With globalization and e-commerce trade across borders has been on the rise for many years. However with small merchants and retailers increasingly using e-commerce platforms such as Amazon for their commercial presence as well as fulfillment the needs have fundamentally changed over the past decade. Nowadays merchants may live and work from all over the world while their goods are flowing from the provider either directly through drop-shipping or through a fulfillment specialist like Amazon to the final client.
Drop shipping and fulfillment solutions are eliminating the requirements of warehouses and let merchants focus on their marketing, brand development and sales.
Setting up your ecommerce in Andorra requires careful planning especially when considering the VAT implications your business may have operating with clients in the EU. Our consultants will analyze your current business model to understand the revenue flows and supply chain you have set up with your clients. Based on this we can make proper decisions how to handle VAT in the EU and streamline your VAT declarations.
An ecommerce company in Andorra is set up just like any other entity. Compliance is more strict as your firm will receive payments from different countries and for goods that are not physically in your possession. Therefore we may expect increased compliance by local banks to understand your business model. Our team will accompany you throughout this process. Payment processing may be a concern depending on which PSP or bank you are working with. Given its size Andorra is not one of the preferred countries for payment processors, however alternative options exist to structure your payment flow. Local banks provide credit card solutions and acquiring services, however they may not be as competitive in merchant rates as neighboring jurisdictions.
Finally to activate your company you require a physical space which may be a small office or a warehouse. To some degree you may also operate from your home office however restrictions apply and conditions for a proper office have to be met.
To fully benefit from the advantages that Andorra has to offer and give proper substance to your business in Andorra we recommend to live and work in Andorra as a shareholder of your ecommerce company. Dividends from the company are exempted from taxes if you are a proper tax resident in Andorra.
Speak with our team today about the advantages of an e-commerce company in Andorra.
Requirements for the setup of an ecommerce company + active residency
- Present a business plan and forecast of estimated turnover
- Provide criminal / police records from the country of birth / current residence for all shareholders with over 10% participation
- 3000 EUR in capital for an SL / 60.000 EUR for an SA
- Pass compliance process with local banks (provide tax declarations, origin of funds etc.)
- Minimum two visits during the incorporation process (notary, bank introduction)
- Potentially VAT register your ecommerce in the EU for trading with the EU countries
- Have sufficient substance, explained here: https://www.youtube.com/watch?v=4iS5sQNFSsA
- Spend a minimum of 183 days per year in Andorra
- Participate with a minimum of 21% of the shares in the company
- Be actively part of the board / management of the company
- Leave a deposit of 15.000 EUR with the Andorran government
- Pay social security contributions of a minimum of 450 EUR per month
- Maintain a salary sufficiently high to cover your living expenses
- Have clean criminal / police records from your country of birth / current residence
Do you work as IT freelancer or YouTuber ? Do you work remotely for your clients ? Consider invoicing your clients or receiving your ad revenues living in Andorra.
Would you like to protect your assets while at the same time living in a country that provides you with optimal taxation and living standards?
Do you operate a company that is doing business internationally? Andorra may be suitable for your company’s operational base if you provide services over distance or trade goods as intermediary.