Questions and Answers about Starting Business in Andorra.
Starting a business can be a stressful task for you, especially if you want to start your own business in a foreign country. Andorra is a small business haven of the Pyrenees, but few people know about the advantages and information of doing business in Andorra. Before July 2012 only three or four companies that were not from Andorra had a permission to do business in Andorra, but now things have changed and Andorra is a business paradise for you because foreigners are granted with ‘economic rights’!
Do you want to invest in Andorra?
- You don’t have to wait for 20 years to be eligible to trade or do business in Andorra like before 2012.
- You can be owner of 100% of an enterprise in Andorra.
- You don’t have to be a resident of Andorra in order to trade or do business.
- Professionals, consultants and internationally recognized scientists and sportsmen can ‘trade’ within Andorran tax-free system.
- Investment under 10% doesn’t require any governmental approval, all investments exceeding this number need to be approved by the Ministry of Finance.
- However, you can buy properties only if they are connected to your business (warehouses or shops).
Do you want to start a company?
- The formation of a company by a non-Andorran must be approved by the Ministry of Finance.
- The statute of a company must be specific since Andorran government doesn’t encourage the creation of off-shore entities.
- If you want to trade in Andorra your company needs to have a trading license where taxes are from 4.5% to 10%.
- Working in Andorra requires a working permit, if you are a ‘resident without paid activity’ you can be a director of your company.
- However, there is still a 10% tax for a non-resident shareholders.
Do you want to buy a business?
- Having a company doesn’t make you eligible to trade – you need to check who has the trading license: an individual or a company
- If you want to buy shares in an existing company it is also easy but you will have to get a permission from the Government since you are not a resident of Andorra.
What businesses are suitable to do in Andorra?
- Since of its size, warehousing or manufacturing shouldn’t be started.
- Multilingual and educated work force is a guaranteed good start.
- Some business that are successful in Andorra include: multilingual call centers and services, online sales and marketing, international consultancy, franchising etc.
- There is almost no local competition.
Andorran banks – how do they rank?
- You should know that given the current situation in the banking sector all across the world Andorran banks still have a high ratings.
- Some Andorran banks are present worldwide, especially in the Americas.
- Because Andorra doesn’t have a currency of its own the euro is in use, but you can easily do transactions in almost all currencies.
Residing in Andorra – are you eligible?
- The new immigration law in Andorra determines the two main ways how you can come to live in Andorra: residence with work permit and residence without work permit.
- Residence with work permit is renewable, nationals of EU/EEA have an advantage, but there are quotas for any other nationals or categories of occupations.
- Residence without work permit has three categories: residence permit without paid activity, residence permit professional persons with an international client base and residence permit for reasons of scientific, cultural or sports interest.
- Applicants must give proofs that they do not obtain a criminal record or that they have any notifiable disease.
Is Andorra a Tax Haven?
A tax haven is a locale, or a country, state or territory, that is popular among wealthy individuals and businesses because its tax laws allow them to legally reduce their tax liabilities. Typically, this is done by allocating assets to offshore bank accounts or shell companies, or by taking up residency to benefit from lower tax rates.
- If your income is less than 23.999 euros a year, there are no taxes.
- Incomes from 24.000 to 39.999 euros a year are taxed with 5%, and more than 40.000 euros with 10%.