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Foreign investors looking to establish a presence in Andorra need to have a clear understanding of the country’s corporate law. Andorra, a small principality located in the Pyrenees mountains between Spain and France, offers several advantages for foreign investors, including a favorable tax regime, political stability, and a strong financial sector. This blog post aims to provide an overview of Andorra’s corporate law and highlight key considerations for foreign investors.

Legal Framework

Andorra’s corporate law is primarily governed by the Companies Act of 2014. This legislation sets out the rules and regulations for the establishment, operation, and dissolution of companies in the country. The Companies Act applies to all types of companies, including both domestic and foreign-owned entities.

Types of Companies

There are several types of companies that foreign investors can choose from when establishing a business in Andorra. The most common forms include:

1. Sociedad Limitada (SL): This is the equivalent of a limited liability company (LLC) in other jurisdictions. An SL requires a minimum share capital of 3,000 euros and can have one or more shareholders. The liability of shareholders is limited to their capital contributions.

2. Sociedad AnĂ³nima (SA): This is a public limited company and is typically more suitable for larger businesses. An SA requires a minimum share capital of 60,000 euros and must have at least three shareholders. The liability of shareholders is limited to their capital contributions.

3. Branch Office: Foreign companies can also establish a branch office in Andorra. A branch office is considered an extension of the parent company and does not have a separate legal personality. However, it can engage in commercial activities and enter into contracts on behalf of the parent company.

Company Formation Process

The process of forming a company in Andorra involves several steps. Here is an overview of the key requirements and procedures:

1. Name Reservation: The first step is to reserve a unique name for the company. The name must not be identical or similar to any existing company in Andorra.

2. Share Capital Deposit: For SLs, the minimum share capital of 3,000 euros must be deposited in a bank account before the company’s formation. For SAs, at least 25% of the minimum share capital must be deposited initially.

3. Articles of Association: The company’s articles of association must be drafted and notarized. This document outlines the company’s purpose, share capital, shareholder information, and other relevant details.

4. Registration with the Trade Register: The company must be registered with the Andorran Trade Register, providing all necessary documentation, including the articles of association, proof of share capital deposit, and identification documents of the shareholders and directors.

5. Tax Registration: After the company is registered with the Trade Register, it must also register for tax purposes with the Andorran tax authorities.

Corporate Governance

Andorra’s corporate law emphasizes the importance of good corporate governance practices. Companies are required to have a board of directors, which must include at least one resident director. The board is responsible for the overall management and decision-making of the company.

Additionally, companies are required to hold annual general meetings of shareholders and maintain proper accounting records. Financial statements must be prepared in accordance with generally accepted accounting principles and submitted to the tax authorities.

Tax Considerations

One of the key advantages of establishing a company in Andorra is its favorable tax regime. The country has a territorial tax system, which means that only income generated within Andorra is subject to taxation. Foreign income is generally not taxed.

The corporate tax rate in Andorra is currently set at 10%, making it one of the lowest in Europe. However, it is important to note that certain sectors, such as financial services and real estate, may be subject to additional taxes or specific regulations.


Understanding Andorra’s corporate law is essential for foreign investors looking to establish a business in the country. The legal framework, types of companies, formation process, corporate governance requirements, and tax considerations are all important factors to consider. By familiarizing themselves with these aspects, foreign investors can make informed decisions and navigate the legal landscape with confidence. Andorra’s attractive business environment, combined with its favorable tax regime, makes it an appealing destination for foreign investment.

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Additional Resources

Resource Link
Company Registration with the Andorran Government Andorran Government
Foreign Investment Application Advantia Advisory
Business Bank Account Setup MoraBanc Business Banking
Obtaining NRT (Tax Registration Number) Andorra Guides – Taxes
Company and Legal Structure Information Setup Andorra
Public Notary Services in Andorra Andorra Notary Services
Commercial Registry Access Andorra Commercial Registry
Legal and Tax Advisory Services Andorra Insiders
Understanding Andorran Taxes and Business Law Laduchi Consult
Guidance on Economic Substance and Business Operations Andorra Inc