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  Professional offshore incorporations and offshore banking services since 1996

Andorra

Company Incorporation


    ANDORRA PRICE LIST

    For the SL incorporation including capital, notary fees, governmental fees and our fees will cost 7900 Euro from which 4000 Euro capital of the company and will be deposited to the bank until company is incorporated and licensed.
    After company is licensed with all corporate papers the client can use this capital for his/her business or any other needs.

    Next Year
    Corporate Tax 1.100 € aprox.
    Local tax 600 € aprox.
    Administrator 2.500 €
    Accountancy & Management MIn. 200 €/month

    We also providing bank introduction
    Our other services include following:
    Motor:
    Vehicle registration (Resident plates) €165
    Vehicle registration (Tourist plates) €200
    Driving license application (New) €140
    Driving license application (Renewal) €100
    Visit Inspecciˇ tŔcnica de vehicles €140

    Administration and Social Security:
    ResidŔncia application (New) €275
    ResidŔncia application (Renewal) €200
    Work permit application (New) €175
    Work permit application (Renewal) €150
    Sol.licituds €200
    Collection of residence documents (Govern) €120

    We don't usually recommend Andorra as a place to incorporate for aliens !

    Indeed, given all the information below, we should point out right at the start that although most people imagine that having a company in Andorra - where taxes are negligible - would be a good idea, most usually this is not the case. 
    Anyone continually using an Andorran trading entity to deal with fixed service clients in the EU for example, would pretty quickly find that the question of withholding taxes would apply. In other words a taxable client in these countries continually paying invoices for services to an Andorran enterprise would be required by his taxman to deduct tax at source because quite obviously Andorra has no double taxation treaties with any country. Conversely, if you are primarily interested in trading in physical goods, then there would be less tax scrutiny in the receiving country but Andorra has been limited by the EU in its ability to export goods not manufactured within Andorra. Since there is almost nothing manufactured here anyway, there remains little scope.

    There are however more possibilities for licensing deals, intellectual property and software companies and other service businesses and, indeed, for international triangular dealing in goods. But any structure should be carefully thought out before committing to it. In essence Andorran trading entities are, in the main, best for trading within Andorra. One should also note that Andorra is pretty ferocious in controlling unauthorized trading. It is not an offshore environment as many people imagine. It is most definitely onshore - it just happens to be a non-tax jurisdiction. Anyone trying to purport to trade from Andorra by means of a foreign trading enterprise and an accommodation address here, will be quickly run out of town and no Andorran bank will accept a foreign corporate account. Not even foreign trusts are recognized here as qualified persons - mainly because there is no necessity for them here, given that individuals pay no tax.

    To sum up, Andorra offers significant advantages to individuals but is not usually suitable for offshore trading structures.

    Societat Limitada

    Should you be new to Andorra and be contemplating a new business, there are two main options, since it is unlikely any Andorran will involve himself with you with a simple Registre de comerš name, which implies possible unlimited liability.

    The first, known predictably as an "S.L.", is the simplest form of limited liability company in Andorra. The nominal capital is of 1 million pessetes and the reserves should be nominally increased by 10% per annum, although this provision is difficult to enforce except in the case of liquidation, where the titular could be held responsible.

    First of all a company name must be chosen. The name proposed may not now have the words Internacional, Andorra, Principat, or other component that would have the effect of giving the enterprise a supposedly official or dubiously upmarket or old-established status. (Company logos are now similarly restricted). Acronyms are often given in addition, such as for example: CISA - meaning Constructora ImmobiliÓria S.A. Once both name and acronym have been checked for availability with the central register of business names, one seeks permission from Andorra Govern by means of a s˙plica for incorporation.

    The estatuts (articles of association) and raˇ social (aims of the company) are normally written by a lawyer, who may or may not be the proposed titular, and submitted at the same time to the government for approval. This approval is not necessarily a formality and the articles can either be sent back for revision or refused completely. There are relatively few problems with this stage in the case of pure holding (i.e. non-trading) companies set up, say, to hold Andorran property. However, with a proposed company where it is obvious that the non-Andorran party is intending to operate the company and is a resident of very recent date, permission would be more difficult. As a general rule the authorities like to know with whom they are dealing, and a lack of proficiency in the language and a reasonable grounding in the customs of Andorra would be black marks. In other words if a sole non-Andorran party had not even held a work permit before, it is most unlikely that a company would be authorised quickly. There are no formal enquiries made that one might be aware of, but as always in Andorra when these questions arise, one can be sure that they are made, and diligently so.

    Once the articles have the stamp of approval from Andorra Govern, the minimum capital should be deposited in a bank and the parties must formally incorporate the company before a notary. At this time a suitable fiduciary contract must be agreed and signed, as must a full power of attorney in favour of the non-Andorran party to allow him to act for, and in the name of, the company in all daily matters. Once this has been achieved, an application for the opening of the business must be made to the relevant Com˙, who will check the proposed trading premises and charge their local taxes. The application is accompanied by a certificate from the landlord. Once the Com˙ has approved everything, a final s˙plica must be made to Andorra Govern for the public opening of the enterprise. The whole process can take anything from three or four months to at least a year, cost a minimum of 400.000 ptes, depend on many factors, and we strongly advise to consult with us, at least in the initial phases, as to the details. Consultancy fees are chargeable but will prove to be money very well spent. The current tax on an S.L. is 100.000 ptes per annum. Where the company trades in Andorra as opposed to just being a holding company, the company must still, like an individual apply for the Registre de comerš and pay the applicable annual tax.

