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Understand the Jurisdictions Setup Requirement Before Proceed Your Company Incorporate in Andorra
If you are an investor, you might be thinking of doing business in Andorra. Andorra is a small European country which reformed many of its laws regarding company formation and ownership. The Andorra government used to limit investors to only 49% of a company’s capital to set up a company. Now, investors can invest up to 100% of a company’s capital, even in local companies.
Business people are attracted to Andorra because of other factors, such as:
- An investment climate hospitable to foreign investors
- A comprehensive regulatory system
- A reasonable corporate tax rate
- Low capital gains taxes
Types of Company Structure
There are two basic kinds of company structure when you register the company in Andorra. These are:
- Societat Limitada (SL) – This kind of company is useful if you only have a small business. You need only 3,000 euros to set up an SL. In other countries, the size of this company structure is similar to a “limited liability company”.
- Societat Anonima (SA) – This is the kind of company you need if you have multiple shareholders. You can set up this company structure if you invest 60,000 euros during incorporation.
If you are a single shareholder, you can choose another kind of company structure dubbed Societat Limitada Unipersonal (SLU). You may set up this kind of company structure if you invest 3,000 euros during incorporation.
Process of Company Formation
If you are putting up an SL without assistance from a consultant, you pay 1,800 euros. This is inclusive of name registration fees as well as notary fees. For an SA, you have to pay 1,800 euros also, inclusive of name registration fees and notary fees.
Investors can be residents or non-residents of Andorra. The government will have to check your application for company formation if non-resident investors own over 10% of the company. This means the Department of Foreign Investments of Andorra has to scrutinize your application. This kind of examination of the volume of foreign investments in your Andorran company may take up to four weeks.
Take note that the Andorran government frowns on the use of “off-the-shelf companies”. These are companies that were formulated to be sold to investors who want to bypass the company formation process. This is partly why the state has decided to make company formation less cumbersome and more friendly to investors. (Investors may also invest due to the low costs of infrastructure and business).
Regardless of which kind of company structure appeals to you, you need to designate a registered office. You also have to tag an “Administrador” (another name for Director). All companies, regardless of their size and number of residents as incorporators, are considered “resident companies”. Your company in Andorra has to submit quarterly reports and annual reports plus tax declarations.
You can do the whole process of going to incorporate in Andorra in a month, assuming there are no mistakes in documentation spotted. The government may pause processing if you describe the company’s scope of operations in an overly broad manner in documents. Because of this, you need to consult a lawyer if the company structure is more complex, as with an SA.
If you are going to incorporate in Andorra soon, contact us to guide you through the process of incorporation. This will make your company incorporate activities in the country more pleasant and welcoming, so you will avoid any mistakes.