It has been almost five years since Andorra opened up for foreign investment in Andorran companies with up to 100% of ownership held by non-resident investors. A company formation in Andorra is now more attractive than ever. Habitand explains you the key advantages of forming a company in Andorra and how this may help with your decision to invest into real estate or become a resident in Andorra.

The 5 key advantages to form a company in Andorra:

Taxation on business entities in Andorra

Andorra has one of the most competitive tax systems in the Western hemisphere. Corporate taxes range from 2 to 10% and companies in Andorra are subject to very little maintenance of government fees apart from taxes.

100% ownership of the company may be foreign

Restrictions to foreign direct investment in Andorra have been lifted and any foreigner or non-resident may own up to 100% of the company in Andorra. Further to this you may be a member of the board being a non-resident. This has facilitated and made a company formation in Andorra by foreigners much more attractive since 2012.

Maintenance costs for an Andorran company

Andorra requires all companies to maintain a proper accounting and present tax declarations as well as annual accounts to the local authorities. The cost for a local accountant and legal advice is substantially cheaper when comparing to other low-tax jurisdictions. Further to this the annual costs such as the company registration in the Trade Register or the local municipal fees normally do not exceed 600 EUR per year. This depends of course on your size of operation in the country such as office space in sqm and company type.

Cost of office space

If you are looking to form your company in Andorra and then rent office space or even an apartment as business address for your company you will be surprised by the affordable rental prices in the Principality. Business centers in Andorra as well as commercial real estate are available at very reasonable leasing prices.

Social security charges for companies

If you are considering to hire employees for your newly formed company in Andorra note that social security charges and contributions are 15.5% of the salary of the employee to be paid by the company. This is very competitive when comparing to the neighboring EU countries where charges typically are over 30% for the company.

To summarize Andorra has a favorable setting for investors and entrepreneurs and makes it easier than ever before to form a company there. Habitand may help you with our competent partners for legal, tax and company formation assistance in Andorra. Consult our partner section here.