Andorra – Self-Employment

How self-employment works for expats in Andorra

Foreign nationals cannot operate as self-employed individuals in Andorra without first establishing physical residency in the Principality. This is a regulated professional environment that demands genuine commitment — registering a business while continuing to live elsewhere is simply not permitted.

Active residency permits in Andorra broadly fall into two categories: self-employed and salaried employee. Referred to in Catalan as “residència per compte propi”, the self-employed route allows an individual to move to Andorra and work through their own structure — in practice, this means either creating or becoming a participant in an Andorran company from which income is generated within the country.

Two key conditions must be satisfied: you must own more than 34% of the company’s share capital and hold a seat on its administrative body. This is conceptually similar to a sole director–shareholder arrangement recognised in other jurisdictions, though Andorra encodes this requirement in statute rather than leaving it to individual discretion. Those holding this permit are expected to spend a minimum of 183 days per year within the Principality — a threshold that reflects the expectation of a genuine transfer of one’s centre of activity to Andorra.

A separate category exists for the “Professional Liberal” — a comerç (sole proprietorship rather than a limited company) — intended for self-employment within certain regulated professions such as medicine and architecture, where qualifications must be validated by the relevant Andorran professional body or department. This route can be harder to navigate depending on an applicant’s background and credentials, but it does not carry the AFA bond requirement that applies to the company formation route.

Since June 2023, registering as a qualified liberal professional requires a B2 level Catalan language qualification, under Law 42/2022. This language requirement does not extend to the company formation route. Applicants should always verify the current language rules with the Government of Andorra before proceeding.

Self-employment and business structures available in Andorra

Choosing the right legal framework is one of the most consequential early decisions when setting up a business in Andorra. Your choice will directly affect ownership arrangements, personal liability, and required capital. Andorra provides several distinct business entity types suited to different scales of operation, risk appetites, and privacy preferences.

The principal structures are as follows:

• Societat Limitada (SL) — Limited Liability Company: By far the most widely used form, broadly equivalent to a private limited company in other jurisdictions. It may be managed by multiple partners, or by a single partner — in the latter case it is referred to as a Societat Limitada Unipersonal (SLU). Minimum authorised capital stands at €3,000. Each founder’s exposure is capped at the value of their shareholding, with no personal liability for the company’s debts beyond that amount.
• Societat Anònima (SA) — Public Limited Company: Requires a minimum authorised capital of €60,000. Shareholder liability is similarly capped at the value of their shares. This structure suits larger enterprises seeking to raise capital through share issuance, but it is significantly more costly to administer than an SL given its audit and governance obligations. In practice, the SA form is largely reserved for banks, insurers, and listed entities.
• Comerç (Sole Proprietorship / Liberal Profession): A sole trading structure for self-employment in specific recognised professions such as architecture and medicine. Credentials must be assessed and approved by the appropriate Andorran professional body. Conceptually similar to a sole trader registration elsewhere, but confined to regulated professions.
• Societat Col·lectiva (General Partnership): A traditional partnership structure in which every partner bears unlimited personal liability for the business’s obligations. There is no equivalent of a limited liability partnership in Andorra, meaning all partners’ personal assets are at risk. This structure is rarely selected by expats for that reason.
• Holding Company: It is common practice in Andorra to establish holding companies — typically structured as private limited companies — whose purpose is not direct commercial trading but rather the management and administration of investments held in other entities.

Content creators, engineers, consultants, and digital marketers most frequently opt for active self-employed residence through the SL route, since it combines capped personal liability with full access to the benefits of Andorran tax residency.

How to register as self-employed in Andorra

Working in Andorra on a self-employed basis — locally referred to as compte propi — appeals to many people for its relatively streamlined system, low tax burden, and lighter administrative load compared with most neighbouring European countries. Freelancers, remote workers, and entrepreneurs are drawn to the flexibility this path offers. Alongside those advantages come real obligations, however, including securing the correct residency permit, meeting regular social security contributions, and satisfying local licensing requirements.

The registration process typically unfolds through the following stages. Fees and processing times should be confirmed directly with the Government of Andorra and the Andorran Financial Authority (AFA), as these figures are subject to revision.

