Setting up a company in Andorra: 5 steps to secure, develop and transfer your assets
Create, develop and pass on: three verbs that sum up the life of every entrepreneur.
After years of effort, risk-taking and success, there comes a time when an essential question arises: how can we preserve and build on what we've built?
For many managers and investors from France, Belgium, Spain and Luxembourg, the answer may lie in setting up a company in Andorra.
This small principality nestled in the heart of the Pyrenees, long perceived as a discreet enclave, has evolved into a modern, transparent and tax-efficient stronghold.
Far from being a cliché, Andorra is not a tax haven, but an area of rational taxation: corporate income tax capped at 10%, no inheritance or gift tax, neutral wealth tax, solid banking environment, legal stability.
These are just some of the reasons that attract a clientele of wealthy entrepreneurs, international investors and high-net-worth families.
If you're thinking of securing, passing on or simply enjoying your assets with complete peace of mind, setting up a company in Andorra is an option to consider right now.
To benefit from tailor-made support and cross-border expertise, contact ENGAGE and book a strategic meeting with a Franco-Andorran tax consultant.
Andorra: a tax choice and a wealth management tool
Setting up an Andorran company is more than just a tax solution: it's also a powerful asset-building tool, a lever for succession planning, and a gateway to a secure tax residence.
This choice, increasingly favored by experienced business leaders, enables them to combine economic performance with quality of life, in an exceptional natural setting just a few hours' drive from Toulouse, Barcelona or Bordeaux.
That's what we're going to explore in this strategic guide.
We will see:
- WhyAndorra has become a must-see destination for entrepreneurs,
- What arethe concrete advantages of an Andorran company,
- How the creation process works (from idea to official registration),
- And how to integrate this structure into an overall asset strategy.
1. Why consider setting up a company in Andorra today?
The world of entrepreneurship and wealth management is undergoing a profound transformation.
In countries like France, Belgium and Spain, taxation has become both heavier and more unpredictable.
Corporate income tax remains high, dividends are taxed twice, the IFI weighs heavily on real estate assets, inheritance tax can reach 45%, and successive reforms maintain a climate of chronic instability.
For an entrepreneur, an investor or a family with significant assets, the question is no longer just "how much" tax to pay, but how much visibility to have on the future.
And yet, in a world where taxation changes according to political alternations, and where the authorities are equipping themselves with increasingly intrusive control tools (automatic exchanges of banking information, datamining, European cooperation), uncertainty has become the norm.
Andorra, on the other hand, has chosen a radically different philosophy.
Since 2010, the Principality has aligned itself with OECD and European Union standards in terms of transparency, while maintaining a simple, stable and competitive tax system.
The result: a safe country, recognized by the international community, which attracts more and more investors every year.
2.1. Confiscatory French taxation: the contrast that drives people to exile
Let's take a concrete example.
A French executive sells his company for a capital gain of 10 million euros.
Between capital gains tax, social security contributions, the IFI and future inheritance tax, he could see up to 60% of this capital disappear.
In other words, out of 10 million euros earned by a lifetime's work, barely 4 million may be passed on to the next generation.
In Andorra, the same manager, by structuring his situation correctly, can reduce this tax friction to less than 5%.
The difference is staggering.
2.2. Andorra, more than just a tax system: legal and political stability
Taxation is not the only attraction:
- Many investors are looking for a haven of stability.
- Andorra, a stable, independent parliamentary co-principality since 1278, offers a coherent legal framework, solid institutions and a safe environment.
- No chronic governmental instability, no improvised fiscal pressure, no explosive social climate.
Setting up a company in Andorra is therefore part of a long-term approach to wealth management: protecting your assets in a respected, long-term and predictable jurisdiction.
2.3. Geographical proximity, cultural integration
Unlike other more distant tax destinations (Dubai, Singapore, the Caribbean), Andorra has a unique advantage: its immediate proximity to France and Spain.
In just a few hours' drive, an entrepreneur can join his business in France or Catalonia, while benefiting from Andorran tax residency.
What's more, the French-speaking community has a strong presence here, making it easier for families to integrate.
