Factors to take into consideration before creating your company in Andorra
The Andorran Trade Register takes three types of companies into account:
- The “Societat Anonima” (SA), similar to a Public Limited Company model with a minimum capital required of €60,000. This capital will be divided into shares specified in the company’s Articles of Association. All the operations have to be registered by a notary.
- The “Societat Limitada” (SL), similar to Limited Liability Companies (LLC) -or Single-Member Companies if there is only one associate- are adapted to smaller businesses. LLCs are limited to 10 shareholders who have the priority to buy shares in the case of a capital increase or a transfer of shares to third parties. An initial €3,000 input is required.
Of course, in order to enjoy all the benefits available to you if you create a company in Andorra, it will have to be headquartered in the Principality.
Procedure to create a company in Andorra
Once you have selected the type of your company, you have to follow the steps detailed below in order to complete the creation of your company in Andorra.
1 – Application for reservation of a corporate name
It is essential to ask for a reservation of a corporate name (sol·licitud de reserva de denominació social in Catalan) to the Andorran administration. Your company’s name is no longer required to be in Catalan. In addition to this linguistic requirement, the corporate name must be related to the company’s activity in order to avoid any ambiguity. However, you can use a proper name as well as the name of another company if the latter is not established in Andorra and on the condition that you have an approval.
In order to register the corporate name of your company, you only have to send a piece of identification to the Andorran administration.
2 – Application for Company Incorporation
Once the name of your company has been approved, you must apply for an authorization from the Government to incorporate the company. You will need to provide the following documents :
- the authorization for the corporate name
- the draft Articles of Association of your company
- a detailed business plan showing the expected financial results
- a certificate from the bank testifying that the company’s bank account has been created in an Andorran bank and that the minimum capital required has been deposed
- a copy of an identification document for each associate
- an extract of the criminal record for each associate
N.B : In order to create a company in Andorra, you must have a clean criminal record
3 – Entry in the Trade Register
Following the Government’s approval to create your company, you have to consult a notary in order to for him to write a public document about your company, meaning that he will enter it in the Andorran Trade Register (Registre Mercantil). From that moment your company will have an independent legal personality.
4 – Application for a foreign investment approval
On June 21, 2012, the Andorran Government approved the 10/2012 Act authorizing Andorran societies to be fully owned by foreign capital. The Ministry of Economy of the Principality will approve the foreign investment after having analyzed all the submitted documents (business plan, amount of the capital contribution, Articles of Association of the company…).
A copy of an identification document and an extract of the criminal record of each associate are the only documents required to obtain this approval.
5 – Starting to operate with your company
Once all the steps have been successfully completed, you will be able to start your company officially. To do so, you need to provide the corporate name authorization and the lease contract of your company’s office to the municipality where it will be headquartered. You have to start your business within 6 months of the entry in the Trade Register.
Furthermore, you have to ask the tax administration for the register number, or Número de Registro Tributario in Spanish.
It takes about a month to finalize the entire procedure.
Do not hesitate to contact our tax advisors in order to begin the process for the creation of your company.