1. Obtain an Administrative Identification Number (NIA): The NIA is a prerequisite for all dealings with the Andorran administration and must be obtained before any formal process can begin. It is issued upon submission of legalised documents including a passport, criminal record certificate, and certificate of residence.
2. Establish the legal structure: A company must be incorporated in Andorra prior to submitting the residency dossier to the immigration department. The Societat Limitada (SL) is the predominant choice. Those qualifying as licensed liberal professionals may alternatively register as a comerç, subject to credential validation by the relevant Andorran professional body.
3. Reserve a company name: A request must be submitted to the Government of Andorra listing up to three preferred name options along with the intended business activity and legal form. This step typically takes around ten days.
4. Obtain foreign investment authorisation: Every non-resident shareholder must secure foreign investment authorisation before participating in an Andorran company. Issued by the Government of Andorra, this certificate confirms foreign ownership and requires documentation evidencing the source of funds and the ownership structure. Processing generally takes between ten and twenty working days when the file is complete.
5. Deposit the AFA bond: A payment of €50,000 must be made to the Andorran Financial Authority (AFA) as part of the self-employed residence application (as of 2025). Under legislation passed in January 2026, this sum is now non-refundable — it is no longer returned upon departure from Andorra, but constitutes a definitive payment to the state. Confirm the current rules with the AFA before applying.
6. Sign the deed of incorporation before a notary: Once the preceding steps are complete, the founders — or their duly authorised representatives — must attend before an Andorran Notary Public to execute the public deed of incorporation, presenting the name certificate, foreign investment authorisation, share capital deposit certificate, and articles of association.
7. Register with the Companies Register: The Notary Public is responsible for lodging the company with the Companies Register within twenty days. Registration fees range from approximately €1,000 to €1,500 depending on the structure chosen (as of 2022; verify current fees before proceeding).
8. Obtain a Tax Registration Number (NRT): Following incorporation, an NRT must be obtained from the Tax and Border Department by filing a census declaration form, address declaration, deed of incorporation, and other required documentation.
9. Apply for the commercial trading licence (Obertura de Comerç): The final incorporation step involves obtaining a local trading licence, which requires an inspection of the registered premises, health and safety checks, and approval at parish level to authorise operations at that address.
10. Register with CASS (social security): The company and any employees must be registered with the Andorran Social Security Fund (CASS) to finalise the setup, after which trading may begin.
11. Submit the immigration application: With the company duly constituted, the relevant documentation is submitted to the immigration department of Andorra to apply for the active self-employed residence permit, which the department then assesses.

From start to finish, incorporating a company in Andorra typically takes between two and three months. All documents originating abroad must be apostilled under the Hague Convention, and every document must be translated into Catalan, the official language of the Principality.

How to set up a company in Andorra as an expat

Andorra has emerged as a popular jurisdiction for entrepreneurs seeking tax efficiency, political stability, and proximity to European markets. Its corporate tax rate is capped at 10%, well below the levels prevailing in neighbouring countries, making it structurally attractive for business owners.

Foreign investors may own 100% of the share capital — no local participation is mandated. While non-residents may establish and own Andorran companies, at least one person — whether an administrator or employee — must be resident in the country.

The core requirements for establishing a company as a foreign national are set out below:

• Minimum capital: The minimum authorised capital for an SL is €3,000, which must be deposited into the company’s bank account before incorporation takes place (as of 2025).
• Shareholders and directors: Foreign nationals may hold 100% of a trading or holding company. At least one director must be appointed, and shareholders may be of any nationality.
• Foreign investment authorisation: The application form, provided by the Government of Andorra, must be completed by any non-resident who intends to hold more than 10% of the share capital of the company being incorporated.
• Registered office: The company’s office must be located within Andorra, and the company register must likewise be maintained in the Principality.
• Notarisation: Incorporation must be formalised by executing a public deed before an Andorran notary, at which point the articles of association are drawn up and the company is entered in the Companies Registry.
• Beneficial ownership declaration: A beneficial owner identification form issued by the Government of Andorra must be completed in order to identify the ultimate beneficial owners of the company, in support of anti-fraud and anti-money-laundering obligations.
• Bank account and KYC: Before signing the deed of incorporation, the share capital must be deposited into an Andorran bank account opened in the company’s name while it is still in formation. Banks apply rigorous KYC and AML procedures covering identity, nationality, business activity, and source of funds. For non-residents this process may take longer, but it is entirely achievable when documentation is complete and well organised. Cryptocurrency-related ventures may face a more protracted account-opening process.

The total cost of establishing a company in Andorra typically falls between €6,000 and €11,000, excluding the required share capital (as of 2025). These figures do not include the AFA deposit required for active self-employed residency. Always confirm current costs with a licensed Andorran adviser or the Andorran Companies Register.

