Andorra company for non-residents: the permit comes first, the 10% needs you there

Andorra sells itself as the low-tax country you can drive to from Barcelona, and the 10% corporate rate is real. What the pitch skips is the order of events. A non-resident cannot simply incorporate: the government must first approve you as a foreign investor. And the rate only holds if your home country and your bank accept that the company is run from Andorra, which for an owner-manager usually means living there.

Here is the short version. The vehicle is the Societat Limitada (SL), with EUR 3,000 of capital paid in full before incorporation. A non-resident taking more than 10% needs prior foreign-investment authorisation; the ministry has two months to decide, extendable by half, and silence counts as refusal. State fees are EUR 5.69 for the name, EUR 300 for the authorisation and EUR 1,016.67 for registration, then EUR 851 a year for a holding company or one without an open business. Corporate tax is 10%, with an effective minimum of 3%. Advisers quote six to ten weeks end to end.

How to register a company in Andorra

1. Get an identification number (NIA) for each individual, against a certified passport copy.
2. Reserve the name with three proposals and a description of the business activities. The fee is EUR 5.69.
3. Apply for foreign-investment authorisation in person or through the government's electronic portal, one form per future shareholder or director, with a recent criminal record certificate, CV and business plan. The fee is EUR 300.
4. Open a bank account in formation at one of the country's three banks, deposit the capital and get the certificate the notary requires.
5. Sign the deed, in person or by power of attorney, before one of Andorra's five notaries, with apostilled and translated documents and fees paid in advance. The bylaws must name a registered office in one of the seven parishes.
6. File the beneficial-ownership form, register with the tax department and, if trading, obtain the commerce licence through the parish comú, usually two to three weeks more.

Why the investment permit sets the pace

Under Law 10/2012 on foreign investment, a non-resident individual or foreign company acquiring more than 10% of an Andorran company's capital or voting rights needs prior authorisation. The ministry must decide within two months, extendable by half; with no express decision in time, the application is deemed refused. The law also bars investors from FATF non-cooperative countries and anyone flagged by anti-money-laundering bodies.

The notary will not sign without it. Sources conflict on timing: with the extension, this step alone can legally take three months, longer than the six-to-ten-week total advisers quote.

What it costs to open and keep

State fees at formation come to about EUR 1,322. Notary and lawyer fees are extra. The annual charge depends on activity: EUR 851 for a holding company or one without an open business, or only the EUR 214.21 Trade and Industry Register fee once a business is open.

Since Law 10/2024, an audit is required after two consecutive years above two of three limits (EUR 3.6 million of assets, EUR 6 million of turnover, 50 employees) or above EUR 10 million of turnover.

The tax: 10%, a floor, and a start-up rate that is not in the law

The general rate is 10%. Since Law 5/2023, deductions and carried-forward losses cannot cut the tax due below 30% of the gross charge on the year's positive base, so a profitable company pays at least 3%. The real reduced regime is for intellectual property: 80% of qualifying income from patents, utility models and protected software is excluded, in proportion to own development spending, taking it down to 2%.

Sources conflict here. Some adviser material advertises a reduced rate for new companies; the consolidated law on the government's legal portal contains none. Its only general 50% reduction applied to the tax's first year, and the old special regimes for international trading, intragroup finance and foreign holdings ended with periods finishing by 31 December 2020. Ask for the article before budgeting for one.

Substance decides whether the 10% survives

Andorra treats any company incorporated under its law as resident. Your home country tests from the other side: if the only director lives in Madrid or Moscow and decides there, it can argue the company is managed, and taxable, where the director sits.

Controlled-foreign-company rules do the rest. Spain can attribute certain income of a foreign company to a shareholder holding 50% or more with related parties, when tax paid abroad is below 75% of the Spanish charge; against Spain's 25% general rate, 10% falls short. Russia exempts companies taxed at 75% or more of its weighted average profit-tax rate, which 10% cannot reach, so an Andorran company needs another exemption, such as the active-company test: passive income of no more than 20% of the total.

Banking is part of it. No bank certificate, no deed; banks run anti-money-laundering checks on every future shareholder, and under Decree 182/2026 the Government has committed to adopting EU Council sanctions on Russia. A founder with no local ties, a passive business and a director abroad is exactly the profile that struggles.

Who this is actually for

An owner-manager who is moving to Andorra. Active residency, the self-employment route covered in our explainer, is built on this company: more than 34% of it, a board seat, a permit from a limited quota, a EUR 50,000 payment to the Andorran Financial Authority and permanent residence, with tax residence starting above 183 days a year. That makes the 10% defensible: the company is managed in Andorra because its manager lives there.

It is a poor fit for anyone staying put and running the company remotely: the permit can be refused, and home-country rules are likely to pull the profit back. If you are not moving, Estonia incorporates online and taxes profit only when it is distributed. For an EU base with 15% corporate tax that you could actually relocate to, compare Cyprus.