing between €500 ($550) and €1,500 ($1,650) annually.
- Commercial opening licence: Processed before the comú (local council) of the selected parish.
If you plan to reside in Andorra as the company administrator and obtain active self-employed residency, you must deposit €50,000 ($55,000) with the Andorran Financial Authority. This deposit generates no interest, although authorities refund it when leaving the country, provided no outstanding debts exist.
If you’d like to understand local expenses better, visit our guide about the cost of living in Andorra. We also recommend learning more about taxes in Andorra and the advantages and disadvantages of living in Andorra.
Which Types of Companies Can You Open in Andorra?
The most common legal structures in Andorra include the Limited Liability Company, Public Limited Company, General Partnership, and sole proprietorships. Here’s a summary of each one:
Limited Liability Company (SL): This remains the most popular option for small and medium-sized businesses because it requires lower minimum capital of €3,000 ($3,300). Shareholders’ liability stays limited to contributed capital, protecting personal assets against debts. It perfectly suits digital entrepreneurs, freelancers, and self-employed professionals.
Find more details here about where to stay in Andorra for long-term stays.
Public Limited Company (SA): Designed for larger projects with more complex corporate structures or higher business volume. Minimum share capital reaches €60,000 ($66,000), and the company may list publicly if it meets specific requirements.
Single-Member Limited Liability Company (SLU): Ideal for entrepreneurs wishing to operate independently. It functions like the standard SL structure, requiring minimum capital of €3,000 ($3,300).
Commercial branch: Companies may operate through a secondary establishment with permanent representation and certain management autonomy. Opening companies or branches through foreign investors requires a public deed before an Andorran notary and remains subject to foreign investment legislation.
Requirements for Starting a Business in Andorra
You don’t need Andorran tax residency to open a company. Any foreign citizen may incorporate an Andorran company, provided they comply with legal requirements.
The main requirements are:
- Foreign investment authorisation: Non-residents wishing to invest in Andorra must hold at least 10% participation in the company and request an Andorran Identification Number beforehand.
- Registered office in Andorra: Every Andorran company must hold a physical registered address within the country, whether an office, coworking space, or commercial premises. This address must appear in the Companies Registry and before the tax authority (AREB).
- Andorran bank account: Opening an account with a local bank and depositing the minimum share capital remains mandatory. If you’re exploring options, this guide reviews the best banks in Andorra for foreigners.
- Administrator: Every company in Andorra must appoint at least one administrator, whether resident or non-resident, capable of making strategic and operational decisions.
- Personal documentation: Apostilled passport, apostilled criminal record certificate from your nationality and residency country, and a project report justifying the origin of funds.
- Company bylaws: These must include the legal structure, company name, business purpose, and share capital.
The complete incorporation process usually takes between four and eight weeks, although timelines may vary according to the company structure and whether the shareholder remains resident or foreign.
Taxes for Starting a Business in Andorra
One of the Principality’s greatest attractions remains its internationally recognised and competitive tax system. These are the main taxes affecting companies:
Corporate Income Tax (IS): Tax rates range between 2% and 10%. International economic activities may benefit from the reduced 2% rate if they meet the special regime requirements.
General Indirect Tax (IGI): This represents Andorra’s equivalent of VAT. The standard rate stands at 4.5%, significantly lower than many Spanish VAT (21%) or French VAT (20%).
Personal Income Tax (IRPF): The nominal personal income tax rate stands at 10%.
Dividends: Dividends from Andorran companies remain exempt from taxation within the country.
Double taxation agreements: Andorra maintains agreements preventing double taxation on the same income.
An important detail deserves attention: If the entrepreneur maintains Euopean residency, their personal taxation will remain in their home countries, while authorities may consider the company a European tax resident if it lacks genuine substance in Andorra. Therefore, proving real business activity within the Principality remains essential.
Steps for Starting a Business in Andorra
Below, we explain the complete process step by step:
Step 1: Obtain Your Administrative Identification Number (NIA)
The process begins by requesting the digital certificate and Administrative Identification Number (NIA), both required for managing official procedures. You must also legalise your personal documentation.
Step 2: Request Foreign Investment Authorisation
Foreign investors wishing to acquire more than 10% of share capital must request foreign investment authorisation from the Andorran Government, submitting personal documentation, a project report, proof of fund origins, and a criminal record certificate. This authorisation may take between 30 and 60 days.
Step 3: Reserve the Company Name
We recommend proposing up to three names in order of preference. Authorities may take up to 10 days to respond. This procedure takes place before the Andorran Companies Registry.
Step 4: Open a Bank Account and Deposit the Capital
You must submit a bank account opening request together with all documentation required by the financial institution, clearly explaining the business activity, source of funds, and account holder profile. Pre-authorisation may take between one and four weeks. Once approved, you must deposit the minimum share capital.
This guide explains in greater detail how to open a bank account in Andorra, including pricing and required steps.
Step 5: Draft the Bylaws and Sign Before a Notary
You must draft the company bylaws and formalise them through a public deed before a notary, thereby legally incorporating the company. This step officially formalises the business from a legal perspective.
Step 6: Register with the Commercial Registry and Obtain the NRT
The company becomes officially registered with the Commercial Registry. From that moment, it has six months to begin operations, during which it must obtain the NRT (Tax Registration Number) and register its employees.
Step 7: Request the Commercial Opening Licence Before the Comú
At this stage, you must already have the company address confirmed, together with an electrical compliance certificate for the office or premises and a valid fire extinguisher maintenance contract. The premises must also meet minimum requirements of 20 m², electrical installation, and fire extinguisher maintenance.
Internet for Business Trips to Andorra
If you travel to Andorra to manage your company procedures, maintaining reliable connectivity remains essential. With Holafly’s monthly plans, you can stay connected during every business trip without depending on unknown networks or paying excessive roaming charges.
Their Always On service guarantees uninterrupted coverage across more than 70 countries, including 1 GB free every month, making it ideal for entrepreneurs managing businesses worldwide without interruptions. Additionally, this guide explains more about the best VPN for Andorra.
Frequently Asked Questions About Opening a Company in Andorra
Yes. Any foreign citizen may incorporate an Andorran company, provided they comply with legal requirements such as foreign investment authorisation.
The complete process usually takes between four and eight weeks, depending on the company structure and whether the shareholder remains resident or foreign.
Andorra has stopped being considered a “tax haven” and has become a fiscally competitive country, internationally recognised and open to foreign investment.
The Limited Liability Company (SL) remains the most popular structure for small and medium-sized businesses because it requires lower minimum capital of €3,000 ($3,300) and offers a simpler structure.
No, although it remains highly recommended. Even though procedures follow standardised processes, working with specialised local firms helps accelerate incorporation and ensures everything gets completed correctly.