    Societat An˛nima

    This is for substantial business investments and multiple shareholder situations. The minimum capital requirement is 5 million ptes. An "S.A." obviously has a bit more class than its little brother the "S.L.", but many well-known and highly profitable enterprises have never upgraded. Basically the same processes apply as for an "S.L." but with even stiffer conditions. The current tax on an S.A. is 150.000 ptes per annum. Again, where the company trades in Andorra as opposed to just being a holding company, the company must still, like an individual apply for the Registre de comerš and pay the applicable annual tax.

    General Trading

    Once registered and incorporated and in possession of the Registre de comerš permission, a business may trade in any terms for which it is authorised. With limited companies, there is a requirement for trading accounts to be maintained but there is no formula to which one should adhere. In other words as long as one behaves, no rules apply. There is no necessity for accountants or other high priced advisers and there are no taxes to pay currently except as previously described.

    The only formal requirement that impinges on normal trading is registration at Caixa Andorrana de Seguretat Social - the C.A.S.S. as it is known - as an employer. All new work permits applied for are chargeable at 25.000 pessetes each and then the employer must pay 13% of the employee's salary as an employers' contribution every month. The real rate of the contribution is set at 18% of salary but 5% is nominally payable by the employee. It is quite normal for companies in Andorra to pay the employee's contribution as well, but this is not mandatory; indeed it is not strictly legal to do so. Employers should note that there is a minimum wage in force in Andorra. (See our help Sheet on Work Permits and on Caixa Andorrana de Seguretat Social).

    Once these minor matters are attended to, trading in Andorra is about as easy as it could possibly be. Ethics amount to behaving yourself carefully, not dealing in drugs or white slaving and whether you are able to pay your bills and conduct a proper business, to which end it is advisable to make sure that sufficient funds are available to cover all trading difficulties in the first few years. Nothing gets around quicker in Andorra than a rumour that a certain company is unable to pay on demand, and we strongly advise not counting on any more than an absolute maximum of 30 days credit from trade accounts. Better to pay cash and take whatever discounts are offered. It is to be noted that there is no sanction in law against disregarding other countries' fiscal or legal arrangements and re-invoicing is commonplace for international trading, although not to be considered for the physical importing of goods into Andorra. The golden rule is to use one's common-sense, and as long as one does not indulge in any business contrary to the very basic set of crimes in Andorra (Codi Penal) all should be well. Of particular interest to companies in this respect, are the stiff penalties provided in law against such things as fraud, and abuse of confidence by directors or employees. Telling any third party about any matter to do with a company or its private dealings with clients is prohibited, and even in the case of very serious suspected crimes it is exceedingly difficult for any authority in Andorra to openly investigate any details of a business. In the case of suspicion of crime the police are of course able to apply to close or suspend a business immediately and felons are normally persuaded surprisingly easily to "volunteer" information.

    The other point to note is that it is inadvisable to rely too much on suppliers' (or customers') accounting systems. Since one is automatically expected to pay creditors on demand, old school Andorrans, whose accounts may well be in their back pocket, tend to be a bit haphazard about charging. They are quite likely to forget to send a bill for a few months, or have better things to do like plant tobacco. Then suddenly they will surface and send a debit note or lletre de canvi for immediate settlement to your bank for a whole slew of bills for the last 3 months and eighteen days which may bear no relation to your own precise monthly summaries and lead to total confusion, not to mention cash-flow trauma.

    Again it should be noted that approval for a limited company incorporation does not imply the right of any person involved to actually work in Andorra without the necessary permit from the Oficina d'Immigraciˇ. It is forbidden to trade in Andorra in any manner, which could be taken to be acting as an unregistered Andorran "branch" of some foreign-registered enterprise. Those who try to set up mail drops and invent fictitious Andorran trading names, or otherwise abuse our commercial "paradise", quickly find that the mail does not arrive and the police ensure that the perpetrator departs (preferably after a spell in our thoroughly un-recommendable local jail). Acting as a consultant outside Andorra, whilst formally being a resident here, is perfectly acceptable - indeed encouraged, though we do not advise that mail should be addressed other than in the consultant's own name, to avoid any suspicion of illegality.

    What the future holds on the company front?

    Taxes

    There is no question in anyone's mind at this stage of any sort of profits tax. The government is currently making noises about a sort of VAT but in order to set up such a scheme, legislation would have to be passed throwing out all the rules on non-disclosure, privacy etc and setting up a formal tax office which does not currently exist. It would also have to allow for a long period of training for accounting staff. It would be brave man who could engineer such legislation through the Consell-General, our parliament. This does not mean to say that Andorra Govern, like other governments, is not anxious to increase its income and there is no doubt in the minds of serious observers that the current very small fixed taxes on businesses will increase, possibly using the number of employees as a base calculation figure.

