Opportunities for Starting a Business in Andorra

Starting a business in Andorra offers significant advantages for foreign investors due to its low taxation and proximity to key markets such as Spain and France. The country provides an attractive environment with various options for setting up a company, provided that legal and residency requirements are met.

In Andorra, different types of companies can be incorporated, with the most common being the Limited Liability Company (SL), requiring a minimum capital of €3,000, and the Public Limited Company (SA), which requires €60,000 in capital. To obtain company approval, a prior foreign investment authorisation must be requested, especially if foreign capital participation exceeds 10%. Once approved, entrepreneurs must complete further steps such as opening an Andorran bank account and registering with the commercial registry—a process that typically takes between three and four months.

Andorra has some of the lowest corporate taxes in Europe: the corporate income tax is set at 10%, and VAT (known locally as IGI) is fixed at 4.5%. For investors seeking to establish residency and operate from Andorra, this tax structure offers a major advantage compared to countries like Spain or France, where income and corporate taxes are significantly higher. It also provides labour cost benefits, with lower social security contributions and associated expenses, potentially reducing overall operating costs by up to 30%.

To establish a company in Andorra, a physical office in the country is also required. In the case of a company managed by a Spanish or French resident, it is mandatory to hire at least one employee who is a resident of Andorra. This supports local job creation and can facilitate the approval of investment and residency permits.

In addition to its favourable business environment, Andorra offers other advantages such as its strategic location, high-quality infrastructure, and double taxation agreements with seven countries, which ease international operations for companies working across multiple markets.

With these conditions, Andorra stands out as an attractive destination for entrepreneurs seeking a business-friendly regulatory environment, reasonable labour costs, and competitive tax benefits, all within a country known for its high quality of life and safety.