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Registering a company in Andorra takes about 2 to 4 months and gives a flat 10% corporate tax, 4.5% IGI, and 100% foreign ownership. The most common structure is the Societat Limitada, needing EUR 3,000 in capital, and non-residents must first obtain foreign investment authorization.

Why Register a Company in Andorra?

Andorra draws entrepreneurs for a simple reason: a flat 10% corporate tax, among the lowest in Europe, paired with political stability and a location between France and Spain. Formation is straightforward, and a new business can usually be operational within two to four months.

The appeal goes beyond the headline rate. IGI, the local VAT equivalent, is just 4.5%, dividends from Andorran companies reach resident shareholders tax-free, and foreigners can now own 100% of a company. The trade-off is a real compliance process built around transparency and source-of-funds checks, which is what this guide walks through. For the wider tax picture, our Andorra taxes guide covers personal and property taxes in full.

What Company Types Can You Register?

Andorra offers several structures, and the right one depends on your size, liability tolerance, and capital. The Societat Limitada suits most small and medium businesses; the Societat Anonima fits larger ventures with multiple investors. The table compares the main options.

Three factors usually decide the choice. Ownership and size point solo founders to the SLU and larger investor groups to the SA. Liability matters most: the SL, SLU, and SA cap your exposure at the amount invested, while sole proprietorships and general partnerships expose personal assets. Capital sets the floor, from EUR 3,000 for an SL to EUR 60,000 for an SA, which also shapes whether the structure supports a later residency by investment plan.

Who Can Register a Company in Andorra?

Both residents and non-residents can register a company, and since the Foreign Investment Law (Law 10/2012) non-residents can own up to 100% of the capital in most sectors. The old 49% cap on foreign ownership is gone.

There are two conditions worth knowing up front. A non-resident holding more than 10% of the company must obtain foreign investment authorization before incorporating. And the company must have a genuine local presence: at least one administrator or employee has to be resident in Andorra. Owning the company does not, on its own, make you an Andorran resident; that is a separate track covered later.

What Does It Cost and What Taxes Apply?

Setup costs typically run about EUR 6,000 to EUR 11,000 excluding the share capital, covering notary fees, registration, the foreign investment authorization, and professional help. Once trading, the company enters Andorra's low-tax system, summarized below.

The single most important recent change is the 3% minimum effective corporate tax introduced by Law 5/2023, in force since January 1, 2024. Before it, deductions could reduce a profitable company's bill close to zero; now 3% is the floor. New companies may still access a 2% rate in their first tax period if they meet the conditions. This article covers company taxes only; for personal income tax, property taxes, and capital gains, see the dedicated Andorra taxes guide.

What Are the Formation Requirements?

Andorra's process is built around transparency and anti-money-laundering standards, so the documentation is thorough. The main applicant assembles an identity and due-diligence file before incorporation can proceed.

• Administrative Identification Number (NIA) for the main applicant, one of the first steps.
• Apostilled criminal-record certificate, no older than three months.
• Legalized copy of the applicant's passport.
• CV and a detailed business plan setting out the company's purpose and strategy.
• Evidence of tax compliance, such as recent home-country tax returns.
• Documentation of the lawful source of the funds behind the business.

All foreign documents must be legalized or apostilled and translated into Catalan, Andorra's official language. Because banks apply detailed source-of-funds checks, preparing this file well is what keeps the timeline on track.

How Do You Register a Company Step by Step?

Incorporation follows a structured sequence that usually takes two to four months. The foreign investment authorization and the corporate bank account are the two steps most likely to set the pace.

Step 1. Reserve the Company Name

Submit up to three name options to the Government of Andorra, specifying the business activity and legal form (SL, SA, and so on). Name reservation typically takes about 10 days.

Step 2. Obtain Foreign Investment Authorization

Non-residents owning more than 10% apply for authorization, submitting the name certificate, apostilled identity and criminal-record documents, proof of professional experience, and a business plan. Approval generally takes up to about six weeks.

Step 3. Notarize and Register the Company

Draft the articles of association and formalize them before an Andorran notary, then register the company with the commercial register to establish it legally.

