ANDORRA PRICE LIST
For the SL incorporation including capital,
notary fees, governmental fees and our fees will cost 7900 Euro from which
4000 Euro capital of the company and will be deposited to the bank until
company is incorporated and licensed.
After company is licensed with all corporate papers the client can use this
capital for his/her business or any other needs.
Next Year
Corporate Tax 1.100 € aprox.
Local tax 600 € aprox.
Administrator 2.500 €
Accountancy & Management MIn. 200 €/month
We also providing bank introduction
Our other services include following:
Motor:
Vehicle registration (Resident plates) €165
Vehicle registration (Tourist plates) €200
Driving license application (New) €140
Driving license application (Renewal) €100
Visit Inspecció tècnica de vehicles €140
Administration and Social Security:
Residència application (New) €275
Residència application (Renewal) €200
Work permit application (New) €175
Work permit application (Renewal) €150
Sol.licituds €200
Collection of residence documents (Govern) €120
We don't usually recommend Andorra as a place to
incorporate for aliens !
Indeed, given all the information below, we should point out right
at the start that although most people imagine that having a company in
Andorra - where taxes are negligible - would be a good idea, most usually this
is not the case.
Anyone continually using an Andorran trading entity to deal with fixed service
clients in the EU for example, would pretty quickly find that the question of
withholding taxes would apply. In other words a taxable client in these
countries continually paying invoices for services to an Andorran enterprise
would be required by his taxman to deduct tax at source because quite
obviously Andorra has no double taxation treaties with any country.
Conversely, if you are primarily interested in trading in physical goods, then
there would be less tax scrutiny in the receiving country but Andorra has been
limited by the EU in its ability to export goods not manufactured within
Andorra. Since there is almost nothing manufactured here anyway, there remains
little scope.
There are however more possibilities for licensing deals, intellectual
property and software companies and other service businesses and, indeed, for
international triangular dealing in goods. But any structure should be
carefully thought out before committing to it. In essence Andorran trading
entities are, in the main, best for trading within Andorra. One should also
note that Andorra is pretty ferocious in controlling unauthorized trading. It
is not an offshore environment as many people imagine. It is most definitely
onshore - it just happens to be a non-tax jurisdiction. Anyone trying to
purport to trade from Andorra by means of a foreign trading enterprise and an
accommodation address here, will be quickly run out of town and no Andorran
bank will accept a foreign corporate account. Not even foreign trusts are recognized
here as qualified persons - mainly because there is no necessity for them
here, given that individuals pay no tax.
To sum up, Andorra offers significant advantages to individuals but is
not usually suitable for offshore trading structures.
Societat Limitada
Should you be new to Andorra and be contemplating a new business, there are
two main options, since it is unlikely any Andorran will involve himself with
you with a simple Registre de comerç name, which implies possible unlimited
liability.
The first, known predictably as an "S.L.", is the simplest form
of limited liability company in Andorra. The nominal capital is of 1 million
pessetes and the reserves should be nominally increased by 10% per annum,
although this provision is difficult to enforce except in the case of
liquidation, where the titular could be held responsible.
First of all a company name must be chosen. The name proposed may not now
have the words Internacional, Andorra, Principat, or other component that
would have the effect of giving the enterprise a supposedly official or
dubiously upmarket or old-established status. (Company logos are now similarly
restricted). Acronyms are often given in addition, such as for example: CISA -
meaning Constructora Immobiliària S.A. Once both name and acronym have been
checked for availability with the central register of business names, one
seeks permission from Andorra Govern by means of a súplica for incorporation.
The estatuts (articles of association) and raó social (aims of the
company) are normally written by a lawyer, who may or may not be the proposed
titular, and submitted at the same time to the government for approval. This
approval is not necessarily a formality and the articles can either be sent
back for revision or refused completely. There are relatively few problems
with this stage in the case of pure holding (i.e. non-trading) companies set
up, say, to hold Andorran property. However, with a proposed company where it
is obvious that the non-Andorran party is intending to operate the company and
is a resident of very recent date, permission would be more difficult. As a
general rule the authorities like to know with whom they are dealing, and a
lack of proficiency in the language and a reasonable grounding in the customs
of Andorra would be black marks. In other words if a sole non-Andorran party
had not even held a work permit before, it is most unlikely that a company
would be authorised quickly. There are no formal enquiries made that one might
be aware of, but as always in Andorra when these questions arise, one can be
sure that they are made, and diligently so.
