Quick answer
In 2026, most founders in Andorra choose between self-employment (empresari individual, no minimum capital, unlimited liability) and a limited company (SL, EUR 3,000 minimum capital). Larger projects use a public limited company (SA, EUR 60,000). Companies pay 10% corporate tax. Foreign owners need prior foreign investment authorisation.
Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad
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Check my business setup →You want to work from Andorra, or invest there, and you need a legal structure. The wrong choice can cost you liability protection, social security money or your Andorran tax position. After this guide, you will know which structure fits what you do and what it takes to set it up.
Andorra legal forms of business in 2026: the key figures
| Item | Rule in 2026 |
|---|---|
| Main company law | Law 20/2007 on public and private limited companies |
| Foreign investment | Prior authorisation from the Government under Law 10/2012 on foreign investment |
| Private limited company (SL) | EUR 3,000 minimum capital, fully paid up |
| Public limited company (SA) | EUR 60,000 minimum capital |
| Self-employed (empresari individual) | No minimum capital; requires active self-employed residence for foreigners |
| Corporate income tax | 10% standard rate |
| Personal income tax on self-employed profits | 0% up to EUR 24,000, 5% to EUR 40,000, 10% above |
| Indirect general tax (IGI) | 4.5% standard rate |
Is this guide for you?
Read on if you…
- plan to live in Andorra and run a freelance or consulting business;
- want to set up an Andorran company, alone or with partners;
- already have a company abroad and wonder whether to move it.
Probably not your case if you…
- are an employee of an Andorran company with no side business;
- only want to invest passively (see the practical guide to obtaining tax residency in Andorra for the passive route).
Which business structures exist in Andorra?
Andorra keeps it simple. Four structures cover almost every case.
| Self-employed (empresari individual) | Private limited company (SL) | Public limited company (SA) | Branch of a foreign company | |
|---|---|---|---|---|
| Liability | Unlimited – your personal assets are at risk | Limited to capital | Limited to capital | Parent company fully liable |
| Minimum capital | None | EUR 3,000 | EUR 60,000 | None, but parent capital applies |
| Setup cost (indicative) | EUR 1,000–3,000 | EUR 3,000–6,000 plus capital | EUR 5,000–10,000 plus capital | EUR 4,000–8,000 |
| Setup time | 4–8 weeks | 6–12 weeks | 8–12 weeks | 8–12 weeks |
| Tax on profits | IRPF: 0%/5%/10% | Corporate tax 10% | Corporate tax 10% | Corporate tax 10% on branch profits |
| Social security | Self-employed CASS contribution | Director or employee CASS if paid | Director or employee CASS if paid | CASS for local staff |
| Can a non-resident run it remotely? | No – you must be resident | Legally possible to own; management and substance must be in Andorra | Same as SL | Local management needed |
Self-employed: the freelancer's default
"Empresari individual" means you trade in your own name. No company, no capital, but no liability shield either. Foreigners need an active residence permit for self-employment, which comes with its own deposit. You register with the trade register, the tax department and CASS.
Honestly? For most solo freelancers earning under EUR 80,000, self-employment is simpler. Profits are taxed at the same 10% top rate as a company.
SL: the founder's default
The SL (societat limitada) is the go-to company. One shareholder is enough. Capital of EUR 3,000 must be paid in at incorporation. You sign the deed before an Andorran notary and register with the Companies Register.
SA: for larger projects
The SA (societat anònima) suits companies that need more capital, plan to raise funds or want freely transferable shares. It costs more to run and has stricter governance.
Branch: for existing foreign companies
A branch (sucursal) is an Andorran office of your foreign company. It is not a separate legal entity. Its Andorran profits pay 10% corporate tax.
What does the setup process look like?
- Reserve the company name with the Companies Register.
- Apply for foreign investment authorisation if any shareholder is not an Andorran resident with sufficient residence history.
- Open a bank account and deposit the share capital.
- Sign the articles of association before a notary.
- Register with the Companies Register and the trade register for your activity.
- Register for tax: corporate income tax and IGI.
- Register with CASS for any director or employee who is paid.
- Rent premises. Andorran companies need a real local address.
For a structured, hands-on setup, see Heavnn's business setup service.
How are Andorran companies and their owners taxed?
- Corporate income tax: 10% on profits. Rules and reliefs are in our guide to corporate income taxes in Andorra.