Certain business activities are prohibited or restricted in Andorra — these include online gambling, specific financial services, and activities requiring recognised local professional qualifications such as medical practice, estate agency, and architecture. Verify that your intended activity is permitted before investing time or money in the process.

Working as a digital nomad in Andorra

Andorra introduced a dedicated digital nomad permit through Llei 42/2022 (the Digital Economy, Entrepreneurship and Innovation Law), adopted on 1 December 2022. The implementing regulations came into effect in early 2023, with the principal regulatory framework established by Decret 212/2023 (10 May 2023), making permits practically available from mid-2023 onwards.

Andorran legislation defines a digital nomad as someone who does not require a fixed geographical location to carry out their work and who relies on telecommunications and technology to conduct their professional activities. The original definition was framed primarily around content creators, entrepreneurs, and well-paid contractors working for overseas companies. In practice, the government targets profiles that actively contribute to the development of the digital economy, entrepreneurship, or innovation within the Principality.

The digital nomad permit carries several meaningful advantages over the standard active self-employed route:

• No AFA deposit: holders of the digital nomad permit are not required to make the €50,000 payment to the Andorran Financial Authority that applies to standard compte propi residents.
• No requirement to incorporate an Andorran company in order to establish tax residency.
• No CASS social security contributions, provided the holder maintains adequate private health and disability insurance coverage.
• A minimum stay requirement of just 90 days per calendar year, considerably lower than the 183-day threshold expected of standard active residents.

Unlike classic active residency, the digital nomad permit does not authorise the holder to conduct economic activities within Andorra itself — it is designed for individuals whose work and income are tied to foreign entities and who can demonstrate financial self-sufficiency.

The annual quota for digital nomad visas is capped at 50 applicants, which makes the selection process competitive. Applicants must demonstrate a monthly income of at least approximately €4,128, equivalent to three times the Andorran minimum wage (as of July 2024; verify the current threshold with the relevant authority before applying).

Two main costs are associated with the digital nomad permit: an application fee of €2,500 and a residence card fee of €500 per applicant and per dependant, payable at each renewal (figures drawn from available sources; confirm current fees with the Government of Andorra).

The permit is initially valid for two years and may be renewed for successive periods of two, three, and up to ten years. Following the enactment of the Language Law (Llei 6/2024), all residents renewing their permits must demonstrate a basic knowledge of Catalan — specifically A1 level for the first renewal and A2 for the second. Free language courses are offered through the Andorran government.

The digital nomad framework continues to evolve. Renewal conditions and quota figures may change, so always consult the latest guidance on the official Government of Andorra website or speak with a licensed Andorran immigration adviser before making an application.

Taxes and social contributions for self-employed expats and business owners in Andorra

The tax environment for self-employed individuals in Andorra is highly favourable by European standards. The first €24,000 of annual net profit is entirely exempt from personal income tax. A reduced rate of 5% applies on earnings between €24,001 and €40,000, and only income exceeding €40,000 is taxed at the maximum rate of 10%. These bands compare extremely well with most European systems, where higher marginal rates typically kick in at far lower income thresholds.

Self-employed workers participate in the social security system through a dedicated scheme in which they bear the full contribution themselves. The minimum contribution base is linked to the national average salary (€2,041.35 in 2025), and a 22% rate applies — producing a monthly payment of roughly €460. Of this total, 10% funds the general social security branch and 12% is allocated to retirement provision.

For 2025, the standard monthly CASS contribution is €563.42, calculated at 22% of the average national salary and split between the general branch (10%) and retirement (12%). Reduced contribution bases — set at 25%, 50%, 62.5%, or 75% of the standard base — are available to those whose turnover or circumstances qualify, bringing the monthly payment down accordingly. Unlike employment arrangements in many other countries where the cost is shared between employer and employee, the self-employed in Andorra absorb the full contribution — but the overall rate remains substantially lower than in most neighbouring social security systems.

The standard corporate income tax rate is 10%, notably below the European average of around 25%. Corporate profits are taxed at this rate, and subsequent distributions from an Andorran company to its shareholders are not subject to a further layer of personal income tax.

