Company Formation in Andorra

You set up a company in Andorra by reserving a name, obtaining foreign investment authorisation if you are not resident, opening a local bank account, signing the deed before an Andorran notary and registering with the Companies Registry. It suits founders who will move to Andorra and run the business from there, not remote owners.

Key points

• The usual vehicle is a limited company (SL or single-member SLU) with €3,000 minimum capital; a public company (SA) needs €60,000.

• Non-residents taking more than 10% of an Andorran company need foreign investment authorisation before the notarial deed. The government fee is €300.

• Corporate tax is 10%, and since Law 5/2023 a profitable company cannot pay less than 3% of its profits after reliefs. Dividends paid to non-residents are not taxed in Andorra.

• Andorra has no tax treaty with India, but its treaty with the UK has been in force since 22 December 2025.

• Law 2/2026 made the €50,000 contribution for self-employed and passive residence non-refundable and raised passive residence investment to €1 million.

Why do founders set up a company in Andorra?

Founders set up in Andorra mainly because they want to live there: a safe Pyrenean country a few hours from Barcelona and Toulouse, with personal income tax capped at 10% and no wealth or inheritance tax.

The typical client is an entrepreneur, consultant or online business owner relocating within Europe. Andorra uses the euro, sits outside the EU and has built a modern tax system since 2012, including corporate tax and an indirect tax (IGI, standard rate 4.5%).

Andorra appears in our guide to 24 jurisdictions in Go Global with Greenwolf as a residence-led jurisdiction. That is the key word: the structure works because the owner lives and works there.

Who Andorra is not for: founders staying in India or the UK who want an Andorran company to invoice through, businesses needing EU market rights such as passporting, and groups that rely on a wide treaty network.

What types of company can you register in Andorra?

Most founders use a Societat Limitada (SL), or a single-member SLU, with a minimum share capital of €3,000. A Societat Anònima (SA) needs €60,000 and is used for larger businesses or where shares must change hands easily.

An SL needs a leased local office and an administrator able to act locally. Holding companies benefit from the participation exemption below; for when that separation helps, see our guide to holding vs operating companies.

How is an Andorran company taxed in 2026?

An Andorran company pays corporate tax (Impost sobre Societats) at 10% on its worldwide profits, as set out on the government's corporate tax procedure page. Collective investment undertakings are taxed at 0%.

The main features for 2026:

• 3% minimum effective rate. Since the reform in Law 5/2023, a company with positive results cannot reduce its tax below 3% of profits through deductions such as job creation or investment credits.

• Participation exemption. Dividends and gains from subsidiaries are generally exempt where the company holds at least 5% for at least one year and the subsidiary is subject to a comparable tax.

• Withholding on payments abroad. Dividends paid to non-residents are not taxed in Andorra. Royalties paid to non-residents are generally taxed at 5%, and other Andorran-source income of non-residents at 10%, subject to treaty relief.

• Old special regimes have gone. Andorra abolished its former preferential regimes for international trading, holding and IP income after joining the OECD standards, so the 10% rate applies across the board.

• Instalment and filing. Companies pay an instalment of 50% of the previous year's liability and file the annual return in the month after the six months following the year end, through the government's online portal.

Treaties. Andorra has around two dozen double tax treaties in force, including Spain, France, Portugal, Luxembourg, Malta, Cyprus, the UAE and the UK. The UK treaty was signed on 20 February 2025 and entered into force on 22 December 2025, applying in the UK from 1 April 2026 for corporation tax and 6 April 2026 for income and capital gains tax, according to KPMG.

Modern treaties include a principal purpose test, which we explain in our page on the principal purpose test.

India. There is no double tax avoidance agreement between India and Andorra, and we could not confirm a bilateral tax information exchange agreement. Both countries exchange financial account information under the OECD Common Reporting Standard.

Global minimum tax. We have not found Andorran legislation implementing the 15% GloBE rules as of October 2026. Groups with revenue of €750 million or more may still face top-up tax elsewhere, as explained in our page on GloBE (Pillar Two) minimum tax.

How do you register a company in Andorra step by step?

The process runs through the government's online portal and the Companies Registry (Registre de Societats Mercantils). For a non-resident founder it usually takes nine to fourteen weeks.

1. Administrative identification number (NIA). Each foreign founder obtains an identification number to deal with the administration.

2. Name reservation. Reserve the company name with the Companies Registry (a fee of about €6).

3. Foreign investment authorisation. Non-residents acquiring more than 10% of an Andorran company apply to the government before signing the deed, through the foreign direct investment application. The fee is €300 and the legal maximum resolution period is two months, extendable by one. In practice decisions often come within a few weeks.

4. Bank account and capital. Open an account with an Andorran bank and deposit the share capital. The bank's certificate is needed for the deed.

5. Notarial deed. Sign the articles before an Andorran notary, in person or by power of attorney.

6. Registration. File the deed with the Companies Registry. The registration fee for an SL or SLU is €1,016.67.

7. Tax and trade registrations. Obtain the tax registration number (NRT), register the activity in the Commerce Register and with the parish (comú), and register with the social security fund (CASS) before hiring.

The bank and the foreign investment file drive the timeline; the founder's residence application runs in parallel.

How much does it cost to set up and run a company in Andorra?

Government fees are low and published; professional and premises costs are larger. Professional and running cost ranges below are indicative only.

