Andorra LLC (S.L.)Formation of Holding Limited Liability Company in Andorra
Andorra offers numerous tax benefits, such as 2-10% corporate tax rate and special holding regime, low business and infrastructure costs. The company in Andorra allowed to have 100% foreign investment and company ownership. Andorra is a non-EU member with special agreements with the Schengen area with visa benefits for non-EU member directors and shareholders.
Andorra holding companies are used for management and holding of shares of international non-resident companies located outside of Andorra. Under the holding regime Andorra companies will benefit from tax exemption on dividends and capital gains.
Recurring Maintenance Fees as from the 2nd year - $ 4500
Please note: If applying for a corporate bank account you will need to order a full set of apostilled company documents if the account is opened outside of Andorra.
Facts & Info for Andorra LLC (S.L.)
ANDORRA HOLDING COMPANY (LIMITED LIABILITY COMPANY - S.L.)
The new corporate law, implemented in September 2012, regulates foreign participation in Andorran companies. Foreign nationals and companies can now open companies in Andorra with 100% foreign ownership in all business sectors; however the formation of a new Andorran company by non-residents must first be approved by the Ministry of the Economy.
In order for a company to be incorporated in Andorra, the company has to obtain a government permission granted by the Ministry of Economy. The company must furnish certain documents validated by an Andorran notary, including the Memorandum of Association and the list of founding shareholders. The Ministry of Economy will ensure that ownership of the company and the proposed objects of the company conform to Andorran laws, particularly with regard to foreign ownership. When permission to incorporate a company is given by the Ministry, a Public Deed is made by an Andorran notary. Then the company is entered to the Register of Commerce.
The application – which must be accompanied by an apostilled Criminal Record Certificate, not more than three months old from the time of issue, a list of all jurisdictions in which the applicant has ever resided, and indeed, his country of birth and/or nationality - is a reasoned presentation of a business plan, preferably with some meaningful three-year calculations of the expected turnover, profits and losses and filling in the standard application form in Catalan (of which Servissim can supply a government translation into English) giving details of the amount and form of the investment envisaged; details of possible employment and training of local people; social responsibility policies etc.
Holding companies in Andorra have the sole purpose of managing and owning shares in foreign companies.
There are two types of Limited Liability companies in Andorra. The Societat Limitadad (S.L.) is a company often used for holding purposes by foreign residents and must have a paid up share capital of at least EUR 3.000. The Societat Anonima (S.A.) is usually established for businesses, which enjoys a much higher turnover and must have a minimum paid up share capital of EUR 30.000.
A company name must be chosen and approved by local authorities. This procedure usually takes 2-5 working days. Names must end with S.L. It is advisable that the chosen name be at least Catalan-sounding.
MEMORANDUM AND ARTICLES OF ASSOCIATION
The Company’s Memorandum and Articles of Association ('estatuts' and 'rao social') must be presented to the Government ('Andorra Govern') in a petition ('suplica') for approval. Once the articles have the stamp of approval from Andorra Government, the minimum capital should be deposited in a bank and the parties must formally incorporate the company before a notary public.
A minimum of two shareholders are required. The shareholder can be a corporate body or a natural person of any nationality or residency. Details of shareholders are kept at the local registry. Bearer shares are not permitted.
The minimum capital requirement is EUR 3000. 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.
DIRECTORS AND COMPANY SECRETARY
A minimum of one director is required, who must be a natural person. The directors’ details must be kept at the registered office and this information should be available for public inspection. There is no requirement to appoint a local director.If the company is actively trading it is recommended to hire a local employee with power of attorney on a part time basis.
The second officer, who must be a natural person, will act as a Company Secretary and may be a non-resident of Andorra. The details of all officers must be retained at the registered office address and this information is available for public inspection.
Every company is required to have a registered office and address in Andorra.
Annual board meetings should be conducted in Andorra.
Usually it takes 1-3 months.
RECURRING MAINTENANCE FEES AS FROM 2ND YEAR
- Provision of Registered office.
