Andorra Company Formation: Establish Your Business in Europe's Most Tax-Efficient Jurisdiction

– Europe’s Lowest Corporate Tax: Maximum 10%

Andorra’s corporate tax rate is capped at 10%—the lowest in Western Europe. Compare this to 25% in Spain, 32% in France, 19% in the UK, or 21% in the USA. For profitable businesses, this difference translates to substantial savings that can be reinvested in growth. Even better, new companies benefit from reduced rates: 2% tax on the first €50,000 of profit during their first three years of operation.

– No Double Taxation on Dividends

When you receive dividends from your Andorran company as an Andorran tax resident, you pay 0% tax on those distributions. This is exceptional in Europe, where most countries impose double taxation—first corporate tax on profits, then personal tax on dividends. Andorra taxes profits once at the corporate level, then allows tax-free dividend distribution to shareholders who are Andorran residents.

– Simple, Flexible Company Structures

Andorra offers straightforward company structures without the complexity found in many jurisdictions. The most popular option—the SL (Societat Limitada or Limited Liability Company)—requires just €3,000 in capital and can be formed with a single shareholder and administrator. There’s no requirement for multiple directors, board meetings, or complicated governance structures unless you want them.

– 100% Foreign Ownership Permitted

Since 2012, Andorra has allowed 100% foreign ownership of Andorran companies. You don’t need an Andorran partner, local co-owner, or nominee shareholder. Your company can be entirely owned and controlled by you, giving you complete authority over business decisions and eliminating concerns about sharing control or profits.

– Fast Formation Timeline

With proper preparation, Andorran companies can be formed in 4-6 weeks from application to full registration. This includes foreign investment authorization (required for non-residents), banking setup, notary coordination, and commercial registry. Many jurisdictions require 3-6 months for similar processes.

– Strategic European Location

Located between France and Spain, Andorra provides easy access to European markets while maintaining sovereignty and favorable tax policies. You’re 2.5 hours from Barcelona, 3 hours from Toulouse, and well-connected to major European business centers. Your Andorran company can serve European clients without the high taxes and regulations of EU member states.

– Modern Digital Infrastructure

Andorra boasts fiber optic internet coverage throughout the country with speeds rivaling major European cities. This infrastructure supports online businesses, software companies, digital services, and any operation requiring reliable, high-speed connectivity. Remote work is seamless, video conferences are crystal clear, and cloud-based operations run smoothly.

– Political and Economic Stability

Unlike many low-tax jurisdictions, Andorra combines favorable taxation with rock-solid political stability, strong rule of law, and a transparent financial system. The Principality has signed tax information exchange agreements and complies with international standards, ensuring legitimacy and long-term security for your business operations.

– No Minimum Turnover Requirements

Your Andorran company can generate €10,000 or €10 million in revenue—there’s no minimum turnover requirement. This makes Andorra suitable for startups, side businesses, consultants, freelancers, and established operations alike. You pay tax only on actual profits, and there’s no penalty for low revenue in early years.

– Holding Company Benefits

Andorra offers an exceptional holding company regime. Andorran holding companies that own shares in foreign subsidiaries pay 0% tax on dividends received from those subsidiaries and 0% tax on capital gains from selling subsidiary shares (subject to conditions). This makes Andorra an attractive jurisdiction for international group structuring.