GSL / All offers / Company registration in Andorra: Limited Liability Company – SL.

Company registration in Andorra: Limited Liability Company – SL. Service offer

Major advantages of doing business in Andorra. Budget for setting up business in Andorra. Time frame for setting up business in Andorra. Step-by-step description of the company incorporation procedure

Major advantages of doing business in Andorra:

High standard of living and public safety, stable and reliable banking system, good environment

Ability to work with US dollars

Ability to open a local bank account to have the company and the bank in the same country

Corporate income tax rate is 10%

Attractive residence permit programs

Budget for setting up business in Andorra

Services
Fees (EUR)
Total cost of incorporation (including obtaining of permission to set up a company with foreign participation, notary’s fees, preparation and provision of the company’s original constitutive documents, documents issuing shares, compliance fee, and a company seal)
11,500
Assistance with bank account opening in Andorra
3,030
Office rent in Andorra for 1 year
see below for details
Total:
from 14,530

Time frame for setting up business in Andorra:

Company registration from 5 weeks;

Local bank account opening from 1 month (depending on the bank).

COMPANY INCORPORATION

The most common form of companies incorporated in Andorra is the Limited Liability Company (SL).

Step-by-step description of the company incorporation procedure:

1) Select:

company name to be checked for its availability (at least two names): the name must have an ending that denotes the type of entity – SL;

company structure (director, shareholder);

share capital (normally EUR 3,000) and distribution of shares between the shareholders;

company’s type of business: a detailed description to be included in the constitutive documents;

amounts to be received in the company’s account according to the plan: 1st, 2nd, and 3rd years (for making a short business plan);

company’s geography of business and main counteragents.

2) Pay fees for services

3) Provide the following documents:

copies of passports of the director and shareholder, with an apostille and a notarized translation into Spanish (internal and international passports);

certificates of no criminal record (not older than 3 months), with an apostille and a notarized translation into Spanish;

if the shareholder of the company is a legal entity, then a full set of constitutive documents will be necessary, including a certificate of good condition (or an equivalent document) if the company is older than a year. The documents of the corporate shareholder must disclose the ownership structure up to the ultimate (beneficial) owner.

For each company, a contract for administration and provision of audit services is signed with the beneficial owner, as well as a client information form is filled in.

4) Incorporation of a company with foreign shareholders

(Andorran non-residents) requires obtaining of an authorization to attract foreign investment to the company. The process takes up to 3-4 weeks.

5) Open a bank account to pay in the minimum share capital

It is necessary to indicate where the funds will come from (company, bank); give full information about the origin of funds, including: statements of account for the last couple of years; company’s financial statements if the funds will be transferred by a legal entity; main contracts explaining the nature of incoming funds.

Bank account opening is carried out in parallel with Step 4.

6) After the grant of authorization, the name of the future company is agreed with the Registry, as a result of which a Name Reservation Certificate is issued

7) Submit a company registration application

which must contain:

  • notarized memorandum and draft articles of the new company;
  • list of founding members;
  • list of officers (directors) of the company.

For registration in the register, it is necessary to provide a full set of constitutive documents, including the size and par value of shares (participation interests) and their distribution among the shareholders (members) of the new company, and details of the directors of the company.

8) A shareholder (whether legal entity or individual) is obliged to open an account with a bank in Andorra

After incorporation, there are also a number of necessary procedures:

obtaining a tax number (NRT);

obtaining a trade licence or a special permit to engage in a particular activity;

re-obtaining permission from government authorities in order to start business aivities.

The overall time to register a company is 5 weeks, on average

STRUCTURE

Directors

Only an individual can act as director, the minimum number of directors is 1. The director of the company should preferably be a resident of Andorra.

Shareholders

The company must have at least two shareholders (members), the requirement for Andorran companies to necessarily have a citizen of that country as shareholder was removed by the adoption of a new law on foreign investment in July 2012. The shareholder cannot be an offshore company (registration will be rejected).

Beneficial owner

Nominee ownership is expressly prohibited by law. The fine can be up to EUR 600 and be doubled in the event of a second offence.

The company’s register is kept at the registered office in Andorra and must contain the address of each shareholder (member) and the scope of their rights and obligations in relation to the company. A change of the company’s shareholders (members) and directors must be filed with the Companies Registry.

Share capital and shares

The minimum share capital of an Andorran company is EUR 3,000. The share capital must be fully paid up prior to incorporation.

The capital is deposited into a special corporate account at an Andorran bank, and the bank issues a special certificate addressed to the notary who handles the incorporation.

Bearer shares are not permitted. All shares in an Andorran company must be registered shares.

Registered office

It is necessary to have a physical office in Andorra: residential or non-residential premises, rented or owned by one of the company’s shareholders.

SUBSEQUENT ADMINISTRATION OF THE COMPANY

Companies registered in Andorra are required every year to submit to the Companies Registry an Annual Return – an annual report containing annual financial statements.

The financial statements include:

  • balance sheet;
  • profit and loss account;
  • statements of income, assets and cash flow.

The financial statements must be kept in the company’s office in Andorra.

An audit is optional. Involvement of an independent auditor is mandatory in the following cases:

  • the company’s total assets exceed EUR 3,600,000;
  • net sales exceed EUR 6,000,000;
  • the company has more than 25 employees.

VAT returns are submitted every quarter.

To prepare financial statements, it is necessary to provide supporting documentation, invoices issued and paid by the company, contracts, and statements of account.

Corporate income tax was introduced in 2013, the rate is 10%.

Income tax for non-residents

The general rate for individuals and legal entities is 10% (for services rendered to an Andorran legal entity or individual). For handling the payment of this tax, an official representative must be appointed.

It is important to remember that Andorra does not have double tax treaties (so there is a risk of double taxation in the non-resident’s country of domicile).

The VAT rates are as follows (VAT is not always levied):

  • 4.5% on most goods and services;
  • 1% on food, books, newspapers and magazines;
  • 0% on social and medical goods, as well as some basic essential goods;
  • 9.5% on banking services.

There is no withholding tax. However, there are special rules regarding taxation of savings of EU residents. The tax rate is 35% (arises from the relevant international treaty), and 75% of the tax amount is due to the country where the owner of the savings is resident.

The payroll tax rate (in the case of payment of salary) is 4.5% for the employee and 14.5% for the employer.

To assess the company’s tax burden, we recommend seeking tax advice (which can be arranged upon request).

Fees[1]

Services
Fees (EUR)
Total cost of incorporation (including obtaining of permission to set up a company with foreign participation, notary’s fees, preparation and provision of the company’s original constitutive documents, documents issuing shares, compliance fee, and a company seal)
11,500
Share capital
3,000
Local bank account opening
3,030
Annual maintenance (starting from the second year), not including preparation of financial statements
6,550
Office rent (up to 20 m2)
from 300 / month
Preparing and filing financial statements
100 – 400 / hour (depending on time spent)
Compliance fee. Payable in the cases of: renewal of a company, liquidation of a company, transfer out of a company, issue of a power of attorney to a new attorney, change of directorshareholderbeneficial owner, except the change to a nominee directorshareholder)
250 (standard rate – includes the check of 1 individual) + 50 for each additional individual (director, shareholder, or beneficial owner) or legal entity (director or shareholder) if such legal entity is administered by GSL; + 100 for each additional legal entity (director or shareholder) if such legal entity is not administered by GSL. 350 (rate for high-risk companies, including the check of 1 individual)

[1] The fees are valid as of September 2021

Are you interested in the offer?
18100 EUR
Download offer in PDF
Share on social media:
RU EN