Sole proprietors and companies supplying taxable goods or services must register for IGI (Impost General Indirecte) — Andorra’s equivalent of VAT — once the relevant threshold is reached. The general IGI rate is 4.5%, with reduced rates of 0%, 1%, 2.5%, and 9.5% applying to specific categories of activity. Many smaller sole traders serving local customers may not cross the registration threshold, but those working with larger or international clients should expect to register.

Andorra has concluded over thirteen double taxation agreements (DTAs) with countries around the world, including with EU member states such as Spain, designed to prevent the same income from being taxed twice and to clarify tax obligations at personal, banking, and professional levels. For current rates, applicable thresholds, and treaty details, consult the Andorran Tax and Border Department (Departament de Tributs i de Fronteres).

Incentives, grants, and programmes for expat entrepreneurs in Andorra

Andorra has invested considerable effort in broadening its economic base, with a focus on technology, innovation, and tourism. The Principality hosts more than 10,000 registered businesses and, backed by continued infrastructure and connectivity investment, is carving out a reputation as an emerging destination for technology entrepreneurs, remote workers, and investors.

The principal incentive frameworks accessible to expat entrepreneurs include the following:

• Digital Nomad and Digital Economy Programme: Andorra has established a framework for attracting remote workers through the digital nomad visa introduced by Law 42/2022 of 1 December on the digital economy, entrepreneurship, and innovation. Entrepreneurs contributing to the digital economy can obtain this permit without the €50,000 AFA deposit that applies to the standard self-employed route. While comparable in concept to dedicated startup or entrepreneur tracks available in countries such as Portugal or Germany, Andorra’s scheme is tightly limited to 50 places per year.
• Low headline tax rates as a structural incentive: The corporate tax rate is capped at 10%, and when combined with available deductions and tax incentives, Andorra’s fiscal framework is deliberately structured to attract foreign investment and entrepreneurial activity — making the tax system itself one of the country’s most potent incentives.
• Intellectual Property (IP) regime: Andorra provides preferential tax treatment for certain companies exploiting intangible assets, including intellectual property, which may attract significantly reduced effective tax rates. Note that a 2% tax rate formerly available for certain IP activities is no longer in force (as of available information). Confirm the current IP regime with a licensed tax adviser before structuring around it.
• Holding company exemptions: Companies operating under Andorra’s holding regime benefit from tax exemption on dividends received from overseas subsidiaries, dividends distributed to shareholders resident in Andorra or abroad, and capital gains arising from the transfer of shares. Dividends received by individual or corporate shareholders of an Andorran holding company are also exempt from personal or corporate income tax.
• Professional Liberal deposit exemption: The €50,000 AFA deposit does not apply to “professionals liberals” or “professionals titulats” — individuals practising qualified regulated professions such as law or medicine — provided their credentials are formally recognised by the relevant Andorran professional body.

Andorra does not currently operate a government-backed startup accelerator or grant programme comparable to those available in larger economies. The country’s primary attraction for entrepreneurs is structural in nature: low taxes, streamlined administration, and a regulated but accessible environment. Always verify the current status of any incentive scheme with the Government of Andorra or the Tax and Border Department.

Practical challenges of self-employment and running a business in Andorra

Establishing a company in Andorra is a technical undertaking that demands careful planning, effective coordination, and a solid grasp of the legal landscape. It is neither quick nor linear — commercial, banking, tax, and administrative stages must often advance simultaneously, supported by properly authenticated documentation at every turn.

Language: All documents must be legalised and translated into Catalan, Andorra’s sole official language. Although many advisers and officials are also fluent in Spanish and French, every formal submission — from the articles of association to tax returns — must be in Catalan. Expats unfamiliar with the language will need professional translation assistance throughout.

Banking access: Andorran banks apply rigorous KYC and anti-money-laundering procedures covering identity, nationality, business activity, and source of funds. Non-residents can expect a longer process, though it is entirely achievable when paperwork is thorough and well organised. Ventures with any connection to cryptocurrency may encounter a particularly prolonged account-opening process.

Professional support — a practical necessity: Understanding the legal framework, meeting all requirements, and structuring your activity correctly from the outset makes an enormous difference to the smoothness of the whole experience. A local gestor or licensed accountant — broadly equivalent to a tax agent or chartered accountant in other countries — is effectively indispensable for ongoing compliance. Annual obligations include accounts preparation, income tax computation, and IGI filings (required twice a year or more), which a qualified accountant will ordinarily handle on your behalf.

