Incorporation of companies in Andorra

How to incorporate a company in Andorra

Addwill provides consultancy and management services for the creation of companies in Andorra, helping you to select the type of company or business that best suits your needs.

In addition, we take care of all the necessary formalities with the competent authorities to speed up the process of opening your business or company, with the aim of minimizing your relocation expenses.

Reasons for setting up a company in Andorra

High standard of living:

Setting up a company in Andorra is an appealing option thanks to the country’s high standard of living. Andorra boasts one of the highest per capita incomes globally, with a GDP per capita of 39,068 euros in the year 2022.

Furthermore, the country ranks highly in GDP per capita in Purchasing Power Parity in comparison to other countries, with figures similar to those of Germany, Sweden and Denmark. This list was topped by Monaco with $234,315. Qatar had a GDP per capita in Purchasing Power Parity of $66,838, France $43,659 and Spain $30,106.

Tax advantages:

Andorra offers an attractive tax system for foreign investors, with significantly lower taxes than in most European countries.

For example, corporate income tax is only 10%. Personal income tax is also relatively low, with a tax rate of 10%, with exemptions for the first 24,000 euros of earned income and for all dividends earned from Andorran companies.

The General Indirect Tax (IGI) in Andorra is the equivalent to VAT in other countries, but is much lower. The general rate is 4.5%, while the super-reduced rate is 0% for basic products and services such as health, education and housing rental. In addition, there is a reduced rate of 1% for products such as food, water and books, a special rate of 2.5% for transport services, theatre, cinema and museums, and an increased rate of 9.5% for banking and financial services.

It is also worth noting that Andorra has no wealth tax or inheritance and gift tax.

Reduced labour costs

One of the advantages of incorporating a company in Andorra is the reduced labour costs this entails for the business owner. This is due to the low Social Security contributions that companies have to make in comparison with other countries.
In Andorra, the Social Security contribution rate for companies is 15.5%, while in countries such as Spain and France it is over 30%, making the hiring of personnel in Andorra more accessible and reducing the company’s fixed costs.

Additional benefits

One of the many advantages of establishing a company in Andorra is the quality of life, which is among the highest in the world. Public safety is high, with one of the lowest crime rates. Andorra also enjoys a privileged location, less than three hours from major cities such as Barcelona and Toulouse.

In terms of the country’s economic situation, the deficit and debt as a percentage of GDP are within the more moderate range among OECD countries. The Andorran banking system is also highly solvent. In terms of social services, Andorra has a first-rate health system and three free education systems in three languages, which promotes integration and cultural diversity.