Step 4. Register for a Tax Number (NRT)

Obtain the Tax Registration Number (NRT) from the Andorran Tax Administration so the company can transact and file.

Step 5. Open a Corporate Bank Account

Open an Andorran bank account to deposit the share capital. This involves detailed compliance and source-of-funds review and is often the most time-consuming step. Our Andorra banks guide explains what the banks expect.

Step 6. Obtain the Commercial License and Register for Social Security

Request the commercial operating license from the local Comu, complete the trade-register requirements, then register the company and its employees with the Andorran Social Security Fund (CASS). The business can then begin operating.

Can Company Formation Lead to Residency?

Yes, through active residency, but it is a separate process from registering the company. To use the company as a residency route, you generally need to be a majority shareholder, hold a management role, and place the required bank deposit.

Active residents must spend at least 183 days a year in Andorra, which is the defining commitment of this route. It differs from passive residency by investment, which needs a much larger capital placement but only 90 days a year and no active business. Our Andorra residency guide compares the routes so you can see which fits before you build the company around it.

What Are the Common Mistakes to Avoid?

Most delays trace back to a few avoidable errors, usually around the authorization step, banking, or confusing the company with residency.

• Assuming registration grants residency. It does not; active residency is a separate application with a 183-day rule.
• Skipping the foreign investment authorization. Non-residents over 10% must obtain it before incorporating.
• Underestimating the bank account step, which carries the heaviest source-of-funds review.
• Using outdated tax figures. The 3% minimum effective corporate tax has applied since 2024.
• Forgetting the local-presence rule: at least one administrator or employee must reside in Andorra.
• Leaving documents untranslated. Everything must be apostilled and rendered into Catalan.

Sergey Voinich, Founder and Managing Partner at Â鶹ԭ´´, notes: "The clients who move fastest treat the bank account and the source-of-funds file as the real project, not an afterthought. The company structure is usually the easy part. Where files stall is proving where the money came from and getting the foreign investment authorization lined up before the notary stage."

Frequently Asked Questions

Who Can Open a Company in Andorra?

Both residents and non-residents can. The Foreign Investment Law (Law 10/2012) lets non-residents own up to 100% of an Andorran company, removing the old 49% cap. Non-residents holding more than 10% must first obtain foreign investment authorization, and at least one administrator or employee must be resident in Andorra.

How Much Does It Cost to Register a Company in Andorra?

Setup costs typically run about EUR 6,000 to EUR 11,000, excluding the share capital. That covers notary fees, registration, the foreign investment authorization, and professional assistance. The minimum capital is separate: EUR 3,000 for an SL or SLU, or EUR 60,000 for an SA.

How Long Does It Take to Set Up a Company in Andorra?

About 2 to 4 months for a complete file. The main variables are the foreign investment authorization for non-residents, which can take around six weeks, name reservation of roughly 10 days, notarization and registration, and opening a corporate bank account, which is often the slowest step.

How Much Is Company Tax in Andorra?

The corporate income tax rate is a flat 10%, with a 3% minimum effective rate on profitable companies since Law 5/2023 took effect in 2024. That is well below the European average. New companies may qualify for a reduced 2% rate in their first tax period if they meet the conditions.

Can Foreigners Own 100% of an Andorran Company?

Yes. Since the Foreign Investment Law (Law 10/2012), non-residents can own up to 100% of an Andorran company in most sectors, replacing the earlier 49% ceiling. Owners holding more than 10% must obtain foreign investment authorization first. A few strategic sectors may still carry restrictions, so confirm yours before applying.

Can I Become a Resident by Forming a Company?

Yes, through active residency, which is separate from registering the company. You generally need a majority stake, a management role, and the required bank deposit. Active residents must spend at least 183 days a year in Andorra. Passive residency by investment is the alternative for those who do not want to run a business.

How Â鶹ԭ´´ Helps

Â鶹ԭ´´ advisors guide entrepreneurs through the full Andorran setup: choosing between an SL and an SA, preparing the source-of-funds file to the standard the banks expect, securing the foreign investment authorization, and coordinating the notary, registration, and CASS steps. Where the company is meant to support relocation, we connect it to the right residency route, whether active residency through the business or passive residency, so the structure and the move are planned together on current facts.