2.4. Setting up an Andorra company: a wealth strategy, not a tax exile
One essential point needs to be stressed: setting up a company in Andorra does not mean shirking your tax obligations, but rather organizing your assets in a compliant and intelligent way.
Andorra has signed double taxation treaties with its main neighbors (France, Spain, Belgium, Luxembourg...), thus avoiding conflicts of residence and securing its position vis-à-vis its country of origin.
This means that a French entrepreneur who sets up a company in Andorra, settles there and complies with tax residency requirements, will not be considered a "tax exile", but a resident of another country, benefiting from a legal and recognized regime.
This is precisely what high net worth individuals are looking for: secure, legal, long-term optimization.
No artificial arrangements, no gray areas, but a coherent strategy that integrates taxation, transmission and quality of life.
2. The tax and legal advantages of setting up a company in Andorra
Setting up a company in Andorra is more than just an administrative process.
It's a strategic choice that redefines an entrepreneur's asset and career path.
The tax advantage is of course the best-known factor, but it's only part of the equation.
Legal certainty, institutional stability, regulatory flexibility and even quality of life make Andorra a unique territory in Europe for structuring and developing an estate.
2.1. A simple, clear and competitive tax system
Corporate income tax capped at 10%.
In France, corporate income tax is set at 25% (excluding specific surtaxes).
In Belgium, the figure is around 25%.
In Spain, the figure is also 25%, with regional regimes sometimes more complex.
Andorra's nominal corporate income tax (CIT) rate is capped at 10%, making it one of the lowest in Europe.
And this is not a "call" rate reserved for certain activities: it applies to all companies, whether operating or holding.
In addition, there is an essential feature: certain incomes can benefit from total exemptions.
For example:
- Dividends distributed by an Andorran company to an Andorran tax resident are exempt from income tax.
- Dividends received from a foreign subsidiary may be exempt in Andorra under certain conditions.
- Certain capital gains on corporate securities are taxed at 0%.
The result: an executive can optimize his tax situation by housing his assets in an Andorran holding company and organizing the distribution of income in a tax-neutral way.
2.2. Light personal taxation
Beyond the company, personal income tax (IRPF) is also capped at 10%, with numerous allowances:
- The first €24,000 of income is exempt,
- The next 16,000 are taxed at 5%,
- Andorran dividends are exempt,
- No wealth tax, no inheritance tax, no gift tax.
In other words, a rare combination in Europe: low taxes + simplicity + stability.
2.3. No double taxation :
Thanks to tax treaties signed with France, Spain, Belgium, Luxembourg and other countries, Andorran residents can avoid double taxation.
In practical terms, a dividend paid by a French company to an Andorran holding company is subject to a reduced withholding tax of 5% (instead of 12.8% or 30%), and can then be redistributed tax-free in Andorra.
2.4. Rare legal and institutional stability
Andorra's tax system would be nothing without the country's stability.
Unlike France, where each political change leads to tax reforms, Andorra has adopted a logic of stability and clarity.
Andorra's legal system is modern, in line with European standards, but still protective of entrepreneurs.
Corporate governance rules are simple, business law is clear, and bureaucratic constraints are limited.
This stability is particularly attractive to foreign investors, weary of the constant reforms in their home countries.
2.5. Competitive payroll taxes
Setting up a company in Andorra also means benefiting from lower labor costs.
In France, social security contributions represent over 40% of gross salary. In Belgium, they can reach 50%.
In Andorra, the overall rate (employer + employee) is around 22%, for comprehensive coverage (health, retirement, disability, maternity).
This allows :
- Hire at lower cost,
- Remunerate employees under better conditions,
- And to preserve the company's profitability.
2.6. Flexibility in asset structuring
The Andorran company is not just a business tool.
It can also be used as a holding company, enabling :
- Accommodating participations,
- Manage an investment portfolio,
- Centralize real estate or financial income,
- Preparing for family succession.
In the absence of estate or inheritance tax, an Andorran company can become the heart of a trans-generational strategy, enabling wealth to be passed on in a totally tax-free environment.
2.7. A solid, modern banking environment
The Andorran banking system, long renowned for its discretion, has adapted to international standards (OECD, CRS, FATF).
Today, it is recognized for its solidity, modernity and ability to manage demanding international customers.