Once the articles have the stamp of approval from Andorra Govern, the
minimum capital should be deposited in a bank and the parties must formally
incorporate the company before a notary. At this time a suitable fiduciary
contract must be agreed and signed, as must a full power of attorney in favour
of the non-Andorran party to allow him to act for, and in the name of, the
company in all daily matters. Once this has been achieved, an application for
the opening of the business must be made to the relevant Comú, who will check
the proposed trading premises and charge their local taxes. The application is
accompanied by a certificate from the landlord. Once the Comú has approved
everything, a final súplica must be made to Andorra Govern for the public
opening of the enterprise. The whole process can take anything from three or
four months to at least a year, cost a minimum of 400.000 ptes, depend on many
factors, and we strongly advise to consult with us, at least in the initial phases, as to the details. Consultancy fees are chargeable but will prove
to be money very well spent. The current tax on an S.L. is 100.000 ptes per
annum. Where the company trades in Andorra as opposed to just being a holding
company, the company must still, like an individual apply for the Registre de
comerç and pay the applicable annual tax.
Societat Anònima
This is for substantial business investments and multiple shareholder
situations. The minimum capital requirement is 5 million ptes. An
"S.A." obviously has a bit more class than its little brother the
"S.L.", but many well-known and highly profitable enterprises have
never upgraded. Basically the same processes apply as for an "S.L."
but with even stiffer conditions. The current tax on an S.A. is 150.000 ptes
per annum. Again, where the company trades in Andorra as opposed to just being
a holding company, the company must still, like an individual apply for the
Registre de comerç and pay the applicable annual tax.
General Trading
Once registered and incorporated and in possession of the Registre de
comerç permission, a business may trade in any terms for which it is
authorised. With limited companies, there is a requirement for trading
accounts to be maintained but there is no formula to which one should adhere.
In other words as long as one behaves, no rules apply. There is no necessity
for accountants or other high priced advisers and there are no taxes to pay
currently except as previously described.
The only formal requirement that impinges on normal trading is registration
at Caixa Andorrana de Seguretat Social - the C.A.S.S. as it is known - as an
employer. All new work permits applied for are chargeable at 25.000 pessetes
each and then the employer must pay 13% of the employee's salary as an
employers' contribution every month. The real rate of the contribution is set
at 18% of salary but 5% is nominally payable by the employee. It is quite
normal for companies in Andorra to pay the employee's contribution as well,
but this is not mandatory; indeed it is not strictly legal to do so. Employers
should note that there is a minimum wage in force in Andorra. (See our help
Sheet on Work Permits and on Caixa Andorrana de Seguretat Social).
Once these minor matters are attended to, trading in Andorra is about as
easy as it could possibly be. Ethics amount to behaving yourself carefully,
not dealing in drugs or white slaving and whether you are able to pay your
bills and conduct a proper business, to which end it is advisable to make sure
that sufficient funds are available to cover all trading difficulties in the
first few years. Nothing gets around quicker in Andorra than a rumour that a
certain company is unable to pay on demand, and we strongly advise not
counting on any more than an absolute maximum of 30 days credit from trade
accounts. Better to pay cash and take whatever discounts are offered. It is to
be noted that there is no sanction in law against disregarding other
countries' fiscal or legal arrangements and re-invoicing is commonplace for
international trading, although not to be considered for the physical
importing of goods into Andorra. The golden rule is to use one's common-sense,
and as long as one does not indulge in any business contrary to the very basic
set of crimes in Andorra (Codi Penal) all should be well. Of particular
interest to companies in this respect, are the stiff penalties provided in law
against such things as fraud, and abuse of confidence by directors or
employees. Telling any third party about any matter to do with a company or
its private dealings with clients is prohibited, and even in the case of very
serious suspected crimes it is exceedingly difficult for any authority in
Andorra to openly investigate any details of a business. In the case of
suspicion of crime the police are of course able to apply to close or suspend
a business immediately and felons are normally persuaded surprisingly easily
to "volunteer" information.
