Andorra is an attractive country for many companies thanks to its low tax policy and a high level of quality of live it offers. The Andorran taxation system aims at attracting all kind of companies and make them establish their residency in the Principality.
However, it is even more attractive for four types of companies in particular: international trading companies, financial investment and management companies, holding companies and companies involved in international management of intangibles. Andorra Solutions presents you all the tax benefits you might have if you decide to create or establish a company dealing with international managements of intangibles in Andorra.
Tax benefits in Andorra for companies with international management of intangibles activities
Companies involved in international management of intangibles are companies which main activities consist in managing the cession of rights on industrial or graphic patterns and designs, patents, brands, trademarks, copyrights, franchises, trade names and goodwill. When the company which is ceding the rights is established in Andorra, it can benefit a special policy with a tax reduction up to 80% on the tax base.
In other words, any company managing intangibles on an international level while being based in Andorra and which receives royalties can benefit a tax reduction of 80% on the corporate tax base. Finally, this kind of companies only have to pay a 2% tax on the benefits made during such transactions.
Tax benefits in Andorra for companies with international management of intangibles activities only granted on some conditions
Examples of activities qualifying for tax deductions
You can find below some cases of cession of intangibles which qualify for a tax deductions according to Andorran Business Confederation (Confederació Empresarial Andorrana):
– concessions, rights of use, cessions or licenses on industrial or graphic patterns and designs, brands, trademarks, trade names or other distinctive signs belonging to the company, as well as industrial property rights.
– concessions or licenses to use plans, formulations or processes, industrial, commercial or scientific information rights, including the use of industrial, commercial or scientific equipments.
– concessions, cessions or licenses on artistic or scientific copyrights, including audiovisual productions, programmes, applications and IT systems.
Qualifying conditions for corporate tax deductions
Several conditions are also required for companies created or established in Andorra and involved in international management of intangibles if they want to benefit corporate tax deductions:
– The company ceding the intangible assets must be an Andorran tax resident.
– The company ceding the rights must own an office of at least 20m2 exclusively dedicated to this activity, and have at least one person working part-time.
– The person or company assignee for the rights must be tax resident in another country than Andorra. It is also compulsory to use those rights out of Andorra.
This special policy is very attractive for all kind of companies from IT, pharmaceutical or scientific sectors and any type of industrial engineering belonging to the field of intellectual property.
Andorra can be an appealing country for all business projects involved in an intensive use of resources and know-how which are being transferred. Beside a favorable tax framework and a strategic location, the Andorran education system, its health care system and its high level of life also facilitate the implementation of research and development projects.
Do not hesitate to contact our experts if you need more information or for a feasibility study of your project.