Setting up a company in Andorra involves opening a local bank account. This step is sometimes perceived as complex (due to bank "due diligence"), but it guarantees the security and conformity of financial flows.
The three major Andorran banks (Creand, Andbank, MoraBanc) offer top-of-the-range services:
- Multi-currency accounts,
- Wealth management,
- International financial products,
- High-performance digital services.
2.8. Quality of life, safety and the environment
We sometimes forget it, but for an entrepreneur, quality of life is a strategic factor.
Andorra combines :
- An exceptional natural setting (ski resorts, hiking, fresh air),
- Total security (crime rate among the lowest in Europe),
- An active French-speaking community,
- A stable tax system that allows you to live without constant tax stress.
Setting up a company in Andorra therefore also means creating the conditions for a new life, where assets, work and family find a new balance.
3. Available corporate forms: SL vs SA
Setting up a company in Andorra means choosing the right legal form for your project.
Unlike some jurisdictions, where the range is vast and sometimes confusing, Andorra has opted for simplicity: two major structures dominate the commercial company landscape:
- The Limited Company (SL)
- Société Anonyme (SA)
Each of these forms corresponds to different objectives, whether in terms of capital, governance, responsibility or asset management.
3.1. The Limited Company (SL): flexibility and efficiency
The Andorran Limited Company (Societat Limitada, SL) is the equivalent of the SARL in France.
It accounts for more than 95% of company start-ups in Andorra, as it combines :
- Flexible operation,
- Reduced share capital,
- Adaptable to most activities.
Minimum share capital for a Limited Company (SL)
The minimum capital required for an SL is €3,000, to be deposited with an Andorran bank at the time of incorporation.
This capital can be contributed in cash (payment into the account) or in kind (contribution of assets, subject to conditions).
Number and status of partners in a Limited Company (SL)
The SL may be formed by a single person (SLU - société limitée unipersonnelle), or by several partners, with no maximum limit.
The partners may be natural or legal persons, resident or not in Andorra, Andorran or of another nationality. But it doesn't matter!
Governance of a Limited Company (SL)
Governance is flexible:
- Sole director,
- Joint and several directors,
- Board of Directors (optional, reserved for larger structures).
This flexibility enables individual entrepreneurs and families alike to organize the management of their company as they see fit.
Frequently used :
- Small and medium-sized companies,
- Freelancers, consultants and self-employed professionals,
- Asset holding companies,
- Real estate structures (ownership of a property or portfolio of properties).
In short, the SL is the ideal tool for the majority of entrepreneurs and investors wishing to set up a company in Andorra.
3.2. The Société Anonyme (SA): prestige and power
The Andorran Société Anonyme (Societat Anònima, SA) is the equivalent of the SA in France.
It is designed for larger projects, requiring more capital and more formalized governance.
Minimum share capital for a Société Anonyme (SA)
The minimum capital requirement is €60,000, 100% of which must be paid up on incorporation.
This high threshold makes it the tool of choice for larger companies.
Number and status of partners in a Société Anonyme (SA)
As with the SL, an SA can be formed by a single person (SAU - société limitée unipersonnelle), or by several partners, with no maximum limit.
The partner or partners may be natural or legal persons, resident or not in Andorra, Andorran or of another nationality. Here too, it doesn't matter!
Governance of a Société Anonyme (SA)
The rules of governance are the same as for an SL.
Frequently used :
- Large commercial and industrial companies,
- International groups looking to set up a subsidiary in Andorra,
- Large-scale investment holding companies,
- Structures requiring greater international credibility.
In practice, the SA remains in the minority in Andorra, as most entrepreneurs find the SL a sufficient framework. However, for investors seeking a stronger status, the SA may be a strategic choice.
3.3. What SL and SA have in common
Despite their differences, the two shapes have several points in common:
- Limited liability of partners/shareholders up to the amount of their contributions,
- Statutes must be drawn up in Catalan,
- Incorporation formalities supervised by a notary,
- Annual filing of financial statements with the Registre des Sociétés,
- Identical taxation (corporate income tax capped at 10%).
In other words, whether you choose an SL or a SA, you'll benefit from the same advantageous tax and legal environment.
