E-Commerce Andorra : an opportunity if properly structured
Andorra’s attractive tax regime seems to make it an interesting country to operate your e-commerce business from. The 10% corporate tax with exceptions to get to possibly 2% for international commerce together with a VAT scheme that has its maximum standard rate in 4.5% are difficult to beat within Europe.
Besides its tax advantages for international e-commerce it also offers a secure legal framework with multiple advantages to operate your company.
Fulfillment from Andorra
Located right between Spain and France Andorra is geographically well located to serve much of Europe. Andorra’s postal system is depending on both the French and Spanish postal services. Technically companies have the choice to use either service for their fulfillment needs. Be aware that Andorra does not form part of the EU and therefore goods must pass customs before entering the European Union. This may involve additional costs in terms of transport and customs handling. However Andorra’s taxation may make up for this depending on the type of product, associated VAT rate, destination country etc.
Fulfillment support is attractive when based in Andorra to serve the Southern European markets. Multilingual staff in French, Spanish and Catalan as well as reasonable salaries and very attractive social security charges if hiring directly may serve well your call center or general fulfillment support needs.
FBA Amazon for companies based in Andorra
Fulfillment by Amazon has recently been the number one choice for many online sellers and could also be a preferred choice of operation for an e-commerce operator. Andorra may have certain restrictions or complications when it comes through working with Amazon’s fulfillment solutions.
We may offer further advice on how Andorra can be part of your e-commerce operation using Amazon’s fulfillment.
Dropshipping is a great solution to avoid expensive fulfillment solutions through European warehouses or even importation to Andorra and consequent exportation. You may use your Andorran entity in a triangular invoicing scheme for delivery of goods to the final customer directly by your producer for example in Asia which corresponds to traditional dropshipping models. Platforms such as Ebay or Shopify solutions may offer an easy entry to the business. However careful considerations need to be made with regards to your supplier, delivery costs and VAT implications especially when dropshipping to the European Union.
Specific niches such as alcoholic beverages, nutritional additives or products that may require specific licenses and regulations may fit in well into your Andorra e-commerce model. Nevertheless specific regulations must be verified and respected as Andorra is eager to follow international compliance with these products.
Contact us to speak to a consultant with regards to the setup of your e-commerce through an Andorran entity.