Andorra incorporation timeline (2026)

The foundational phase of Andorran incorporation is the application for foreign investment authorisation (Inversió Estrangera). Under the Law 10/2012 on Foreign Investment, any person or entity not resident in Andorra wishing to hold more than 10% of the share capital in a local company must obtain prior approval. This is not a 'tick-box' exercise; the Ministry of Economy scrutinises the ultimate beneficial owners (UBOs), the source of funds, and the intended business activity. For founders in the digital asset or IP space, this involves presenting a clear narrative on how the entity generates value.

The typical duration for this phase is four to six weeks. During this period, the Registre de Societats also reviews the chosen company name (Reserva de Denominació Social) to ensure it is unique and compliant with linguistic standards. Principals must provide apostilled or legalised identification documents and criminal record certificates from their home jurisdictions. We lead the preparation of these dossiers to prevent common errors—such as incorrect legalisation or incomplete UBO disclosures—which can reset the timeline or lead to a rejection. This phase is the primary filter in the Andorran system; once approval is secured, the subsequent legal steps are more predictable. However, banking remains a parallel hurdle that must be addressed immediately to ensure the capital can be deposited for the final deed.

Once the foreign investment authorisation is granted, the focus shifts to the local banking sector. Under Andorran law, the share capital—minimum €3,000 for an SL—must be deposited into a local account designated for company formation. Andorra’s banking landscape is dominated by a few major players, including Morabanc and Andbank, all of whom operate under the strict supervision of the Andorran Financial Authority (AFA). These institutions are highly selective, often prioritising clients who intend to establish physical substance or apply for local residency.

The KYC process for the share capital account is extensive. Banks will require a detailed business plan, CVs of the directors, and documented evidence of the source of wealth. For crypto-native founders or cross-border e-commerce operators, this stage is where most delays occur. Banks may take three to six weeks to conduct their internal risk assessment. It is critical to note that the bank will not issue the required deposit certificate—necessary for the Notary—until their compliance department has fully cleared the UBOs. Xavion Capital manages this 'pre-compliance' phase, leveraging our relationships with local bank officers to present the client’s profile in a way that aligns with the bank's internal risk appetite. Without this proactive management, principals often find themselves in an administrative loop where the investment authorisation expires before the bank account is opened.

With the foreign investment approval and the bank certificate in hand, the incorporation moves to the Notary's office for the execution of the Public Deed of Incorporation. In Andorra, Notaries are public officials who ensure the company's bylaws comply with the Companies Act (Llei de societats operatives de responsabilitat limitada). The bylaws must clearly state the company's object, registered office, and the powers of the directors. It is at this stage that the physical substance of the company is codified.

Following the Notarial signing, the deed is submitted to the Registre de Societats for final entry into the mercantile register. This process usually takes two to three weeks. Once the registration number is issued, the company legally exists, but it is not yet operational. The entity must then apply for a Tax Identification Number (Número de Registre Tributari - NRT). For a holding company with no local activity, the process may end here. However, for an operating entity, the next crucial step is the 'Obertura de Comerç' or trade license. This involves the local parish (Comú), where inspectors verify that the registered office meets the technical requirements for the declared business activity. This multi-layered bureaucracy—Ministry, Bank, Notary, Registry, and Comú—is what distinguishes Andorra from faster jurisdictions, but it also provides the entity with a high level of international legitimacy and 'onshore' status that is increasingly valuable in a post-BEPS world.

For many principals, the incorporation of an SL is a prerequisite for moving their tax residency to Andorra. The 'Active Residency' permit (Residència i treball per compte propi) involves a dedicated application to the Ministry of Interior. A significant requirement under current law is the deposit of €50,000 with the AFA, which is non-interest bearing and held for the duration of the residency. Furthermore, the applicant must own more than 34% of an Andorran company and hold a position on its board of directors.

This residency process adds approximately four to six weeks to the total timeline. It requires a medical examination in Andorra and a final interview with the immigration authorities. The synergy between company formation and residency is high; the local bank will generally view a resident director more favourably than a non-resident one, which can ease ongoing corporate banking operations. From a tax perspective, becoming an Andorran tax resident effectively eliminates personal income tax on dividends received from your own Andorran SL, creating a highly efficient structure for wealth accumulation. We coordinate these two workflows—corporate and immigration—to ensure that the residency permit is processed as soon as the company registration is confirmed, allowing the principal to transition their personal and professional life to the Principality with minimal friction. This dual-track approach is essential for founders seeking the full fiscal benefits of the jurisdiction.

The final stage in establishing a fully functional Andorran entity is the activation of the Trade Licence (Obertura de Comerç) and ongoing tax compliance. Every operating company must have a physical office; 'virtual offices' are generally not permitted for substantive trade licenses. The office must be a minimum size (typically 20-30 square meters) and have its own electrical contract and fire extinguisher, subject to inspection by the local Comú. This requirement ensures that every Andorran company has a tangible footprint, which is vital for claiming the benefits of Double Taxation Agreements (DTAs).

Once the trade license is active, the company must register for indirect tax (IGI), the Andorran equivalent of VAT, which stands at a competitive 4.5%. For entities engaged in international IP exploitation or high-value consultancy, applying for the special tax regimes (the 2% effective rate) requires a formal filing with the Andorran Tax Office (Departament de Tributs i de Fronteres). This filing must demonstrate that the core income-generating activities are performed within the Principality. Annual obligations include the filing of audited financial statements if certain thresholds are met, and the payment of annual municipal taxes and Chamber of Commerce fees. Xavion Capital provides the structural guidance to ensure that your SL remains compliant with these local standards, protecting the 10% (or lower) tax position against international scrutiny. The complexity of the Andorran setup is its greatest strength, providing a robust defence against global minimum tax initiatives.