3.4. How to choose between SL and SA?
The choice depends on three main factors:
- The amount of capital available: if you're planning a project with limited initial funds, the SL is more suitable.
- Credibility: a public limited company inspires greater prestige, which is useful for certain international investors.
- The size of the project: for a family business or consulting activity, the SL is more than sufficient. For a multinational or an investment fund, the SA is more appropriate.
4. The process of setting up a company in Andorra: a step-by-step guide
Setting up a company in Andorra is a perfectly straightforward process, but it does require compliance with strict formalities. The Andorran government imposes a number of authorizations, particularly for foreign investors, to ensure legal compliance and financial transparency.
In practice, the process takes an average of 10 to 14 weeks, depending on the complexity of the project and the responsiveness of the parties involved (banks, notaries, administration).
Here is the complete route:
4.1 Obtaining an AIN (Administrative Identification Number)
The first essential step is for any individual or legal entity wishing to take administrative action in Andorra to have an NIA.
This is the equivalent of the "tax number" or "administrative identifier".
- Delivery time: 1 to 2 working days.
- Documents required: copy of passport or identity card, proof of address.
This is the key to all subsequent steps.
4.2 Reserving the company name
The company name must then be registered with the Registre des Sociétés.
- The name must be specific (generic names are rejected).
- Terms referring to the Andorran state ("Andorra", "Principat", etc.) are prohibited unless special dispensation is granted.
- The application includes a definition of the corporate purpose.
Lead time: about 2 weeks for validation.
Tip: Engage advises you to propose several name variants to avoid rejection, which would lengthen the deadline.
4.3. Obtaining foreign investment authorization
This is a crucial step for any non-resident.
Andorra regulates foreign investment and requires prior authorization to set up a company.
The file must contain :
- Valid passport or identity card,
- Recent criminal record,
- Project description (activity, corporate purpose),
- Proof of source of funds,
- Summary business plan (in some cases).
Lead time: approx. 3 weeks.
Without this authorization, it is impossible to set up an Andorran company.
4.4 Opening a bank account and paying up the share capital
Once authorization has been obtained, the next step is to open a business bank account in Andorra.
This is a sensitive stage, as the banks apply strict due diligence:
- Verification of customer and beneficial owner identity,
- Analysis of source of funds,
- Consistency between profile and expected flows.
Once the account has been opened, the founder must deposit the intended share capital:
- a minimum of €3,000 for an SL,
- a minimum of €60,000 for a public limited company.
The bank will then issue a certificate of deposit, which is essential for incorporation before a notary.
Delay: 1 to 2 weeks (sometimes longer in the case of incomplete applications).
4.5. Drafting the bylaws
The articles of association must be drafted in Catalan and comply with Andorran law.
In particular, they specify:
- Company name,
- Corporate purpose,
- Head office,
- Share capital,
- Rules of governance (directors, board, powers),
- Conditions for transferring shares.
This is a fundamental legal act: a poor corporate purpose or inadequate governance can stall business or reduce tax opportunities.
4.6. Signature of the deed before a notary
The founder (or his representative) signs the deed of incorporation before an Andorran notary.
Required:
- Reservation of the company name,
- Certificate of deposit of share capital,
- The draft bylaws,
- Foreign investment authorization.
The notary draws up the deed and sends it to the Registre des Sociétés.
Lead time: about 1 week to arrange an appointment and finalize the signature.
4.7. Company registration
The notarial deed must be entered in the Companies Register, which gives the company legal existence.
Without this registration, the company does not legally exist, even if the deed has been signed.
Lead time: approx. 2 weeks.
At this stage, the company is officially incorporated.
4.8. Obtaining the TRN (Tributary Register Number)
The company must register with the tax authorities to obtain its NRT, equivalent to the French SIRET.
This number must appear on all invoices and official company documents.
Lead time: about 1 week.
4.9. Business license (if operational)
To operate a business, the company must obtain a trade license issued by the government and the "Comú" (town hall of the parish where the head office is located).
This authorization requires :
- Identified commercial premises (no simple domiciliation),
- A registered trade name,
- Compliance with industry regulations.
In certain cases ("simple" activities), authorization is presumed to have been granted on application.
Others (regulated activities) may take up to 4 weeks.
