Setting up or creating a company in Andorra provides several advantages: not only the tax conditions are excellent but also its living conditions are truly outstanding. These advantages are even greater for the international trading companies who wish to establish their business in Andorra. Andorra Solutions explains you the reasons for choosing Andorra to establish your international trading company.

An incomparable taxation system in Andorra

The lowest VAT rate in Europe

If you wish to set up or to create your international trading company in Andorra, be aware that the Principality has the lowest VAT rate in Europe, which is set at 4,5%. Additionally, Andorra is one of the few European countries that have a standard VAT rate in the single digits, which is much more advantageous than its two neighbors, France and Spain, where the rates are set at 20% and 21%.
The Andorran VAT rate can be reduced to 1% for certain goods or services, such as education, health, food or culture. This reduction becomes truly interesting if you are willing to establish your international trading company in Andorra.

An advantageous tax rate on companies

The tax rate on companies in Andorra is very low and it actually is one of the most competitive rates all over the world. The maximum tax rate on companies is set at 10% and it might be largely reduced depending on the type of the company.
For an international trading company in Andorra whose activity consists in selling and buying goods abroad, or for brokers and agents of the same activity, this tax can be reduced to a 2% rate if your company is selling goods abroad or if your products are merchandized from Andorra but they are not exported from or imported within the country’s boundaries. This reduction is applied on each international trading company in Andorra that has an office of at least 20m2 and has hired at least a part-time employee. Please note that as of May 2018 the international trade special reduction of 80% has been eliminated and the tax rate for international trading companies is the regular 10%.

Ideal living conditions to create a company in Andorra

A strategic location

Located in the middle of Europe, between France and Spain, the Principality of Andorra provides an ideal and strategic location at the foothills of the Pyrenees, which offers a natural and idyllic environment to its inhabitants. Additionally, Andorra is currently improving its aerial and ground communication and transportation infrastructures, in order to become even more accessible.

Multiple double tax agreements are signed with European neighbors or in the process.

A high level of living quality

In terms of technology, Andorra is one of the most innovative countries, providing a 100% fiber-optic-coverage. It also provides highly qualified educational and health systems. Besides its multiple leisure and sport infrastructures and several cultural activities, Andorra also has one of the lowest crime rates, which guaranties a high living quality to its inhabitants. All these conditions provide an ideal environment for everyone who is willing to create or set up an international trading company in Andorra.