Starting a Business in Andorra
A Complete Guide to Starting a Business in Andorra
Content updated in 2026 by Josep García, CEO and Founding Partner of Advantia Assessors
Starting a business in Andorra is a process that, provided all the necessary documentation is in order, can be completed in a few weeks and has been open to foreign investors since the 2012 Foreign Investment Act, which allows for 100% foreign ownership.
Below, we’ll explain, step by step, which legal structure to choose, what steps you need to take, how much it costs, and what taxes you’ll have to pay.
A Complete Guide to Starting a Business in Andorra
1. Advantages of Starting a Business or Incorporating a Company in Andorra
Competitive Taxation
Maximum corporate income tax rate of 10% (with reductions that can lower it to 2% or even provide an exemption, depending on the business activity), IGI (equivalent to VAT) at 4.5%—the lowest in Europe—and an annual maintenance fee of less than €850 for ordinary companies.
Reduced labor costs and social security contributions
The Andorran labor market stands out for its high cost competitiveness: the official average wage stands at €2,672.52 per month and the minimum wage at €1,568.67 per month, with very low employer Social Security contributions set at 15.5%. In contrast, although neighboring countries such as Spain and France have similar or higher average gross wages (with the latter reaching €3,600 per month), social security contributions exceed 30% in both countries, which significantly increases the actual labor cost per employee compared to Andorra.
Political and Legal Stability
With legislation that complies with European directives.
Strategic location
Between France and Spain, less than 3 hours from Barcelona and Toulouse.
Quality of Life
Ranked 5th in the world for life expectancy, among the safest countries on the planet, with three public education systems (Andorran, French, and Spanish—including both religious and secular schools). It also offers a selection of prestigious private English-language schools. In Andorra, only 5% of the country consists of urban areas and infrastructure, with the rest being natural terrain. Air quality is excellent, and noise pollution is low.
2. Limited Liability Company (SL) vs. Corporation (SA): Which One Should You Choose?
In practice, public limited companies (SA) and limited liability companies (SL)—or their single-member versions, SAU and SLU—account for the majority of business incorporations in Andorra. Both offer separate legal personality and limited liability: the members are liable only to the extent of their capital contributions.
| Definition | Limited Liability Company (LLC) or Single-Member Limited Liability Company (SLU) | Corporation (SA) |
|---|---|---|
| Minimum share capital | 3,000 € | €60,000 |
|
Incorporation costs (notary fees, registration procedures, and legal expenses) |
≈ 1,000 € | ≈ 1,500 € |
| Annual registry maintenance | ≈ 850 € | ≈ 950 € |
| Recommended Profile | Small or medium-sized companies, either single-owner or family-owned, with operations located | Companies with higher revenue, those expecting new shareholders, and holding companies |
From a tax perspective, there are no differences between an SA and an SL: both are subject to the same tax framework, so the choice depends on the investment amount and the corporate structure, not on the tax burden.
Every Andorran company
It is required to have a registered office and a director, and must prepare periodic reports and file the corresponding tax returns.
3. Steps to Form a Company in Andorra
4. Required Documentation
The documents required to start a business in Andorra depend on whether the process is carried out by an individual or a corporation.
Copy of passport with Hague Apostille
Criminal record certificate with a Hague Apostille (country of origin and country of residence)
A photocopy of the articles of incorporation bearing a Hague Apostille.
A photocopy of the passport of the company’s representatives or authorized agents, bearing a Hague Apostille
A photocopy of the power of attorney for the company’s representatives or authorized agents, bearing a Hague Apostille
Criminal record certificates from the country of origin and the country of most recent residence of the company’s representatives or authorized agents, duly legalized with the Hague Apostille
An original copy of the board’s certification approving the requested foreign investment.
Statement of Beneficial Ownership. (Ultimate Beneficial Owner)
Certificate from the Registry confirming that the company is still registered with the Commercial Registry.
5. Taxation of Your Andorran Company
Andorra has signed Double Taxation Agreements (DTAs) with Spain, France, Portugal, and other countries (for a total of 24) to prevent the same income from being taxed twice and to provide legal certainty for investors.
| Tax | Rate |
|---|---|
| Corporate Income Tax (CIT) | 10% standard rate, with the possibility of tax reductions or credits depending on the business activity |
| IGI (equivalent to VAT) | 4.5% standard rate; reduced rates for sectors such as health, education, and culture |
Personal Income Tax (if you work for or manage the company as a resident) |
Exempt up to €24,000; 5% between €24,001 and €40,000; 10% on amounts over €40,000 |
| Nonresident Income Tax | Applies to dividends distributed to nonresident shareholders |
| Local Taxes (General) | Vary by municipality: business registration tax, public utility fees |
6. What administrative tasks do we handle for you at Advantia?
We handle the entire process so you don’t have to make any unnecessary in-person visits:
- Drafting of Bylaws
- Application for an Administrative Identification Number (NIA) for Investors
- Application for a Foreign Investment Permit
- Reservation of the Company Name
- Application for a business license from the relevant local government (city council)
- Assistance with opening a bank account
- Accompaniment to the notary's office for the signing of the articles of incorporation
If your case involves a business relocation (rather than a new incorporation), we also handle the entire process with the Commercial Registry to ensure that the company does not lose its legal status at any time.
Are you also looking to establish residency in Andorra at the same time as your company?
Check out our guide on how to obtain your tax residency in Andorra.
7. Frequently Asked Questions About Starting a Business in Andorra
Between administrative fees and official charges, the approximate cost is around €4,500 in fees plus €2,000 in charges and other costs, plus the minimum authorized capital (€3,000 for an SL or SLU, or €60,000 for an SA).
With all the necessary documentation in order, the entire process usually takes about 6–8 weeks, although the residence permit and associated work permit (if applicable) can add up to 4 additional months.
Yes. A nonresident may incorporate an Andorran company without restrictions, provided they first apply for a foreign investment permit.
Not necessarily—you can set up the company and continue to live in your home country, although in that case you won’t be eligible for the tax benefits of Andorran tax residency as an individual.
Starting a business involves incorporating an Andorran company from scratch; relocating a business involves moving the registered office (or transferring the business to a new Andorran company) while maintaining business continuity.
Would you like to start your own business or company in Andorra?
We make it easy for you!