4.10. Post-creation obligations
Once the company has been incorporated, there are still a number of obligations to be met:
- Bookkeeping according to the Andorran chart of accounts,
- Annual filing of accounts with the Register,
- Maintenance of mandatory registers (associates, beneficial owners, minutes),
- Tax returns (corporate income tax, IGI - VAT equivalent),
- Affiliation with CASS (social security) for salaried employees and managers.
These obligations are light compared to other countries, but they must be anticipated and scrupulously respected.
4.11. Cumulative lead times
In practice, average lead times are :
Total: 9 to 14 weeks for a complete constitution.
Case in point - A digital entrepreneur
Marc, 42, a digital strategy consultant, decided to move to Andorra.
- Step 1: He obtains his NIA in 48 hours.
- Step 2: the company name ("Pyrene Digital Solutions SL") is validated in 2 weeks.
- Step 3: He obtains his foreign investment permit within 3 weeks.
- Step 4: He opens an account with MoraBanc and deposits €5,000 (more than the minimum required).
- Step 5: The articles of association are drafted by an Engage lawyer and validated by the notary.
- Step 6: The deed is signed before a notary within a week.
- Step 7: Company registration takes two weeks.
- Step 8: The NRT is quickly allocated.
- Step 9: Marc obtains his business license (coworking office validated).
In less than 3 months, he has a fully operational, tax-optimized and legally recognized company.
5. Case study - Structuring your assets with an Andorran company
5.1. Context: a French entrepreneur faced with a heavy tax burden
Jean-Marc L., 58, is a French entrepreneur who has spent over thirty years developing a regional industrial group.
After selling his company to an investment fund, he finds himself at the head of an estate worth almost 12 million euros, housed in a French holding company.
Initial situation:
- Married, two adult children,
- Real estate assets in France (main residence + a few rental properties),
- A French holding company holding the proceeds of the sale,
- Heavy taxation on dividends and transfers.
Jean-Marc's main concern was :
- Preserve the fruits of your labor,
- Enjoy a second life between sport and nature,
- Prepare to pass on to your children in a tax-neutral environment.
But he soon came up against the reality that French taxation could absorb up to 45% of his wealth over time, between income tax, social security contributions, IFI and inheritance tax.
5.2. The problem: capital "rich in theory but impoverished in practice
Jean-Marc felt he wasn't benefiting from his success.
Each dividend withdrawal was taxed at over 30%, the threat of the IFI hovered over his real estate assets, and inheritance taxes in the event of his death reached record levels.
To put it plainly, his situation placed him in the paradoxical position of having worked all his life only to end up enriching... the taxman more than his own family.
He didn't want a dubious set-up or a risky tax exile. He was looking for a legal, long-term and secure solution.
5.3. The ENGAGE solution
Our firm supported Jean-Marc in a structured and compliant approach.
Here's the strategy:
- Creation of an Andorran holding company (SL)
- Share capital of €10,000 (higher than the minimum required),
- Foreign investment authorization obtained,
- Corporate purpose: holding and management of financial investments.
- Contribution of assets
- After purging the capital gains in the French holding company, Jean-Marc was able to gradually transfer part of his assets to the Andorran structure.
- Objective: secure future income in a low-tax jurisdiction.
- Moving to Andorra with his wife
- Obtaining tax residency (renting an apartment in Escaldes-Engordany),
- French main residence sold, real roots in Andorra.
- Optimizing revenues
- Dividends received from Andorran holding company: 0% tax rate in Andorra,
- French dividends: withholding tax reduced to 5% thanks to the Franco-Andorran agreement.
- Early transmission
- Partial gift of Andorran holding company shares to children,
- No gift tax in Andorra, unlike France where the rate would have exceeded 30%.
5.4. Results
In less than a year, Jean-Marc's situation has changed radically:
- Effective tax rate reduced to 4% on all assets.
- Cash recovery via dividends with virtually no tax impact.
- Transfer of 3 million euros to his children without any gift tax.
- Removal of the IFI risk, which weighed on his French real estate assets.
- New life in Andorra, between hiking, skiing and philanthropic projects.
Jean-Marc summed up his feelings himself:
"I finally feel like I'm enjoying my success. In France, I worked for the state. In Andorra, I can work for my family and my projects."