- Salary to yourself: taxed under IRPF (0%/5%/10%) plus CASS at 6.5% employee and 15.5% employer.
- Dividends to Andorran residents: exempt in the hands of the shareholder.
- IGI: 4.5% on most sales of goods and services in Andorra. Exports of services are often outside the scope.
Deductible costs are covered in our guide to business expenses in Andorra.
Can you run an Andorran company from abroad?
Here's the catch. Owning an Andorran company is open to foreigners after authorisation. Running it from abroad is risky.
Most countries apply a "place of effective management" rule: a company is resident where key decisions are actually taken. If you live in Spain and run your Andorran SL from Madrid, Spain can treat the company as Spanish-resident and tax its profits at 25%. Even short of that, regular work from abroad can create a permanent establishment (PE) – a taxable presence in that country.
Substance matters in Andorra too. Banks and authorities expect real premises, real activity and local decision-making. A letterbox company will struggle to open a bank account.
For comparison, see how legal forms of business in Spain and legal forms of business in Portugal stack up for the same activity.
Example – Clara, UX consultant
Clara, 38, earns EUR 120,000 a year from clients in Switzerland and the UK. She moves to Andorra and compares structures. As self-employed, she pays about EUR 7,800 IRPF on EUR 110,000 net profit, plus self-employed CASS. With an SL, profit is taxed at 10% corporate tax, and she pays herself a EUR 50,000 salary with employer and employee CASS. Dividends are exempt for her. The totals are close. She chooses an SL for liability protection and to hire later.
Clara's choice came down to liability and growth, not tax. Yours might too.
Get my business setup checked before I register in Andorra.
Check my business setup →Common mistakes (and what they cost)
- Trading before foreign investment authorisation → the company or activity can be refused, with fines on top.
- Running an Andorran SL from your former country → that country taxes the company's profits, often at 25% or more.
- Choosing self-employment for a risky activity → unlimited liability puts your personal assets at stake.
- No real premises or substance → bank account refused and tax residence of the company challenged.
- Forgetting IGI registration → back-charged IGI at 4.5% plus surcharges.
Frequently asked questions
What is the minimum capital for a company in Andorra?
A private limited company (SL) needs at least EUR 3,000, fully paid up when you incorporate. A public limited company (SA) needs at least EUR 60,000. Self-employed people (empresari individual) need no capital at all. The capital sits in an Andorran bank account and can be used for business expenses once the company is registered.
Can a foreigner own 100% of an Andorran company?
Yes. Since the 2012 foreign investment law, foreigners can own all of an Andorran company. You need prior authorisation from the Government before investing. The application describes the activity, the shareholders and the source of funds. Authorisation usually takes several weeks, so start it early in your move plan.
Do I need to live in Andorra to run a company there?
You can own an Andorran company without living there. But to manage it day-to-day without tax risks, management should be in Andorra. If you run it from another country, that country may tax the company. Self-employment, by contrast, requires you to hold an Andorran residence permit.
Which is better for a freelancer: self-employed or SL?
For most solo freelancers, self-employment is simpler and costs less to run. The top income tax rate is 10%, the same as corporate tax. An SL makes sense if you want limited liability, plan to hire or want to keep profits in the company. Compare social security costs carefully before deciding.
What is the corporate tax rate in Andorra in 2026?
The standard corporate income tax rate is 10%. Dividends paid by Andorran companies to Andorran-resident shareholders are exempt. Some reductions exist for specific activities and new investments, but the old preferential regimes for international trading and holding companies have been phased out to align with OECD and EU standards.
Related guides
- Corporate income taxes in Andorra
- Business expenses in Andorra
- Practical guide to obtaining tax residency in Andorra
- Specific taxes in Andorra: IGI and local taxes
- Cryptocurrency taxes in Andorra
- Andorra tax landscape overview
- All country tax guides
Sources
- Butlletí Oficial del Principat d'Andorra (BOPA) – Law 20/2007 on companies and Law 10/2012 on foreign investment
- Govern d'Andorra – official government portal
- Departament de Tributs i de Fronteres – Andorran tax authority
- Caixa Andorrana de Seguretat Social (CASS)
- OECD – Model Tax Convention, place of effective management and permanent establishment
This guide is general information, not personalised tax advice. See how we research and review.
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