A client asked me if being a society outside the country he could have a significant amount of business in Andorra. I told him what on paper, yes, but then reality has other plans and I explain why.
Any entity can provide services in Andorra, in that sense there is no problem. The issue is that it will be subject to the IRNR (tax for non-residents) with the costs that it detracts. You will have to pay the tax without a fixed base in the principality, pay 10% of the income (expenses can be deducted, but it is not as simple as in the case of corporation tax) and you will not have the advantages of having a company like an unique patrimony other than that of its owner (useful for car registrations and other related operations). In the end the branch has extremely limited capabilities to operate in the country and will become obsolete very fast.
In essence, having a company in Andorra gives us all the tools to operate correctly in the principality. If we work from the outside, no. We will pay the IRNR and with the CDI can be taxed part in other countries, but will be a more complex procedure. In the face of customs it can also be more complicated to work than if it were done effectively from within and in general the operation in many cases is going to be more cumbersome.
The biggest problem of the branch is that we do not take advantage of any of the possibilities offered by the principality. We can not take advantage of the investment we make here to create a saving, give a better service of whatever nature, try to obtain residence in the country ... Finally for Andorra we are no more than a foreigner who provides services in the country. This makes it very difficult to manage everything in an optimal way.