The Main Legal Forms of Companies in Andorra
The Andorran legal framework is based on a clear and accessible system, designed to encourage economic activity in a transparent environment that complies with international standards. Several legal forms coexist, each suited to a specific entrepreneurial profile: small business, local trade, international company, investment structure, or high-growth company. Understanding these differences is essential for choosing the structure that best aligns with your business, budget, and development prospects. The Principality primarily offers two main forms—the SL (Societat Limitada) and the SA (Societat Limited)—as well as other more specialized categories.
The Andorran SL: the “Societat Limitada” (equivalent to the SARL)
The SL is the most common legal form in Andorra. Suitable for SMEs, sole traders, consultants, and service companies, it requires a moderate minimum share capital (usually around €3,000). This structure offers great flexibility, limited liability, and simplified management. It is perfectly suited to projects requiring a lean yet fully operational company: digital activities, consulting, e-commerce, international services, and technical professions. The SL (Société Limitée) is often the first choice for expatriates and executives wishing to establish themselves in the Principality with an agile and efficient structure.
The Andorran SA (Societat Anònima): the “Societat Anònima” (equivalent to a capitalized SA)
The SA is a structure adapted to large-scale projects: major companies, industries, family holdings, high-capital projects, or companies requiring significant investment. The minimum capital is higher (often around €60,000), and governance is more formalized: board of directors, complex articles of association, and enhanced obligations. This type of company is primarily used by international groups, companies seeking a strong presence in Andorra, or asset-holding structures requiring a more robust corporate status.
International Service Companies
Some Andorran companies primarily conduct their business outside the country, particularly in the digital, consulting, marketing, IT development, and international B2B services sectors. These companies use a limited liability company (SL) or a public limited company (SA) structure but operate with a global business model. They benefit from Andorra's strategic location, low tax rates, and the ability to work with clients located in the European Union while maintaining their headquarters in the Principality.
Commercial Companies and Retail Establishments
For brick-and-mortar businesses, restaurants, shops, or local services, Andorra offers a straightforward framework: establishing a commercial limited liability company (SL), obtaining an operating license, and registering at a suitable address. The country stands out for its low VAT (IGI), strong tourist appeal, and a steady flow of visitors, creating a favorable environment for retail and hospitality businesses.
Holding Companies and Asset Management Companies
Some companies are created to manage equity stakes, investments, or assets. Andorra allows the creation of companies focused on asset management, often in the form of a public limited company (SA), offering a stable legal framework for organizing long-term investments within an optimized tax environment.
These companies meet the needs of entrepreneurial families, private investors, or international groups seeking a stable jurisdiction in Europe.
Common Characteristics of All Andorran Companies
Regardless of the chosen legal form, Andorran companies operate within a harmonized regulatory framework designed to ensure transparency, legal certainty, and international compliance. The Principality has modernized its commercial and financial laws to align with OECD standards, include requirements for economic substance, and guarantee that each company has a real and operational presence in the country. These rules create a stable economic environment that attracts many entrepreneurs while avoiding the pitfalls associated with former offshore jurisdictions.
Limited Liability and Structured Share Capital
All Andorran companies benefit from the principle of limited liability to their contributions. This provides entrepreneurs with a secure framework in which personal assets remain separate from company assets. Capital requirements, while regulated, remain achievable depending on the chosen legal form.
Requirement to Maintain a Real Registered Office
Every company must have a physical registered office in Andorra. This requirement strengthens local roots and meets international standards of substance. Registered office space can be an office, a registered coworking space, or commercial premises, depending on the business activity.
Structured Governance and Simplified Administration
Companies must appoint at least one director, draft articles of association, maintain annual accounts, and comply with tax reporting requirements. The modern and digital Andorran administration facilitates these procedures.
Setting up a company in Andorra: how to choose the right structure?
Choosing the appropriate legal structure is a crucial step for successfully establishing a business in the Principality. The type of company impacts taxation, internal management, legal obligations, and the future development of the business. It also depends on the manager's objective: starting a business alone, attracting investors, opening a retail store, developing an international service, or structuring assets. Andorra offers a clear framework that allows you to select the structure best suited to your project.
For independent entrepreneurs and small teams: the SL (Société de Libérale)
Lightweight, flexible, and inexpensive to set up, the SL is the most common choice for service-based projects. It meets the needs of freelancers, startups, consultants, small tech companies, and independent businesses.
For large-scale projects or investors: the SA (Société Anonyme)
With its higher capital and governance structure adapted to complex projects, the SA is the preferred structure for companies wishing to accommodate multiple shareholders, manage significant investments, or operate as a regional or international entity.
For local and commercial activities
Local businesses and services adopt the SL but also require a suitable operating license. The simple regulatory framework allows for the opening of shops, restaurants, agencies, or workshops in a dynamic and attractive environment.
For international companies or holding companies
Entrepreneurs managing activities outside of Andorra, or investors seeking to structure their assets, opt for SLs or SAs dedicated to global activities. The requirements for economic substance ensure the legitimacy of these structures.
Conclusion: Andorran companies, a strategic tool for doing business in a stable and attractive environment
Setting up a company in Andorra offers a clear legal framework, moderate taxation, and a rapidly modernizing economic environment. From flexible limited companies (SL) and public limited companies (SA) geared towards ambitious projects, to commercial companies and internationally focused structures, the Principality offers a comprehensive range of options to support entrepreneurs, investors, and growing businesses. Choosing the right structure allows you to secure your project, optimize your operations, and establish a lasting presence in a country that fosters stability and innovation.
Epona, una empresa de gestió especialitzada a Andorra, us ajuda a avançar estratègicament! Les seves àrees d'especialització inclouen la constitució de societats, l'anàlisi fiscal, l'obertura de comptes bancaris, la comptabilitat, l'expatriació i la reubicació, la compra i el lloguer d'immobles, la compra de cotxes i molt més.