5.5. A representative but not unique case
Every case is different, but Jean-Marc's example illustrates a simple truth: setting up a company in Andorra can transform the way you manage your assets.
- For an entrepreneur, it's a tool for securing and reinvesting profits.
- For real estate investors, it's a way of optimizing asset ownership.
- For a digital or freelance consultant, it's a guarantee of reduced costs and improved profitability.
- For a wealthy family, it's an opportunity to organize a tax-neutral intergenerational transmission.
5.6. Engage support: rigor and security
At ENGAGE, we know that every project must be :
- Legally secure (compliance with international tax treaties),
- Well-structured assets (to avoid any reclassification as an abuse of rights),
- Sustainable (anticipation of transfers and long-term tax monitoring).
Our approach is based on three pillars:
- Expertise in Andorran law and international taxation,
- A network of partners (lawyers, notaries, tax specialists in France, Spain, Belgium, Luxembourg, etc.),
- A proven methodology to reduce lead times and secure every step.
6. Setting up a company in Andorra: what are the concrete advantages for your assets, your income and your future?
You've worked hard, invested, taken risks.
You've built your business, managed your assets, multiplied your opportunities.
Today, you're at a crossroads: making the most of what you've acquired, securing your assets, and perhaps preparing for a transfer under the best possible conditions.
And what if setting up a company in Andorra allowed you to combine all this at the same time: low taxes, solid legal protection, and a serenity of life that your French or Belgian neighbors no longer enjoy?
It's not a fantasy.
It's a reality, right in the Pyrenees!
6.1. A tax framework that respects your success
In France, Belgium or Spain, wealth success can quickly turn into a tax burden.
Corporation tax, social security contributions, flat tax, IFI, inheritance tax...
The mechanics are well known: the more you build, the more the State collects.
As a result, it is not uncommon for 60% to 70% of an estate to be absorbed by taxes over the course of a generation.
In other words, what you've built up may evaporate before you've fully enjoyed your second life or passed it on to your children.
Andorra, on the other hand, offers a breath of fresh air:
- Corporate income tax capped at 10%,
- Tax-exempt dividends for Andorran residents,
- No inheritance or gift tax,
- No wealth tax,
- Personal income tax never exceeds 10%, with generous exemptions.
It's a tax system that's clear, transparent, in line with OECD standards, but above all respectful.
Here, we don't assume that you're "too rich" and therefore guilty: we recognize that your success is legitimate, and that it must be protected.
6.2. A different philosophy: stability, legibility, continuity
Setting up a company in Andorra is not an escape, but a strategy to ensure the continuity of your assets.
What sets Andorra apart is not just the level of taxation, but the stability of its legal and fiscal framework.
Where other countries modify their tax systems to suit changing political circumstances, Andorra follows a clear line: encourage private initiative, secure capital and guarantee the continuity of the rules of the game.
As a result, you can build for the long term without worrying about a sudden reform upsetting your strategy.
6.3. Andorran companies at the service of your assets
Setting up a company in Andorra is more than just starting up a business.
It also means using the company as a real asset.
- Andorran holding company: house your holdings, centralize your dividends, reinvest your earnings with tax savings of up to 5%.
- Société patrimoniale: hold your real estate or financial portfolios in a tax-neutral environment.
- Operating company: start up or transfer a business (consulting, digital, trading) in a country with low social charges and low taxes.
The major advantage: all these structures benefit from the same competitive tax regime, with a tax cap of 10% and powerful exemptions on dividends and transfers.
6.4. A powerful lever for family succession
You know how sensitive the transmission is.
In France, even after paying income tax, IFI and social security contributions, you still have to contend with inheritance taxes of up to 45%.
In Andorra, the transfer of a company to your children is totally exempt.
This changes everything:
- You can pass on your assets gradually, by early donation, without any tax friction.
- You can organize an inheritance agreement in advance, without undue constraints.
- You can preserve all of your family's assets, instead of seeing part of them lost to the taxman.
That's why more and more wealthy families are choosing to set up an Andorran company as the cornerstone of their inheritance strategy.
6.5. A living environment to match your ambitions
We're not just talking about taxation.