The other point to note is that it is inadvisable to rely too much on
suppliers' (or customers') accounting systems. Since one is automatically
expected to pay creditors on demand, old school Andorrans, whose accounts may
well be in their back pocket, tend to be a bit haphazard about charging. They
are quite likely to forget to send a bill for a few months, or have better
things to do like plant tobacco. Then suddenly they will surface and send a
debit note or lletre de canvi for immediate settlement to your bank for a
whole slew of bills for the last 3 months and eighteen days which may bear no
relation to your own precise monthly summaries and lead to total confusion,
not to mention cash-flow trauma.
Again it should be noted that approval for a limited company incorporation
does not imply the right of any person involved to actually work in Andorra
without the necessary permit from the Oficina d'Immigració. It is forbidden
to trade in Andorra in any manner, which could be taken to be acting as an
unregistered Andorran "branch" of some foreign-registered
enterprise. Those who try to set up mail drops and invent fictitious Andorran
trading names, or otherwise abuse our commercial "paradise", quickly
find that the mail does not arrive and the police ensure that the perpetrator
departs (preferably after a spell in our thoroughly un-recommendable local
jail). Acting as a consultant outside Andorra, whilst formally being a
resident here, is perfectly acceptable - indeed encouraged, though we do not
advise that mail should be addressed other than in the consultant's own name,
to avoid any suspicion of illegality.
What the future holds on the company front?
Taxes
There is no question in anyone's mind at this stage of any sort of profits
tax. The government is currently making noises about a sort of VAT but in
order to set up such a scheme, legislation would have to be passed throwing
out all the rules on non-disclosure, privacy etc and setting up a formal tax
office which does not currently exist. It would also have to allow for a long
period of training for accounting staff. It would be brave man who could
engineer such legislation through the Consell-General, our parliament. This
does not mean to say that Andorra Govern, like other governments, is not
anxious to increase its income and there is no doubt in the minds of serious
observers that the current very small fixed taxes on businesses will increase,
possibly using the number of employees as a base calculation figure.
Foreign Companies
There have been several indications of government interest in relaxing the
majority-Andorran rules. It would do away with the charging of prestanom fees,
and all the ducking and diving that goes on, and would leave the government
free to collect similar sums themselves instead of the fees disappearing into
private pockets. There are, however, extremely wealthy and entrenched vested
interests against allowing foreigners to control a bigger slice of the local
economy. The present government is certainly working on proposals to modify
the mercantile law to allow a separate register of foreign-controlled
companies (known temporarily as Class C companies), but these, unlike
"Andorran" companies, would pay a percentage profits tax and be
bound to declare their accounts. This register is likely to be for those
businesses which are considered vital to the national interest and possibly
ordinary commercial situations, but with the main trading being done outside
the Principality. Class C companies are also envisaged for covering
international intellectual property and consultancy situations. The idea is
that such companies could benefit from partial double-taxation agreements, but
given the competition from other offshore and onshore jurisdictions we cannot,
at this stage, see them being very popular. In addition the Andorran
government has patently failed to interest any country as yet in to signing a
double taxation agreement.
Formation Costs:
- Andorra S.L. coming complete with a standard Authorized Share Capital of
ESB1,000,000.
- Provision of domiciliary services to include provision of the Registered
Office and Agent services, one Nominee Corporate Director, all outgoing
charges and out-of pocket expenses (i.e. fax, courier charges, etc.).
- Prepared General Power of Attorney with minutes and resolution which will
appoint you to be the lawful Representative Agent of the Company and which
will allow you to act for the Company in all matters, including opening and
operating bank accounts.
