Holding company in Andorra

You couldn’t find a better place to live than Andorra, for both personal and professional choices. Indeed, the Principality has implemented an attractive tax system, in addition to great living conditions offered to its residents. Many efforts have been made to improve the transparency of the tax system in Andorra, in the meantime there are still a large number of benefits offered to those who want to create a company in Andorra. The Principality is still as attractive for all the companies as before, but the advantages are even greater for holding companies and international trading companies. Andorra Solutions presents you all the advantages you can benefit if you decide to create a holding company in Andorra.

Holding companies in Andorra are subject to a particular taxation, different from the taxation for normal companies.

Holding companies have shares in other companies located in foreign countries. They are classified as Entities Holding Foreign Securities or Entidades de Tenencia de Valores Extranjeras (ETVE) in Spanish.

If you choose to set up a holding company in Andorra, you can be tax-exempt on dividends and capital gains in the following cases:

• a non resident company located in a foreign country which has a holding company resident in Andorra as a shareholder is subject to paying taxes in its own country similar to the Andorran income tax;
• the percentage of participation – direct or indirect – in the capital, equity and assets of the company, the patrimony or the voting rights shouldn’t be less than 5%. This participation must be held continuously during a minimal one-year period before the day when the profit is distributed. If the profit isn’t distributed, the participation has to be maintained as long as this period of time is completed.

Andorra has a strategic position between France and Spain, in the heart of Europe and the Pyrenees, offering unrivalled living conditions to the residents. This central location makes also Andorra be in the heart of an important cultural mix, with French, Spanish, Portuguese and Catalan influences.

Thanks to this multicultural diversity, Andorra provides three different high-quality types of education system, as well as plenty of private and specialized schools. Andorran healthcare system is also one of the best in Europe. Moreover, the Principality is a technologically advanced country as it has a fiber optic network covering 100% of the territory. For all these reasons, Andorra is more than an attractive country for anyone who wants to set up a holding company in Andorra.

Creating a holding company in Andorra is really interesting from a tax point of view for both the company and the shareholders. Indeed, the dividends perceived by an Andorran resident from an Andorran holding company are not submitted to the Personal Income Tax. For that reason, an Andorran resident can benefit many advantages in having shares in Andorran holding societies.
Do not hesitate to contact Andorra Solutions if you want our international tax planning experts to help you create or set up a holding company in Andorra.