Living and doing business in Andorra also means enjoying a unique lifestyle:
- A safe, virtually crime-free country,
- An exceptional natural environment (skiing, hiking, fresh air),
- Close proximity to France and Spain,
- Modern infrastructures (health, education, digital),
- A well-integrated French-speaking and international community.
Setting up a company in Andorra also means choosing a more balanced lifestyle, where heritage and quality of life are mutually reinforcing.
7. Setting up a company in Andorra: mistakes to avoid to secure your project
Setting up a company in Andorra is an extraordinary opportunity for entrepreneurs and wealthy families.
But like any strategy, it needs to be prepared seriously.
All too often, candidates for expatriation make mistakes that nullify the expected benefits, or even expose them to painful tax reassessments.
Let's take a look at these pitfalls, so that you can avoid them and move forward safely.
7.1. Mistake no. 1: Thinking it's enough to spend 183 days in Andorra
This is one of the most widespread myths.
Many people think that living in Andorra for more than half the year is enough to be considered a tax resident.
In fact, Andorran law provides for two alternative criteria:
- stay more than 183 days,
- or have in Andorra the center of its economic interests.
But beware: your home country also applies its own tax residency rules.
You could therefore be considered a tax resident in two countries at once.
The solution: anticipate the conflict of residence with the double taxation treaty, and above all organize your departure in practical terms: selling or renting out your French residence, transferring income and investments, schooling your children, etc.
7.2. Mistake no. 2: Failing to prepare for your departure for tax purposes (exit tax and unrealised capital gains)
In France in particular, an ill-prepared departure can trigger the exit tax: immediate taxation on the unrealized capital gains of your holdings.
Imagine having to pay millions of euros in tax on a sale that hasn't even taken place yet!
Without support, many fall into this trap.
The solution: prepare your departure in advance, by purging your capital gains, organizing your flows and structuring your contributions to the future Andorran company.
7.3. Mistake no. 3: Improvising asset structuring
Some people set up an Andorran company just to "have a local address" or a simple bank account.
But such an approach is risky : the tax authorities in your home country could reclassify the structure as fictitious.
The solution: give real substance to your company : a real corporate purpose, clear governance and revenues effectively domiciled in Andorra.
In other words, a company with an economic reality and not just a legal veneer.
7.4. Mistake no. 4: Forgetting your post-departure reporting obligations
Even after leaving France, Belgium or Spain, certain obligations remain.
Example: declaration of foreign bank accounts, shareholdings in companies outside the country, or residual income kept locally.
Many expatriates ignore them, and find themselves facing heavy penalties in the event of an inspection.
The solution: work with a tax expert to draw up a checklist of tax obligations in your country of departure, and comply with them scrupulously.
7.5. Mistake no. 5: Neglecting inheritance planning
Many people think that by moving to Andorra, the question of inheritance is automatically settled.
It's not true.
Although Andorra does not levy inheritance or gift taxes, French, Spanish or Belgian civil law may still apply if your heirs reside in these countries or if certain assets remain located there.
The solution: anticipate the succession with an Andorran inheritance pact, anticipated donations and appropriate international structuring.
7.6. Mistake n°6: Thinking Andorra is a "tax haven
It 's important to repeat: Andorra is not a tax haven.
It is a modern, OECD -compliant jurisdiction that cooperates fully with its European partners.
To believe this is to set yourself up for disappointment, as you run the risk of building a strategy on an illusion.
The solution: understand that Andorra is above all a haven of stability, a country where taxation is moderate but legal, and where respect for the rules is paramount.
7.7. Conclusion: errors that can be avoided with the right support
As you can see, setting up a company in Andorra is a powerful lever, but it requires method and anticipation.
The most common mistakes - lack of tax preparation, improvisation, forgetting tax obligations - can be very costly.
That's why we at ENGAGE insist that an Andorran project can't be improvised.
It needs to be prepared, framed and secured.
If you're considering this path, take the time to surround yourself with the right experts.
Click here to book a strategic meeting with one of our tax consultants.
8. Setting up a company in Andorra: strategic FAQ and conclusion
Setting up a company in Andorra generates a lot of interest, but also legitimate questions.
Here are the answers to some of the most frequently asked questions we receive from entrepreneurs and wealthy families.