    Foreign Companies

    There have been several indications of government interest in relaxing the majority-Andorran rules. It would do away with the charging of prestanom fees, and all the ducking and diving that goes on, and would leave the government free to collect similar sums themselves instead of the fees disappearing into private pockets. There are, however, extremely wealthy and entrenched vested interests against allowing foreigners to control a bigger slice of the local economy. The present government is certainly working on proposals to modify the mercantile law to allow a separate register of foreign-controlled companies (known temporarily as Class C companies), but these, unlike "Andorran" companies, would pay a percentage profits tax and be bound to declare their accounts. This register is likely to be for those businesses which are considered vital to the national interest and possibly ordinary commercial situations, but with the main trading being done outside the Principality. Class C companies are also envisaged for covering international intellectual property and consultancy situations. The idea is that such companies could benefit from partial double-taxation agreements, but given the competition from other offshore and onshore jurisdictions we cannot, at this stage, see them being very popular. In addition the Andorran government has patently failed to interest any country as yet in to signing a double taxation agreement.

    Formation Costs:

    - Andorra S.L. coming complete with a standard Authorized Share Capital of ESB1,000,000.

    - Provision of domiciliary services to include provision of the Registered Office and Agent services, one Nominee Corporate Director, all outgoing charges and out-of pocket expenses (i.e. fax, courier charges, etc.).

    - Prepared General Power of Attorney with minutes and resolution which will appoint you to be the lawful Representative Agent of the Company and which will allow you to act for the Company in all matters, including opening and operating bank accounts.

    Timescale: 6-8 weeks but it does take approximately 1 week more for documents to arrive from Andorra.

    - Incorporation & 1st Year Maintenance Fees: ESB1,000,000 (all inclusive fees) -> Annual maintenance after first year: ESB300,000-

    Optional services:

    - We can open a corporate bank account at any Andorran bank. Our fees for attending to the account opening procedures would be US$1,000.

    - Mailing Address and mail forwarding service from Andorra: US$400 + US$100 deposit to cover cost of postage.



    General Info about Andorra:

     

    With a surface of about 460 KM2, and located in the Pyrenees, between Spain and France, Andorra has preserved its neutrality and its identity through more than 700 years with an unique record of diplomatic non-involvement in European affairs.

    The elected local government consisting of Cap de Govern (President) and his ministers (28) directs government from la Casa de la Vall (the Houses of Parliament). In 1993, Andorra created its own constitution and is now a member of the United Nations.

The French and Spanish governments, the two co-princepts retain responsibility over military defence and extreme foreign affairs.

The Principality is a no tax jurisdiction with no direct taxation being levied on income, capital or corporations.  Wealth and inheritance taxes do not exist.

The population of Andorra is 60,000 from which 20,000 are native Andorran. The official language is Catalan, but Spanish and French are widely spoken and accepted.

The economy of Andorra is split between farming, banking, financial services and tourism, with over 12 million tourists visiting the country every year.

The Principality is an ideal location in which to site management and control of offshore companies. Banks offer a wide range of professional, discreet and confidential services with banking secrecy being upheld by law. Andorran companies can be established for local trade, asset and investment holding and cross-border commerce.

There are two types of Andorran companies, both of which enjoy limited liability.

The Societat Limitadad (S.L.) is a company often used for local trading and must have a paid up share capital of at least ESP1,000,000 (Spanish Pesetas).

The Societat Anonima (S.A.) is usually established for businesses which enjoy a much higher turnover and must have a minimum paid up share capital of ESP5,000,000.

andorra.jpg (14807 bytes)

THE ANDORRAN SOCIETAT LIMITADAD (S.L.)

TAXATION

 There are no corporate taxes whatsoever.

SHAREHOLDERS

 A minimum of two shareholders are required and at least one shareholder must be of Andorran nationality owning a minimum of 67% of the company’s share capital. Non-Andorrans and non-residents can only own 33% of the share capital. Details of shareholders are kept at the local registry. An offshore company can be used to own 33% of the share capital.  It is possible to arrange for an Andorran citizen to act in a nominee capacity for the ultimate owner of the company.

COMPANY OFFICERS

The share capital must be fully paid up in advance of incorporation.  This amount must be deposited with an Andorran bank in a designated company incorporation type account.  The bank must then release a special certificate, addressed to the designated notary, responsible for concluding incorporation formalities.

CAPITALISATION

The share capital must be fully paid up in advance of incorporation.  This amount must be deposited with an Andorran bank in a designated company incorporation type account.  The bank must then release a special certificate, addressed to the designated notary, responsible for concluding incorporation formalities.

ANNUAL REPORTING

Accounting information and books must be maintained at the company’s registered office, but these need not be audited or filed with local authorities.

TIMESCALE

A company name check can take up to five working days and ready-made companies do not exist. After the share capital has been deposited in the manner mentioned above, it will take up to two months to incorporate the company.

RESTRICTIONS ON NAME AND ACTIVITY

Names must end with S.L. It is advisable that the chosen name be at least Catalan-sounding.


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