- Payment of Government annual fees.
BASIC TAX PRINCIPLES
It should be noted that having a company does not entitle you per se either to trade or to work in Andorra. In order to trade, the company must obtain a trading license and register for IGI (similar to VAT). VAT is set at 4.5% and Corporation Tax on net profits is set at 10%. These rates are unlikely to change in the short or even medium term and there is an added incentive for companies in the software development, licensing and intellectual property fields to relocate here as they can apply to be granted a special 2% tax regime.
The Andorran companies are the best solution for holding of shares in foreign companies. All the dividends received by these Andorran holding companies are exempt from taxation in Andorra. Profits distributed by the holding companies to their shareholders, with a charge to the exempt income, are exempt from Corporation Tax.
Capital gains are treated as ordinary business income taxable at a rate of 10%, but capital gains derived from the transfer of qualifying participations are exempt. Capital gains derived from the transfer of immovable property are taxed at a progressive rate ranging between 1% and 15%, depending on the length of time the property has been held. No tax is levied if the property is held for more than 10 years.
Interest paid to a non-resident is tax exempt. The withholding tax on royalties paid to a nonresident is 5%.
ACCOUNTING AND AUDIT
The accounting must be kept in conformity with the current regulations in the Principality of Andorra, to make a chronological follow-up of the transactions and prepare the accounting documents and inventories.
Accounting documents: The accounting documents must be preserved, including the vouchers for the various entries, for a period of 6 years from the date of approval of the accounts for the relevant year.
In certain cases, depending on the annual business turnover, the number of employees and the total assets, the company must submit the financial statements to an audit. The financial statements must be filed obligatorily in the Companies Registry.
OUR SERVICES FOR THE COMPANY FORMATION IN ANDORRA INCLUDE:
- Name check and approval
- Company name reservation
- Foreign investment dossiers (due diligence procedure). The Andorran government screens each shareholder with over 10% ownership, checking their criminal records, CV and activity of the new company.
- Opening of a bank account for allocation of share capital
- Assistance with Notary Public
- Registration with Tax department and obtaining of tax number
- Company Registration in local municipality
- Provision of set of corporate documents
- Notary Public fee and government charges
- Provision of registered office for one year
- A standard set of original corporate documents:
- Articles of Constitution
- Tax Code
- Trade Register Receipt
- Rubber stamp
DOCUMENTS REQUIRED FOR THE COMPANY FORMATION
Please provide the following documents for all Directors, Shareholders, Beneficial Owners, Authorized Signatories:
- Apostilled copy of valid passport.
- Apostilled Clear Police Record Certificate issued by the official police authority in the country of residence. Police Clearance Certificate must be officially translated and certified into French, Spanish or Catalan language.
- Original or Certified copy of utility bill / bank statement (as verification of residential address, dated within 3 months).
- Original or certified copy of Banker’s reference letter (dated within 3 months).
- In cases where shareholders and/or directors are corporate bodies, full apostilled set of corporate documents and Certificate of Good Standing (for companies registered more than 1 year).
- Personal CV
IMPORTANT NOTE: LICENSABLE BUSINESS ACTIVITIES
If you conduct any activity without required license or authorization granted by a relevant authority in any jurisdiction, Agent Legal will not be able to assist you with the company formation or bank account opening related to such unlicensed activity.
Licensable activities include, but not limited to: provision of financial services involving trading/brokerage in foreign exchange, financial and commodity-based derivative instruments and other securities; offering investment advice to public; insurance and banking business; operation and administration of collective investment schemes and mutual funds; payment processing services; money exchange, money transmission or money brokering; asset management; safe custody services; gaming, gambling and lotteries.
Please contact us if you need our assistance in licensing of your financial, Forex brokerage or gambling company.
Shipping of corporate documents or banking kits to your destination requires an extra charge and will be automatically added to the invoice during checkout. Shipping costs for international courier services are set automatically and can vary from USD 75 to USD 95. The fees depend on the jurisdiction of your ordered company, the country where the bank is based as well as your destination country.