How to Register a Company in Andorra

Creating a business in Andorra is a great option for entrepreneurs looking for a favorable tax environment, political stability, and a strategic location in the heart of Europe. The process of setting up a company in Andorra is relatively straightforward, but it requires a clear understanding of the local regulations and procedures.

Steps to Register a Company in Andorra:

1. Choose the Type of Company: In Andorra, the most common types of companies are the Sociedad Limitada (SL) – similar to a limited liability company – and the Sociedad Anónima (SA), more akin to a corporation. Most foreign entrepreneurs opt for the SL due to its simpler structure and lower capital requirements.
2. Register the Company Name: First, you need to select and reserve a company name. The name must be unique and meet Andorran business naming regulations.
3. Draft the Company’s Articles of Association: The Articles of Association outline the company’s structure, operational rules, and the rights and responsibilities of shareholders.
4. Register with the Andorran Trade Register: Once the company documents are in order, they must be registered with the Registre de Comerç d’Andorra (Andorra’s Commercial Registry).
5. Obtain a Tax Identification Number (NRT): Your business will need a tax identification number, which is essential for tax and administrative purposes.
6. Open a Corporate Bank Account: To comply with capital deposit requirements, you will need to open a corporate bank account in Andorra and deposit the minimum required capital.
7. Set Up the Company’s Office: Your business must have a physical address in Andorra, whether it’s an office, coworking space, or virtual office.
8. Register for Social Security: All employees, including company directors, need to be registered with the Andorran social security system for healthcare and pension purposes.
9. Comply with Business Licenses: Depending on your business type, you may need to apply for additional licenses or permits to operate legally in Andorra.

Requirements to Register a Company in Andorra

To establish a company in Andorra, you need to meet the following requirements:

1. Residency Requirement: At least one of the company’s directors must be a resident of Andorra. Foreigners are allowed to apply for Andorran residency as part of the company setup process.
2. Minimum Capital:
   • For a Sociedad Limitada (SL), the minimum capital required is €3,000, which must be fully paid up.
   • For a Sociedad Anónima (SA), the minimum capital is higher, typically around €60,000.
3. Office Address: Your business must have a registered office in Andorra.
4. Business Plan: The Andorran authorities may ask for a detailed business plan, especially for certain business sectors like finance, insurance, or consulting.
5. Financial Guarantees: In some cases, you may need to demonstrate your financial capacity to fund and sustain the business.
6. Clean Criminal Record: You must present a clean criminal record both in Andorra and your home country.

Can I Have a Company in Andorra and Live in Spain?

Yes, it is possible to own a business in Andorra while living in Spain. Many entrepreneurs choose this arrangement due to the favorable tax conditions in Andorra, including its low corporate tax rates and tax incentives for businesses. However, there are several important considerations:

1. Tax Residency: If you live in Spain for more than 183 days a year, you will likely be considered a tax resident in Spain. This means you will have to pay personal income tax in Spain, even if your company is registered in Andorra. It’s essential to be aware of Spain’s tax laws regarding foreign income and assets.
2. Establishing a Legal Entity: Your company in Andorra will need to comply with Andorran laws, and you must ensure you meet all requirements to manage the business effectively from abroad.
3. Cross-Border Business Operations: Depending on the nature of your business, you may need to comply with both Spanish and Andorran regulations for business activities, which could include VAT, invoicing, and reporting obligations.
4. Residency Permits and Visa: As a non-resident entrepreneur, you may be required to obtain a visa or residency status in Andorra to legally manage your business. You will also need to navigate the residency requirements in Spain if you are staying there long-term.

While it is entirely possible to manage a business in Andorra and live in Spain, it is crucial to consult with tax professionals in both countries to ensure full compliance with all applicable laws.

Can I Have a Company in Andorra and Live in the UK?

Yes, it is also possible to own and run a business in Andorra while residing in the UK. Many UK nationals establish companies in Andorra to take advantage of the country’s favorable tax regime, which includes lower corporate taxes and attractive business incentives. However, there are a few important factors to consider:

1. Tax Residency: If you live in the UK for more than 183 days a year, you will generally be considered a tax resident of the UK. This means that your worldwide income, including any income from your Andorran company, will be subject to UK income tax. However, the UK and Andorra have a double tax treaty that can help you avoid being taxed twice on the same income. It’s essential to seek professional advice to understand the tax implications and how to optimize your situation.
2. UK Corporation Tax: If you are actively managing your business from the UK, the HMRC might consider your Andorran company to be a “controlled foreign company” (CFC), which may lead to additional UK tax obligations. However, if your company is primarily run from Andorra, and you are not generating significant UK-based income, this may not apply.
3. Operating the Business: While your company can be registered in Andorra, you’ll need to ensure that it complies with Andorran laws, and you may need to appoint a local representative or director who resides in Andorra if required. It’s also important to be aware of any business activities you might carry out in the UK that could trigger additional registration, tax, or reporting requirements.
4. Residency and Visa Requirements: As a UK resident, you won’t require a special visa to live in the UK. However, you may need to consider the residency or visa requirements in Andorra for managing the business, especially if you plan to visit regularly or maintain any physical presence in the country.

In summary, owning a company in Andorra while living in the UK is entirely feasible, but careful planning and consultation with both UK and Andorran tax advisors are crucial to ensure compliance with both countries’ tax laws and regulations.

How Axior Global Can Help

Axior Global offers expert advice on managing cross-border tax implications. We will help you navigate the tax residency rules, ensuring you benefit from the Andorra tax regime.