How long does it take from the decision to establish a company in Andorra until it becomes fully operational?
Creating a Company and Obtaining Residency in Andorra Setting up a company and obtaining residency in Andorra is a process that attracts many entrepreneurs and investors, given the tax advantages and high quality of life this small European country offers.
In this article, we will cover the steps involved, the estimated time each phase takes, and the key requirements from the beginning of the process to obtaining all necessary permits.
1. Initial Planning and Document Collection
Before starting the formal procedures, it’s essential to clearly understand the requirements and documentation needed to establish a company or apply for residency in Andorra. This phase includes collecting basic documents such as a passport and a criminal record certificate, and creating a basic business plan if setting up a company.
It’s common practice to engage local advisors to ease the process, as the Andorran system has particularities that should be thoroughly understood.
Estimated duration: 1 to 2 weeks.
2. Company Formation in Andorra
Once the documentation is collected, the next steps for creating the company begin. This involves obtaining approval for the company name through Andorra's Business Registry, which checks that the proposed company name is not already in use. This step is typically fast, though it may vary depending on the volume of applications.
After that, the constitutive documents, including the articles of incorporation and business plan, are submitted to a notary. Additionally, Andorra requires that companies in certain sectors submit a letter of intent outlining the business objectives and viability. This letter is reviewed by the Government of Andorra to ensure that the company will add value to the country.
Estimated duration for company formation: 2 to 4 weeks.
3. Obtaining Permits for Business Activity
Once the company is established, an administrative authorization is required to operate in Andorra. This permit is mandatory for all companies, regardless of sector. To obtain it, the company must meet certain requirements, such as having a physical office in Andorra and employing at least one Andorran resident.
This process includes registration in the Business Registry and fulfilling certain tax obligations. At this point, the company must also register its specific economic activity and comply with the sector's regulations, if applicable.
Estimated duration for permits: an additional 2 to 3 weeks.
4. Application for Active Residency
Andorra offers various types of residency, but active residency is the most common for entrepreneurs. This type of residency allows holders to live and work in Andorra while running their business. The requirements include a minimum investment in the country, which can take the form of company ownership, property acquisition, or deposits in local financial institutions. This investment demonstrates an economic commitment to the country.
The active residency application process includes undergoing a medical examination in Andorra and presenting proof of the investment made. Additionally, applicants must demonstrate financial stability and provide proof of no criminal record.
Estimated duration for the residency process: 1 to 2 months, including all exams and the wait for final approval.
5. Issuance of the Residency Card
Once the residency application is approved, the applicant receives a residency card, allowing them to live and officially work in Andorra. Issuing the card can take a few additional days, and once in hand, further steps are required, such as enrollment in Andorra’s social security system and opening local bank accounts.
Estimated time for card issuance: 1 week after residency approval.
Total Estimated Time
Adding all estimated times, the entire process can take between 3 to 5 months from the start until residency is fully obtained and the company is operational in Andorra.
This timeline may vary based on case complexity, the time of year, and the administrative workload of government agencies.
Establishing a company and obtaining residency in Andorra is a process requiring detailed planning and meeting specific requirements. Although the process may seem lengthy, the tax benefits, quality of life, and access to the European market make the time and resource investment worthwhile.
Professional guidance is highly recommended to expedite the process and ensure all requirements are met.
For more information, you can contact us here or via email at info@psf.ad.
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