A small owner-managed SL typically costs €10,000 to €30,000 a year to run before salaries and the founder's own social security. That is well below Monaco.

What do Andorran banks ask for?

Andorra has a small banking sector, a handful of banking groups, so each bank's appetite matters. Banks expect a resident or soon-to-be-resident owner, a clear business plan and full source-of-funds evidence.

Typical requests include passports, CVs, the foreign investment authorisation, a business plan with projected flows and evidence of the founder's residence application. Non-residents with no plan to move often cannot open an account at all, which blocks incorporation because the capital certificate comes before the deed.

Banks also scrutinise complex ownership chains, as we explain in why banks challenge group structures before tax authorities do.

What substance does an Andorran company need?

An Andorran company is tax resident in Andorra if it is incorporated there, has its registered office there or is effectively managed there. Andorran law looks for a real office and local management; home-country law looks at where decisions are actually taken.

If an Indian founder runs an Andorran SL from Bengaluru, India can treat the company as Indian resident under its place of effective management rules. A UK parent faces the UK CFC rules on offshore income, and the UK treaty's principal purpose test can deny benefits to arrangements with no commercial rationale. The general standard is set out in our page on economic substance after 2022.

How do you get Andorran residency through your company?

Andorra links residence and work closely. A founder running their own company usually applies for active residence as a self-employed person (compte propi); someone living off investments applies for passive residence.

Active (self-employed) residence:

• Hold more than 34% of the Andorran company and act as an administrator.

• Live in Andorra at least 183 days a year and register with CASS as self-employed.

• Pay the €50,000 contribution to the Andorran Financial Authority (AFA), which Law 2/2026 of 22 January 2026 turned from a refundable deposit into a non-refundable contribution, with exceptions for government-validated business projects and certain digital or innovation activities, as Advantia summarises.

Passive residence:

• Invest at least €1,000,000 in Andorran assets (up from €600,000 under Law 2/2026), €800,000 in property, or €400,000 into the national Housing Fund.

• Pay the €50,000 non-refundable AFA contribution, plus €12,000 per dependant.

• Spend at least 90 days a year in Andorra.

Active residents pay personal income tax at 0% on the first €24,000, 5% to €40,000 and 10% above that. Capital gains are within personal income tax, with exemptions for some smaller or long-held stakes, so Andorra is low-tax rather than tax-free.

Becoming Andorran resident is only half the job. You must also stop being resident at home, which is often where plans fail; our page on how founder behaviour quietly shifts tax residency explains the common traps.

How does an Indian resident set up or fund an Andorran company?

An Indian company invests under the overseas direct investment route through its authorised dealer bank; an Indian resident individual can invest in an operating Andorran company within the Liberalised Remittance Scheme limit of US$250,000 a year. Our guide to funding an overseas company through ODI or LRS explains the reporting and the limits on step-down subsidiaries.

With no India–Andorra DTAA, dividends from an Andorran company are taxed in India at the shareholder's normal rate under the Income-tax Act 2025, which has applied since 1 April 2026. Andorra does not tax dividends paid to non-residents, so there is little foreign tax to credit. Andorran holdings and bank accounts must be reported in the foreign assets schedule of the Indian return.

The more common case is an Indian founder who emigrates to Andorra: until they become non-resident in India, their income stays within Indian tax.

For UK owners: the UK–Andorra treaty now gives a residence tie-breaker for individuals. A UK parent must still test an Andorran subsidiary under the CFC rules, and a departing founder must pass the statutory residence test and watch the temporary non-residence rules.

What are the ongoing compliance requirements?

An Andorran company must keep accounts under Andorran accounting rules and file returns on time. The main obligations are:

• Annual accounts approved by the shareholders and filed with the Companies Registry; an audit is required above size thresholds.

• Corporate tax return and instalment, filed online.

• IGI (indirect tax) returns, monthly, quarterly or half-yearly depending on turnover.

• Beneficial ownership information kept up to date for the registry and banks.

• Commerce and parish fees paid annually for each registered activity.

• CASS and payroll filings for employees and the self-employed founder.

• Transfer pricing documentation for transactions with related parties at market value.

Andorra vs Monaco vs Cyprus: which fits?

Monaco is a wealth location, Cyprus an EU holding base with a broad treaty network, and Andorra a low-tax place to live and run a business.

For the wealth-led alternative, see our guide to company formation in Monaco. For an EU holding base, see the guide to company formation in Cyprus.

The Greenwolf view

Andorra is a good answer to a personal question: "where do I want to live and work?" It is a poor answer to a corporate one: "where should my profits be booked?" The 10% rate only holds when the founder lives there, runs the company there and has cut residence ties at home.

When those conditions are met, Andorra can be very efficient: a 10% company, a personal tax cap of 10%, no tax on dividends paid abroad and, since the UK treaty took effect, a cleaner route for UK founders. Law 2/2026 has made the move more expensive, so the residence decision should be modelled in full before anyone commits the €50,000.

We plan residence, the home-country exit, the bank and the company as one sequence, because the bank and the permit set the timetable.

Setting up in Andorra with Greenwolf

If you are planning to move to Andorra and run your business from there, Greenwolf Advisors can sequence the residence application, the exit from India or the UK, the bank account and the company formation. Speak with a Greenwolf strategist before you commit the AFA contribution.

This article is general information, not advice for a specific case.