Starting a business in
🇦🇩Andorra
Checked November 4, 2026 · How we score
Corporate tax
10%
Top income tax
10%
Setup from
$3,000
all-in, first year
Time to form
9 weeks
visit usually needed
Taxes in Andorra
| Corporate income tax | 10% General 10% corporate income tax; 2% for new companies in their early years under certain conditions, reduced rates for qualifying holding and international trading income, and a minimum tax-payable mechanism. |
|---|---|
| Personal income tax (top) | 10% IRPF is 0% up to EUR 24,000, 5% from EUR 24,000 to EUR 40,000 and 10% above EUR 40,000. Tax residency requires 183 days per year. |
| Tax system | Worldwide income |
| Capital gains tax | 10%Gains are taxed within the IRPF at a flat 10% for residents; real-estate transfers have separate duties and a reduced rate for longer holding periods. |
| Dividend withholding (non-residents) | 0% |
| VAT / GST | 4.5% |
| Social security | CASS social security contributions are about 22% of salary (15.5% employer, 6.5% employee), with a cap on contributable salary. |
Forming a company in Andorra
| Usual entity | SL (Societat Limitada, limited liability company) |
|---|---|
| Minimum capital | $3,300 |
| Setup cost (all-in) | $3,000–$8,000 |
| Annual running cost | $5,000–$14k |
| Time to incorporate | 9 weeks |
| Form remotely as a foreigner | No |
| Local director required | Yes |
| Local address required | Yes |
| Owners on public register | No |
| Statutory audit for small companies | No |
| Business banking for non-residents | Hard |
Residency and visas
Active residency requires working or running a company locally and at least 183 days of presence. Passive residency (no work) requires a qualifying investment in Andorran assets plus a deposit and only 90 days per year; the investment threshold was reportedly raised to around EUR 1 million in 2026, with a housing-fund route from about EUR 400,000 plus a EUR 50,000 deposit. Confirm current figures with the Ministry before committing.
| Digital nomad visa | No |
|---|---|
| Golden visa | Yes, from $440k |
| Ease of residency for founders | 4/5 (1 = easiest) |
Special tax regimes
Passive residency
Non-working residents can obtain residency by investing in Andorran assets, depositing funds with the AFA and staying 90 days a year, in exchange for access to the 0-10% IRPF scale.
Active residency (self-employed / company owner)
Founders who set up and work in a local company can obtain residency and, once resident for 183 days, pay IRPF capped at 10%.
International trading and holding reliefs
Qualifying holding and international trading income benefits from partial exemptions that reduce the effective corporate tax rate below 10%.
Pros and cons
Why founders pick Andorra
- 10% corporate tax and maximum 10% personal income tax
- Only 4.5% VAT (IGI)
- No wealth, inheritance or dividend withholding taxes
- Safe, stable microstate between France and Spain
Watch out for
- Foreign-investment authorisation and local presence required
- Passive residency threshold is high and has changed recently
- Very small market and limited banking options
- Property is expensive and residency needs genuine physical presence
Best for: Founders willing to physically relocate for a 10% personal tax cap · Wealthy individuals seeking passive residency in Europe · Service businesses with a local presence
Andorra: common questions
What is the corporate tax rate in Andorra?
The general rate is 10%, with 2% available to new companies for a limited period under conditions, and reduced effective rates for qualifying holding and trading income. A company must be incorporated and operated locally to benefit.
Can a non-resident open a company in Andorra?
Non-resident founders need prior authorisation from the Ministry of Economy for foreign investment, a local registered office and usually a locally resident administrator. A SL requires EUR 3,000 capital and the process takes roughly 1-3 months, so a remote setup is not realistic.
What are the income tax rates in Andorra?
IRPF is 0% on income up to EUR 24,000, 5% between EUR 24,000 and EUR 40,000, and 10% above EUR 40,000. There is no wealth tax and no inheritance tax in the direct line.
How much do you need to invest for Andorran passive residency?
A 2026 law reportedly raised the minimum investment to about EUR 1 million in Andorran assets, with an alternative route via the housing fund starting at about EUR 400,000 plus a EUR 50,000 deposit. Passive residents must spend at least 90 days a year in Andorra; verify figures with the official sources before applying.
Is Andorra a tax haven?
Andorra was removed from the OECD tax-haven list in 2009 and now exchanges tax information automatically, but it is still commonly described as a low-tax jurisdiction because of its 10% rates and absence of wealth tax.
Sources
- Andorra Tax Department (Departament de Tributs i de Fronteres)
- Government of Andorra
- PwC Worldwide Tax Summaries - Andorra
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Not tax or legal advice. Rates and rules change; we check official sources and update every page, but verify with a licensed adviser in the country before acting. Spotted something out of date? Use the correction form below.