Andorra Company Formation Process
Company Formation and the Residency Options Available.
A non-resident is now allowed to form, and own an Andorran Company as if he were an Andorran resident, but the application is subject to a process of Foreign Investment Approval in the first instance.
Under the new regulations any person who owns 11% or more of a company in Andorra can then apply for Category D Active Residency or Category B Passive Residency (For example husband and wife jointly owning a company). An applicant may also own 100% of an Andorran company (called an S.L.U.), there is no need for more than one Director if not required. In both cases the minimum share capital requirement is €3,000. It is important to discuss with me which residency option is the preferred route since the timing sequence for Category B and D is markedly different.
I work closely with local Accountants and a lawyer who are able to advise you and arrange everything for you, from approval of an investment by a foreigner (first step) to actual company formation and a trading license (second step). The accountants will complete the company formation stage and I complete the Immigration stage for whichever category of residency you may choose (Or not if no residency is actually required). Please note that procedures for opening a company in Andorra differ from the norm in most jurisdictions, for example there are no ready made shelf companies for purchase, each company application being subject to approval both on the applicant and the area of business. That does not mean that there are no companies available for purchase but it does mean that the purchaser will be subject to the same invesment approval and in most cases the statutes of the existing company will require to be changed. All things considered a new company formation is the best route. Fees are quite high compared to "off the shelf" packages and much of the expense is Government registration.
In general the following documentation is required for each shareholder to commence the company formation approval:
· A Police Certificate from the country of birth. If the passport is different from the country of birth, a second police report from the country of nationality of the passport. In some cases a third police report if the current country of residence is different again (please discuss as this can be dispensed with in most cases).
· Photocopy of the information page of your passport(s) or if in Andorra we can arrange to have your passport original notarised (a lot easier if you are planning to be here).
· A Curriculum Vitae .
Sequence Events of Company Formation.
To start the company formation it is best to arrange a short visit during which you can notarise in Andorra the documents you have obtained and the copy of the passport, instruct the lawyer or Accountants and look to open a bnak account.
A company name will then be agreed upon and applied for along with foreign investment approval. Government are required to respond within 30 days and may do so to request further information or clarification. In general a simple application will receive approval within the 30 days. The applicant is then required to return to Andorra to go before the Notary to complete the company registration. The company stautes and registration are the available within 5 to 7 days from the date of the Notary signing.
At this stage and if residency Category D is to be requested we can then apply to Immigration.
The final stage of company formation is the local trading license called the "Obertura de Comerç". This involves an inspection of the registered premises, health and safety due diligence and an approval at Parish level to operate the company at that address. Please note that the address can be your residential address subject to some basic minimum requirements and the agreement fo the landlord.
Once that is completed you will need to apply for CASS ( Local social security) which is obligatory for all shareholders. The monthly contribution is fixed at 449.10 euros per shareholder (from 2017) but in the first 12 months this is reduced by 50% to 224.55 euros monthly.
Residency need not be an option and a non resident can operate the company. If however the company actively trades in Andorra then he will need to appoint a local administrator, again the lawyer or accountants can advise on that.
Company profits tax is 10% but the distribution of profits from an Andorran company is not then taxed at the personal level. IGI ( or IVA, VAT etc is 4.5%). Annual returns are required for accounts, tax calculation, IGI ( twice per year or more) and the accountants will be able to complete all of that for you.
Please also read www.andorrancampanies.com for a general overview and contact me for more detailed advice if you would like to explore further.