Residency compliance: The 183-day minimum stay requirement is enforced in practice, and authorities may verify your actual presence in Andorra, including through enquiries with neighbours. If the company generates very little turnover, this may be read by the authorities as evidence that no genuine economic activity is taking place. Insufficient business activity or a negative police report could lead the immigration department to refuse renewal of your residence permit, which would simultaneously extinguish your Andorran tax residency.

Invoicing foreign clients: Billing international clients from an Andorran base is entirely legal and commonplace, and Andorra’s low IGI rate combined with the absence of most EU VAT obligations can work in your favour. Nevertheless, the rules around IGI registration, reverse-charge mechanisms, and the interaction with clients’ domestic tax systems can be intricate. A local tax adviser with cross-border experience is strongly recommended.

Immigration quotas: Active residents are subject to quota limitations. The most recent quota regulation is Decret 124/2025 (April 2025), which governs the number of self-employed authorisations available. The government has been progressively tightening these quotas in recent years, meaning that even thoroughly prepared applications may face delays or outright rejection if the annual quota is already filled. Early engagement with an immigration specialist is therefore strongly advisable.

Frequently asked questions

Can I be both employed by an Andorran company and run my own business at the same time?

Active residency in Andorra is divided into two distinct categories — self-employed and salaried employee — and these are generally treated as mutually exclusive. The company formation route is not available to someone simultaneously seeking employment with a separate existing company, nor does that permit allow work for another employer. If you are considering combining both income streams, you should discuss the specific legal and tax implications with a licensed Andorran adviser before submitting any application.

Can I invoice foreign clients from Andorra?

Yes. Serving international clients is among the most common motivations for professionals choosing to relocate to Andorra. The favourable tax environment can make the arrangement even more advantageous when working with overseas clients. You will need to ensure that your invoicing practices comply with Andorran IGI rules and that you have a clear understanding of how cross-border transactions interact with the tax regimes of your clients’ home countries. A local accountant with experience in international transactions is essential in this context.

What happens to my business or self-employment status if my residence permit is not renewed?

A failure to demonstrate genuine business activity or a negative police report may prompt the immigration department to decline a permit renewal or withdraw an existing permit, with the direct consequence that Andorran tax residency is also lost. If your permit lapses, you would no longer have the right to operate as a self-employed person or company director under the active residency framework. Maintaining demonstrable business activity and honouring the physical residency requirement throughout the permit’s validity are therefore critical obligations.

Is there a minimum income requirement to be self-employed in Andorra?

Active self-employed residents must carry out genuine economic activity in the country and generate a minimum level of income. This threshold is not published as a fixed annual figure but is assessed in the context of the company’s actual activity. For the digital nomad permit, applicants must show a monthly income of at least approximately €4,128 — three times the Andorran minimum wage, as of July 2024. Always verify the current thresholds with the Government of Andorra or a licensed adviser before applying.

Do I need to speak Catalan to set up a business in Andorra?

All official documentation must be translated into Catalan, the only official language of Andorra. While it is possible to engage translators and advisers to handle paperwork on your behalf, the Language Law now requires residents to show a basic grasp of Catalan at permit renewal — specifically A1 level for the first renewal and A2 for the second. Free language courses are made available through the Andorran government to help residents meet this requirement.

Can I own 100% of an Andorran company as a foreign national?

Yes, non-residents may hold up to 100% of an Andorran company’s capital, provided the necessary foreign investment authorisation is obtained from the Andorran government. However, to qualify for active self-employed residency, you must personally hold more than 34% of the shares and occupy an administrative role, and the company must be able to demonstrate authentic local economic activity.

How long does it take to get up and running as self-employed in Andorra?

Company formation in Andorra typically takes between two and four months in total, encompassing name reservation, foreign investment authorisation, notarisation, Companies Register filing, and trading licence approval. The immigration application proceeds in parallel and adds further time to the overall timeline. A realistic planning horizon is three to five months from the point of initial preparation to receiving a residence card and being fully operational — and gathering apostilled documents well in advance will help avoid unnecessary delays.

Are dividends from my Andorran company taxed when I take them as personal income?

Corporate profits are subject to a 10% tax at company level, and distributions from an Andorran company to its shareholders attract no further tax at the personal level. Dividend income is exempt from Andorran personal income tax, which is a considerable advantage relative to many other European countries where corporate profits and shareholder dividends are each taxed separately. However, if you retain any tax residency obligations in another country, dividend income may remain taxable there — in which case the relevant double taxation agreement should be reviewed and cross-border tax advice sought.