Set up a company in Andorra: 10% corporate tax works best when the business is genuinely managed there.
Andorra combines a 10% standard corporate income tax, 4.5% general IGI and a credible company framework for entrepreneurs who genuinely operate from the Principality. Incorporation without moving management, activity or personal residence can create a corporate-residence conflict.
Low tax with real presence.
Andorran companies can be formed as SL, SLU, SA or SAU. Foreign non-resident investors face a foreign-investment authorisation process in addition to banking, corporate, tax and business-opening procedures.
SL / SLU
Typical private-company route; official minimum capital €3,000 and single-member form available.
SA / SAU
Larger structure; official minimum capital €60,000.
Holding
Participation exemptions can apply to qualifying dividends and gains, but only where statutory conditions are satisfied.
A company always pays only 10% even if managed from Spain.
Company formation automatically gives personal residence.
Every Andorran holding receives exempt dividends and gains.
Registered office + bank + accountant prove effective management.
Foreign effective management can create corporate residence abroad.
Company, foreign investment, business opening and residence are separate processes.
Participation exemptions have conditions.
Effective management follows real decisions, functions and administration.
| Corporate income tax | Standard 10%. | Tax base, related parties, deductions and special regimes. |
| IGI | General 4.5%; other statutory rates exist. | Place of supply and cross-border services. |
| SL / SLU | Minimum capital €3,000. | Owners, director, objects and funding. |
| SA / SAU | Minimum capital €60,000. | Governance and genuine need. |
| Foreign investment | Applicable non-resident investors need foreign direct-investment authorisation. | KYC, criminal records, CV, business plan and approval. |
| Banking | Pre-incorporation account funds capital and supports the bank certificate. | UBO, activity and source of funds. |
| Business / CASS | Tax registration, trade name, business opening and social-security steps follow incorporation. | Operational calendar. |
| Residence | Company ownership does not itself grant tax/immigration residence. | Shareholding, management role and immigration rules. |
Founder genuinely living in and managing from Andorra.
International service/digital business with management and administration in the Principality.
Holding that genuinely meets participation-exemption requirements.
Founder aligning company, residence, banking and wealth planning in one jurisdiction.
Founder keeping home, work, team and effective management in Spain.
Low-margin business where presence/banking costs erase the tax advantage.
Company created only for the 10% rate without moving real functions.
Plan assuming company and residence are one application.
Effective management decides more than the address.
The Spain–Andorra treaty entered into force on 26 February 2016. A dual-resident company is treated as resident only where its place of effective management is located. The Protocol preserves CFC and anti-abuse rules.
The self-employed foreign-investment residence route is separate. Official rules include, among other requirements, a shareholding above 34%, a management-board role and effective management/control functions; a €50,000 AFA deposit can also apply.
See Andorra tax residencySee Spain departure planning
Design before filing.
Compare Andorra with Cyprus, UAE, Estonia, UK and alternatives.
Choose SL/SLU, SA/SAU or holding based on business and owners.
Model CIT, IGI, distributions and related-party flows.
Coordinate foreign investment, business plan, bank and incorporation.
Separate company, business licence and personal residence.
Document effective management and home-country position before implementation.
Explore International Tax Tailoring
Questions to answer before incorporation.
What corporate tax does an Andorran company pay?
The standard rate is 10%, subject to tax-base rules and applicable special regimes.
What is IGI?
The general indirect-tax rate is 4.5%; other statutory rates apply to defined transactions.
Can a foreigner form a company?
Yes, subject to the applicable foreign-investment process and documentation.
What minimum capital is required?
€3,000 for an SL and €60,000 for an SA.
Can one person own the company?
Yes. SLU and SAU forms are available.
Does company formation give residence?
No. Residence is a separate immigration/tax process.
Can Andorra be used for a holding?
Potentially, where participation-exemption conditions are met.
Can I manage it from Spain?
You can own/direct it, but effective management in Spain can create Spanish corporate residence.
Is a bank account required?
The official formation process includes a pre-incorporation account for paid-in capital.
How long does it take?
There is no guaranteed single timeline; foreign-investment approval, banking, notary, registry and business opening vary.
Andorra works best when the company does not merely look Andorran — it actually operates there.
We analyse company, residence, effective management and banking as one decision.