Registering a company in Andorra is doing business in a state that offers entrepreneurs preferential terms, especially in terms of taxation and labor costs. Andorra has undergone many changes in the legal framework regarding the formation of enterprises and their ownership. Previously, foreign ownership of companies was limited to 49% of the capital. The new reforms introduced fundamental changes to the old legislation.
Currently, the laws of the country have been transformed, as a result of which 100% foreign ownership has become available. Due to its unique location in the “heart” of Europe, a state is an attractive place for starting a business. To facilitate the process of registering a company in the Principality of Andorra, it is necessary to know the types of business structures that are available, as well as the requirements that need to be fulfilled to start a business in Andorra.
The most common form of a company registered in Andorra is the Limited Liability Company (SL).
The sequence of actions when registering a company is as follows:
- It is necessary to determine:
- company name: must contain an indication of the organizational and legal form – SL, checked for uniqueness (at least two options);
- company structure (director, shareholder); – the size of the share capital (standard EUR 3,000) and the distribution of shares between shareholders;
- type of activity of the company: a detailed description for indication in the constituent documents; – the number of receipts to the company’s account, according to the plan: 1, 2, 3 years (for drawing up a short business plan);
- regions of the company’s activity and main counterparties.
- Payment for services.
- It is essential to present the following documents:
- copies of passports of the director, and shareholder with an apostille and a notarized translation into Spanish (civil and foreign passports);
- certificates of no criminal record with an apostille and a notarized translation into Spanish (not older than 3 months);
- if a legal entity becomes a shareholder, a full set of constituent documents will be required, including a certificate of good condition (or a similar document), if the company was registered more than a year ago.
- About documents for a shareholder’s company, they must disclose the ownership structure down to the ultimate owner (beneficiary). Concerning each company, a contract for maintenance and provision of audit services is signed with the beneficiary, as well as a questionnaire with client data is filled out.
- A feature of the procedure for registering a company with foreign shareholders (non-residents of Andorra) is the need to obtain approval for attracting foreign investment to the company. The process takes up to 3-4 weeks.
- Opening a bank account to pay for the MC in the minimum amount.
- It is necessary to indicate where the funds will come from (company, bank);
- give full information about the origin of funds, including:
- account statements for the past several years;
- reporting on the company, if funds will be transferred from a legal entity;
- main contracts explaining the receipt of funds.
- After receiving approval, the name of the future company is agreed with the Register, as a result of which the Certificate of the name reserve is issued.
- Submission of an application for registration of a company, which must contain:
- a notarized memorandum of association, as well as a draft charter of the newly created company;
- list of founders;
- list of officers (directors) of the company.
- For registration in the register, it is necessary to provide a complete set of constituent documents, including information on the size and par value of the share (stakes) and the procedure for their distribution among the shareholders (participants) of the company being created, on the directors of the company.
- A shareholder (legal entity or individual) is obliged to open an account with a bank in Andorra. After registration, several necessary procedures are also provided:
- obtaining a tax number (NRT);
- obtaining a trade license or special permit to engage in a particular activity;
- re-obtaining permission from public authorities to start directly business activities.
The general period for registration of companies is on average 5 weeks.
Key benefits when registering a company in Andorra:
- Company registration time – 1 month
- Registration of commercial activities – from 2 weeks
- Corporate income tax is only 10%
- Profits of holding companies are exempt from taxes
- One of the lowest tax rates in Europe: 4.5%
- Annual rates and company maintenance costs below 800 euros for operating companies