8.1. Is it legal to set up a company in Andorra to optimize taxes?
Yes.
Andorra is a fully OECD-recognized jurisdiction, with a network of tax treaties (including with France, Spain, Belgium and Luxembourg).
Setting up a company in Andorra is perfectly legal, as long as you comply with domestic and international law, particularly in terms of tax residency and double taxation agreements.
8.2. What is the minimum capital required to set up a company in Andorra?
- SL (Société Limitée): €3,000
- SA (Société Anonyme): €60,000 (of which 25% paid up on incorporation)
In most cases, the SL is more than sufficient for an entrepreneur or investor.
8.3. How long does it take to incorporate a company in Andorra?
On average 10 to 14 weeks, depending on :
- validation of name and corporate purpose,
- foreign investment authorization,
- bank opening,
- notarial signature and registration.
ENGAGE supports its customers in reducing lead times and anticipating milestones.
8.4. Do I have to be resident in Andorra to set up a company?
No, but that changes everything.
- You can set up an Andorran company as a non-resident, but you won't enjoy the full tax benefits.
- To benefit from 0% taxation on dividends, you must become an Andorran tax resident.
That's why we almost systematically recommend combining the creation of a company with a residency strategy.
8.5. How can double taxation be avoided?
Thanks to the double taxation agreements signed by Andorra.
In the event of conflict, precise criteria (home, center of vital interests, place of residence, nationality) can be used to settle disputes.
ENGAGE prepares a solid portfolio of evidence to secure its customers' status.
8.6. What happens to the exit tax if I move to Andorra?
In France, the exit tax applies to unrealized capital gains at the time of departure for tax purposes.
Poor preparation can be very costly.
With the right planning (covenants, assignments, contributions, deadlines), it is possible to optimize this stage and considerably reduce the tax cost.
8.7. Which business sectors are best suited to Andorra?
- Digital services and consulting (low infrastructure requirements, easy internationalization),
- Wealth management and holding companies (optimization of financial income),
- Real estate (asset holding via company),
- Trade and import-export (attractive tax system and low IGI).
8.8. Can an Andorran company be transferred free of inheritance tax?
Yes.
Andorra has no inheritance or gift tax.
This makes it possible to transfer the entire company to one's children or heirs without incurring tax penalties.
8.9. Are Andorran banks reliable?
Yes.
Andorra's banking sector is solid, well-regulated and compliant with international standards (CRS, anti-money laundering).
Banks demand full transparency on the origin of funds, which helps to ensure the credibility of Andorran companies.
8.10. Is it risky to set up a company in Andorra today?
No, if the project is well supervised.
The risks come solely from improvised or ill-prepared strategies: companies without substance, ill-organized tax departures, lack of accounting follow-up.
With a solid methodology and expert support, setting up a company in Andorra is, on the contrary, one of the safest wealth strategies in Europe today.
9. Conclusion: Andorra, a strategic choice for the future
Setting up a company in Andorra is much more than an administrative act.
It's a lifestyle choice, an estate plan, a succession strategy.
It's the chance to transform decades of work into a new-found freedom, within a legal, fiscal and human framework that respects your success.
- Protect your assets,
- You optimize your income,
- You can organize the transfer of your assets within a tax-exempt framework,
- You'll enjoy an incomparable quality of life just a few hours from Paris, Toulouse or Barcelona.
At a time when French and Belgian taxation is becoming increasingly unpredictable and burdensome, not to consider Andorra today is to accept sacrificing a considerable part of one's future wealth.
With method, anticipation and support, setting up a company in Andorra becomes one of the most effective and secure ways of securing your assets.
10. ENGAGE call to action
At ENGAGE, we've been helping entrepreneurs, investors and wealthy families settle in Andorra for years.
Our role is simple: to secure your choices, streamline your processes and guarantee the sustainability of your strategy.
- Click here to book a strategic meeting with an ENGAGE consultant,
- Contact us for a confidential asset audit,
- Discuss your project with one of our French-Andorran tax specialists.
Your success deserves better than unstable taxation.
Andorra offers you a clear, sustainable and prosperous environment.
It's up to you to take the plunge, and we'll be at your side.