The safest offshore jurisdiction in Europe
Andorra's status as a low tax and duty-free zone has led to the development of a major trade in consumer goods. This trade, along with tourism and, more recently, financial services, are now the major components of the Andorran economy. The country has now begun a period of ‘normalising’ its fiscal environment.
Andorra is located in the high mountains of the Pyrenees between France & Spain.
Societat de Responsabilitat Limitada: It is a Limited Liability Company, usually used for trading locally. It requires a minimum paid up share capital of € 3,000 and can be incorporated by one or more partners. It is a common form of incorporation.
Societat Anonima is a joint stock company with limited liability. Minimum paid up share capital is € 60,000.
The Corporations Act 1983 governs corporations formed in Andorra. There are three types of company, the Societat de Responsabilitat Limitada and the Societat per Accions both having shareholders with limited liability, and the Societat Colectiva, whose partners have unlimited liability.
Shareholders are liable for company debts only up to the limit of their contributions or holdings in the company. Their personal assets are not liable on the condition that the company is entered in the Company Register.
Any company in Andorra must have a registered office in Andorra. While registering the company, it has to apply for authorisation of its activities in the commune where the registered office is located.
Incorporation of a company may take up to 3 months.
From Jan 1st 2015,
The Foreign Direct Investment Law of July 2012 states that, any foreigner, whether resident or not, may now be the titular of any trading enterprise in Andorra and may own 100% of any company.
The owner may or may not be a foreign physical person or a foreign company, and is not a resident, that investment is considered as foreign investment with a few regulations and declaration obligations.
The new Personal Income Tax system in Andorra (IRPF) was passed on 24th April 2014, effective from January 2015 onwards. It states that,
All fiscal residents need to register for a Tax number (NRT) and need to file a tax return between 1st April and 30th September annually for earnings of the previous year.
Special concession for passive residents is the option to pay annually 30,000 euros for a period of 3 years in lieu of filing a tax return. Post 3 years, they will then resume normal tax returns and will be liable for tax as prescribed by the law.
Work permits are difficult to get. They are usually only issued to EU nationals, only if there is no Andorran who is qualified for the job. Individuals working for an Andorran person or company are given work permits. It is not issued to self-employed foreigners.
New categories of residency have been introduced recently.
Active Residency is stringent and there are more requirements before getting a permit. An interview needs to be attended in the nations official language, Catalan. There are translators available to help you with translation into English.
Passive Residency is for those who do not seek employment for monetary purposes and are financially able. To those who need employment to sustain a livelihood in Andorra, need to apply for an Active Residency.
Renewal for passive residency occurs in three phases.