Timescale: 6-8 weeks but it does take approximately 1 week more for
documents to arrive from Andorra.
- Incorporation & 1st Year Maintenance Fees: ESB1,000,000 (all
inclusive fees) -> Annual maintenance after first year: ESB300,000-
Optional services:
- We can open a corporate bank account
at any Andorran bank. Our fees for attending to the account opening procedures
would be US$1,000.
- Mailing Address and mail forwarding service from Andorra: US$400 + US$100
deposit to cover cost of postage.
General Info about Andorra:
With a surface of about 460 KM2, and located in
the Pyrenees, between Spain and France, Andorra has preserved its neutrality and its
identity through more than 700 years with an unique record of diplomatic non-involvement
in European affairs.
The elected local government consisting of Cap de
Govern (President) and his ministers (28) directs government from la Casa de la Vall (the
Houses of Parliament). In 1993, Andorra created its own constitution and is now a member
of the United Nations.
The French and Spanish governments, the two
co-princepts retain responsibility over military defence and extreme foreign affairs.
The Principality is a no tax jurisdiction with no
direct taxation being levied on income, capital or corporations. Wealth and
inheritance taxes do not exist.
The population of Andorra is 60,000 from which
20,000 are native Andorran. The official language is Catalan, but Spanish and French are
widely spoken and accepted.
The economy of Andorra is split between farming,
banking, financial services and tourism, with over 12 million tourists visiting the
country every year.
The Principality is an ideal location in which to
site management and control of offshore companies. Banks offer a wide range of
professional, discreet and confidential services with banking secrecy being upheld by law.
Andorran companies can be established for local trade, asset and investment holding and
cross-border commerce.
There are two types of Andorran companies, both of
which enjoy limited liability.
The Societat Limitadad (S.L.) is a company often
used for local trading and must have a paid up share capital of at least ESP1,000,000
(Spanish Pesetas).
The Societat Anonima (S.A.) is usually established
for businesses which enjoy a much higher turnover and must have a minimum paid up share
capital of ESP5,000,000.
THE ANDORRAN SOCIETAT LIMITADAD (S.L.)
TAXATION
There are no corporate taxes whatsoever.
SHAREHOLDERS
A minimum of two shareholders are required
and at least one shareholder must be of Andorran nationality owning a minimum of 67% of
the company’s share capital. Non-Andorrans and non-residents can only own 33% of the
share capital. Details of shareholders are kept at the local registry. An offshore company
can be used to own 33% of the share capital. It is possible to arrange for an
Andorran citizen to act in a nominee capacity for the ultimate owner of the company.
COMPANY OFFICERS
The share capital must be fully paid up in advance
of incorporation. This amount must be deposited with an Andorran bank in a
designated company incorporation type account. The bank must then release a special
certificate, addressed to the designated notary, responsible for concluding incorporation
formalities.
CAPITALISATION
The share capital must be fully paid up in advance
of incorporation. This amount must be deposited with an Andorran bank in a
designated company incorporation type account. The bank must then release a special
certificate, addressed to the designated notary, responsible for concluding incorporation
formalities.
ANNUAL REPORTING
Accounting information and books must be
maintained at the company’s registered office, but these need not be audited or filed
with local authorities.
TIMESCALE
A company name check can take up to five working
days and ready-made companies do not exist. After the share capital has been deposited in
the manner mentioned above, it will take up to two months to incorporate the company.
RESTRICTIONS ON NAME AND ACTIVITY
Names must end with S.L. It is advisable that the
chosen name be at least Catalan-sounding.
ORDER
FIND/BUY RELATED
BOOKS!
Whilst
every effort has been made to ensure that the details contained herein are correct and
up-to-date, it does not constitute legal or other professional advice. We do not accept
any responsibility, legal or otherwise, for any errors or omissions.
Please go to our Uses of offshore Companies Page where you will
find interesting information on the benefits of using offshore companies and trusts for
business and personal use, links to information on other locations and details of our
products and services.
