Understanding how to open a company in Andorra as a foreigner involves more than registering a business. You must normally obtain approval for foreign investment, choose a legal structure, prove the company has a genuine activity and complete tax, banking and social-security formalities. The process is managed through the Govern d’Andorra and other local institutions, so professional advice is strongly recommended.
Can a foreigner own a company in Andorra?
Yes. Foreign nationals can establish and own an Andorran company, subject to the rules on foreign investment and the activity they intend to carry out. In many sectors, 100% foreign ownership is possible, but the application must still be approved. Some regulated or strategic activities may have additional conditions, licensing requirements or restrictions.
Opening a company does not automatically grant the right to live in Andorra. A business owner who wants to relocate must apply separately for active residency, generally linked to working for and managing the Andorran company. Passive residency is a different route, usually intended for people who invest or live in Andorra without carrying out an active professional activity there.
Choose the right company structure
The most common structure for a small or medium-sized business is an SL (societat limitada), broadly comparable to a limited company. An SL normally requires share capital of at least 3,000 euros. A larger SA (societat anònima) is generally used for businesses requiring more capital or a wider shareholder structure, with a substantially higher minimum capital requirement.
Your choice affects administration, investment, liability and accounting. Before reserving a name, discuss the intended activity, shareholders, directors, capital and expected turnover with an Andorran gestor, lawyer or accountant. Confirm the current capital and documentation requirements with the Govern d’Andorra because procedures and forms can change.
Steps to open a company in Andorra as a foreigner
- Define the activity and parish. Decide what the company will do, where it will operate and whether it needs a professional, commercial, tourism, health or other specific authorisation. You will normally deal with the relevant comú for the parish where the premises or activity is located, such as Andorra la Vella, Escaldes-Engordany, Encamp, La Massana, Ordino, Canillo or Sant Julià de Lòria.
- Reserve the company name. Request a suitable denomination through the official company-creation process and check that it is available and acceptable.
- Apply for foreign investment authorisation. Foreign shareholders normally submit identity documents, information about the investment, the company’s purpose, funding and sometimes evidence of source of funds. Non-residents may need officially legalised and translated documents.
- Open a bank account and deposit capital. Once the bank completes its compliance checks, deposit the required share capital and obtain the relevant banking certificate. Banks commonly ask for detailed information about your wealth, income, business plan and expected transactions.
- Prepare and sign the articles of association. A notary formalises the incorporation. The deed sets out the company name, registered office, capital, shareholders, directors and corporate purpose.
- Register the company and activity. The company is entered in the Andorran Mercantile Register. You may also need to register the commercial or professional activity, obtain an opening or operating authorisation from the comú and arrange a suitable premises.
- Complete tax and social-security registrations. Register with the relevant tax services, obtain the company’s tax identification details and register employees or working directors with CASS, Andorra’s social-security system.
Taxes and ongoing obligations
Andorran companies are generally subject to corporate income tax, with a standard rate of up to 10%, although special rules, deductions and incentives can apply. The general indirect tax, IGI, is 4.5%, but registration and filing obligations depend on the activity and turnover. Your accountant should confirm whether you must charge IGI, file periodic returns and submit annual accounts.
A company must keep proper accounts, file the required tax declarations and maintain evidence for invoices and business expenses. If you hire staff, budget for employment contracts, payroll, CASS contributions and workplace obligations. A company director who works in the business may also have a CASS position even when there are no employees.
Practical advice before relocating
Prepare a realistic business plan covering clients, suppliers, premises, staffing, banking and expected revenue. Andorra Telecom can help with telecommunications for an office, while FEDA is the relevant electricity provider when arranging utilities. Check contracts, insurance and data-protection responsibilities before trading.
Keep personal relocation and company formation as two connected but separate projects. Confirm the active-residency requirements before signing a long lease or moving your family, and verify current rules directly with the Govern d’Andorra. Once the legal and tax structure is clear, browse local businesses in our directory to find accountants, lawyers, banks, property professionals and other services in Andorra.
