What taxes will you pay when relocating your company to Andorra?

Trasladar Tu Empresa A Andorra

There is a false myth that claims there are no taxes in Andorra, but this is not true. 

Like any other country, there are a series of taxes that need to be addressed, both on a personal and professional level. 

  • Personal Income Tax (IRPF): IRPF in Andorra is applied to individuals engaged in economic activities in the country. The tax rate ranges from 0% to 10%, depending on the taxpayer's income level.
  • Corporate Income Tax (IS): IS is applied to companies that are tax resident in Andorra. The rate is low, at only 10%. Additionally, there are various tax deductions and exemptions that can reduce this amount.
  • Value Added Tax (IGI): IGI in Andorra is applied to sales of goods and services, with a rate of 4.5%. There are also special IGI regimes, such as the simplified regime for small-sized businesses.

If you are reading this from Spain, you will see that the amount is lower compared to its counterparts in the country. 

What are the tax advantages of relocating a company to Andorra? 

In addition to the lower taxes we have already analyzed, relocating a company to Andorra can offer other tax advantages: 

Double taxation treaties and tax agreements: Andorra has tax agreements with several countries, which can prevent double taxation and reduce the tax burden on companies. Andorra also offers other tax advantages, such as exemptions from inheritance and gift taxes or exemptions from capital gains taxes. 

Requirements and procedures for relocating a company to Andorra 

To relocate a company to Andorra, certain legal and administrative requirements must be met, such as establishing the company in Andorra and obtaining permits and authorizations. 

There are also tax procedures to be followed, such as registration with the Department of Taxes and Customs and the request for tax identification numbers. 

Here are the detailed steps: 

  • Incorporation of a company in Andorra: To relocate a company to Andorra, it is necessary to establish a legal entity in the country. This may involve creating a new company or transferring the existing company to a new Andorran entity.
  • Company registration: The company must be registered with the Companies Registry of Andorra. This involves providing detailed information about the company, such as the name, structure, business activity, directors, and shareholders.
  • Minimum share capital: In Andorra, there is a minimum share capital requirement for certain types of companies. The amount varies depending on the legal entity type established.
  • Tax compliance: When relocating a company to Andorra, it is important to consider the tax obligations. Andorra offers an attractive tax regime, but local tax requirements, such as filing tax returns and paying taxes, still need to be fulfilled.
  • Local hiring: Depending on the circumstances, there may be requirements for hiring local employees.

Is it worth relocating a company to Andorra in 2023? 

The reality is that only you can decide that in your specific case. However, we wanted to gather some cases where businesses have thrived faster thanks to this decision: 

It is evident that each case is unique, but if more and more companies are taking this path every day, it must be for a reason, don't you think? 

Myths and truths about taxes in Andorra 

As mentioned at the beginning, Andorra has been the subject of many myths 

As we mentioned at the beginning, Andorra has been the subject of many myths and false rumors about taxes and the tax regime. 

For this reason, we want to clarify some, showing you the reality behind each one: 

  • Myth: Andorra is a tax haven.
  • Truth: Andorra has implemented significant reforms in recent years to comply with international tax transparency standards and fight tax evasion. That is why it has not been considered as such for a long time.
  • Myth: Companies have many tax benefits.
  • Truth: While it is true that Andorra has a favourable tax regime, companies and individuals must still pay taxes and fees.
  • Myth: Only large companies can benefit from Andorra's tax advantages.
  • Truth: Andorra's tax advantages are also available for small and medium-sized enterprises and highly qualified professionals.

Moving a company to Andorra can offer significant tax advantages, but it also requires meeting certain legal and tax requirements and procedures. 

It is important to take into account the taxes and fees payable when moving to Andorra, as well as the tax advantages available. 

With the right advice and professional help, moving a company to Andorra can be an attractive option for those looking for new opportunities and tax advantages.