How to start a business? 2% profit tax in Andorra
Starting a business in Andorra
The following organizational and legal forms of private companies and firms are currently available for registration in Andorra:
1. Societat Limitada (S.L.)
This is a private company with limited liability (LTD). This legal form of the enterprise is ideal for small businesses. Possible spheres – trade, services, small business. For registration S.L. you need a registered capital of 3000 €. The state single registration fee is 1104.77 € and 5.36 € (registration tax for the name of the enterprise in the Catalan language). State taxes and duties are annually around 850 €.
2. Societat Anònima (S.A.)
This is an approximate analogue of JSC (Open Joint Stock Company under the version of the legislation of the Russian Federation). This legal form of the enterprise is ideal for medium and large businesses, including large enterprises with a large number of shareholders. The authorized capital is 60,000 €. State single registration fee – 803 €
3. Andorra Societat Colectiva
This is the type of company where the capital is divided between partners with unlimited liability. Registration procedures are the same as for S.L. And S.A.
Less popular are organizational and legal forms of companies such as:
– Andorra Partnership (partnership);
– Andorra Sole Proprietorship (individual entrepreneur);
– Andorra Branch (branch of a foreign company, only insurance companies have the right to open these )
How and why is it worth starting a small or large business in Andorra?
1. The minimum direct taxation of citizens and residents in Europe is 10%. Indirect taxes (VAT) are at a rate of 4.5%.
2. Andorra is 12th in the world in terms of quality of life, according to the International living Standard index;
3. The level of Andorran GDP per capita is higher than in the US, Japan, Germany, France or Spain, and stands in 5th place in the world according to the World Bank. Andorra follows only Monaco, Liechtenstein, Luxembourg and San Marino.
4. Andorran banks are among the 20 most reliable banks in the world and Europe. There is the opportunity to open a numbered bank account with a minimal negative effect since the introduction of a global system for automatic exchange of tax information in 2018. VIP banking starts from 3 million euros.
5. The tax burden on businesses is the lowest in the world and in Europe. Corporate tax on companies’ profits is 10% with the possibility of a decrease to 2%. Andorra is among the top 20 best countries in the world for doing business, according to the International Living Index.