Written and reviewed by the Axior Global Advisory Team — Andorra-based tax, corporate and residency advisors.
Andorra Company Formation in 2026: Complete Guide (Costs, Steps, Taxes)
TL;DR: Forming a company in Andorra in 2026 means incorporating a Societat Limitada (SL) with just EUR 3,000 minimum capital (or a Societat Anònima (SA) with EUR 60,000), obtaining foreign investment authorisation if you are a non-resident shareholder, and registering with the Companies Registry, the Registre de Comerç and CASS. The payoff: a flat 10% corporate tax (special regimes as low as 2%), 4.5% IGI (the lowest VAT-type tax in Europe), Andorran-source dividends exempt from personal income tax for Andorran residents, 0% wealth, inheritance, gift and exit taxes, and access to 22 double tax treaties. Since the liberalisation of foreign investment, non-residents can own 100% of an Andorran company. Realistic end-to-end timeline: roughly 2–3 months. Company formation is also the standard gateway to active (self-employed) residency.
Key Facts: Andorra Company Formation (2026)
| Item | Detail |
|---|---|
| Main company forms | SL (private limited) · SLU (single-shareholder SL) · SA (public limited) |
| Minimum share capital | EUR 3,000 (SL/SLU) · EUR 60,000 (SA) — Llei 20/2007 |
| Foreign ownership allowed | 100% (foreign investment authorisation required for non-residents) |
| Corporate tax (IS) | 10% flat; qualifying special regimes at 2% |
| VAT (IGI) | 4.5% standard rate |
| Dividends to Andorran-resident shareholders | Exempt from IRPF (no second layer of tax) |
| Social security (CASS) | 22% of salary total — 15.5% employer + 6.5% employee |
| Wealth / inheritance / gift / exit taxes | 0% — none exist |
| Double tax treaties | 22 in force (Estonia DTA in force 24 March 2026) |
| Typical formation timeline | ~2–3 months end to end |
| Typical uses | Trading & consulting companies, holding structures, e-commerce, professional services |
Can a Foreigner Own 100% of an Andorran Company?
Yes. Since Andorra liberalised its foreign investment framework, non-residents can own up to 100% of an Andorran company in almost all sectors. The practical difference from incorporating as a local is one extra step: any non-resident acquiring a significant stake must first obtain foreign investment authorisation from the Andorran government before the incorporation deed can be signed. The application is a formality-driven review (identity, source of funds, business plan, criminal record certificate), not a discretionary investment screen for ordinary businesses, and it is typically resolved within a few weeks.
This matters because it removes the historical need for local nominee partners. Today an international entrepreneur can be the sole shareholder and sole administrator of an Andorran SLU — a structure Axior sets up routinely for consultants, traders, e-commerce operators and holding companies. For the broader legal context of what changed recently, see our pillar hub: Andorra Law & Tax Changes in 2026.
What Types of Company Can You Form in Andorra?
The workhorse is the Societat Limitada (SL) — a private limited company with EUR 3,000 minimum capital; the Societat Anònima (SA), with EUR 60,000 minimum capital, is reserved for larger ventures. According to Llei 20/2007, de societats anònimes i de responsabilitat limitada (the Andorran Companies Act, available on the Portal Jurídic), the main forms are:
The SL (Societat Limitada) requires EUR 3,000 of share capital, fully paid at incorporation, and suits the vast majority of SMEs, consultancies and holding vehicles. When it has a single shareholder it is designated SLU (Societat Limitada Unipersonal) — the standard choice for solo founders. The SA (Societat Anònima) requires EUR 60,000 of capital and is used for larger businesses, regulated activities and companies planning to bring in multiple investors. Branches and representative offices of foreign companies are possible in some cases but are rarely tax-efficient compared with a local subsidiary.
All companies need a registered office in Andorra, at least one administrator (director), and statutory accounting books filed annually.
How Do You Register a Company in Andorra? (Step by Step)
The process runs: name reservation → foreign investment authorisation → capital deposit → notarial deed → registration — realistically 2–3 months end to end. Here is the sequence Axior manages for clients:
Step 1 — Company name reservation. You request a denominació social from the government, submitting several name options in order of preference.
Step 2 — Foreign investment authorisation. Non-resident shareholders apply for prior authorisation, filing passports, a clean criminal record certificate (apostilled), a CV and a description of the planned activity. This is usually the pacing item in the timeline.
Step 3 — Bank account and capital deposit. You open a corporate account with an Andorran bank and deposit the share capital (EUR 3,000 for an SL). Andorran banks apply thorough compliance and source-of-funds checks — well-prepared documentation here saves weeks.
Step 4 — Notarial deed of incorporation. The company is constituted before an Andorran notary, adopting its bylaws (estatuts) and appointing the administrator(s).
Step 5 — Registration. The company is entered in the Registre de Societats (Companies Registry), then obtains its registre de comerç (trade licence) tied to premises in the parish where it will operate, its NRT tax number, and — once it has payroll — registration with CASS, the Andorran social security system.
Government, notary and registry fees are modest by international standards; combined professional and official formation costs typically run in the low thousands of euros, depending on complexity (exact quotes on request — fees vary by activity and parish).
How Much Tax Does an Andorran Company Pay?
A flat 10% on profits — and as little as 2% under qualifying special regimes — with no second layer of tax on dividends paid to Andorran-resident shareholders. The corporate income tax (IS, Impost sobre Societats) applies at a single 10% rate on worldwide profits. Qualifying activities under Andorra’s special regimes can reduce the effective rate to around 2%. For a full breakdown, see Andorra Corporate Tax: the 10% Flat Rate Explained.
Three further numbers complete the picture. IGI, Andorra’s VAT equivalent, is 4.5% — the lowest general indirect tax rate in Europe — with registration generally required once business turnover passes EUR 40,000. Dividends distributed by an Andorran company to Andorran-resident individual shareholders are exempt from IRPF, so the total tax burden on a resident owner-operator’s distributed profits is effectively the 10% paid at company level. And there is no wealth tax, no inheritance or gift tax, and no exit tax — see Andorra’s 0% Wealth, Inheritance and Gift Taxes.
On payroll, CASS contributions total 22% of gross salary — 15.5% borne by the company and 6.5% by the employee. Salaries themselves fall under the personal income tax (IRPF): 0% on the first EUR 24,000, 5% to EUR 40,000, 10% above — see Andorra Income Tax (IRPF): Rates, Brackets and Exemptions.
Does Forming a Company Give You Andorran Residency?
Not automatically — but it is the standard basis for active (self-employed) residency, which is the most cost-effective route to living in Andorra. Owning and running an Andorran company allows you to apply for a residència per compte propi permit, which requires genuine economic activity and living in Andorra most of the year. Unlike passive residency, which under Law 2/2026 (the Omnibus 2 law, in force 13 February 2026) requires a EUR 1,000,000 minimum investment plus a EUR 50,000 non-refundable state contribution to the AFA, the active route is built on your business rather than a seven-figure investment.
The two routes suit different profiles: entrepreneurs and professionals who will actually work from Andorra take the active route via their company; investors and retirees who want residency without local employment take the passive route. Full requirements, costs and process for the company-based route are in our dedicated guide: Andorra Active & Self-Employed Residency: Requirements, Costs, Process.
What Substance Do You Need? (And What to Avoid)
Andorra expects real companies: a registered office, a genuine activity, proper accounting — and increasingly, demonstrable substance if you want treaty benefits. An Andorran company must keep statutory accounts and file an annual corporate tax return. Companies relying on Andorra’s 22 double tax treaties (the network grew to 22 when the Andorra–Estonia DTA entered into force on 24 March 2026) should be able to show management and decision-making actually happen in Andorra — a locally resident director, a real office and local expenditure all help.
What to avoid: letterbox setups with no activity, mixing personal and company funds, and leaving a company dormant without meeting its filing obligations — dormant entities still have compliance duties, as we explain in Andorra Dormant & Holding Company Compliance. Poor substance is the single most common reason foreign tax authorities challenge Andorran structures.
Frequently Asked Questions
How much does it cost to set up a company in Andorra?
The statutory minimum is the share capital: EUR 3,000 for an SL (EUR 60,000 for an SA), which remains the company’s working capital. On top of that come government, notary and registry fees plus professional fees — typically a low-thousands total depending on complexity. There is no “golden visa style” investment requirement to form a company.
How long does Andorra company formation take?
Plan for roughly 2–3 months end to end. The foreign investment authorisation and the bank’s compliance review are usually the two pacing items; complete, apostilled documentation shortens both.
Can I form an Andorran company without living in Andorra?
Yes — non-resident shareholders are permitted with foreign investment authorisation. But tax residency of the company depends on where it is effectively managed, and non-resident owners cannot claim Andorran personal tax benefits. Most owners who want the full advantage (10% corporate tax plus 0–10% IRPF plus exempt dividends) relocate under the active residency route.
What taxes will my Andorran company pay?
Corporate tax at a flat 10% (2% under qualifying special regimes), IGI at 4.5% on sales, and 15.5% employer CASS on payroll. Dividends to Andorran-resident individual shareholders are exempt from IRPF. There is no wealth, inheritance, gift or exit tax. According to the consolidated law on the Portal Jurídic d’Andorra, these rates are unchanged in 2026.
Do I need an Andorran partner or director?
No local partner is needed — 100% foreign ownership is allowed. You need at least one administrator; if the administrator works in Andorra, they need an appropriate residency/work status, which is exactly what the active residency route provides.
Is an Andorran company good for holding investments?
It can be: 10% corporate tax, no withholding on dividends to resident individuals, 0% wealth and inheritance tax, and capital gains that can reach 0% on long-held assets (details here). But holding structures need particular care on substance and treaty access — take advice before committing.
Can forming a company get my family to Andorra?
Indirectly, yes: an active residency permit holder can bring dependants (each dependant requires a EUR 12,000 non-refundable contribution under the current rules). See the active residency guide for the family provisions.
Ready to Run the Numbers?
An Andorran SL paying 10% corporate tax — with exempt dividends and a 0–10% personal cap — often cuts an entrepreneur’s total tax bill by more than half versus Spain, France or the UK. Use our Tax Savings Calculator to estimate your savings, then book a free consultation with Axior Global to map the incorporation and residency path for your specific case.
Sources
- Portal Jurídic del Principat d’Andorra (primary source of Andorran law): https://www.portaljuridic.ad
- Butlletí Oficial del Principat d’Andorra (BOPA): https://www.bopa.ad
- Llei 20/2007, de 18 d’octubre, de societats anònimes i de responsabilitat limitada (company forms and minimum capital)
- Llei 95/2010, de l’impost sobre societats (10% corporate tax)
- Llei 11/2012, de l’impost general indirecte (IGI 4.5%)
- Llei 5/2014, de l’impost sobre la renda de les persones físiques (IRPF 0–10%)
- Law 2/2026 (Omnibus 2) — residency investment thresholds and AFA state contribution (published in BOPA, 12 February 2026)
- Govern d’Andorra — foreign investment and double-taxation-treaty information: https://www.govern.ad
Related Axior guides: Active & Self-Employed Residency · Corporate Tax 10% · Dormant & Holding Company Compliance · Andorra Law & Tax Changes in 2026 (pillar hub).
This article is for general information only and does not constitute tax or legal advice. Figures reflect Andorran law as of August 2026. Confirm details for your circumstances before acting.