ANDORRA HOLDING COMPANY (LIMITED LIABILITY COMPANY – S.L.)
The new corporate law, implemented in September 2012, regulates foreign participation in Andorran companies. Foreign nationals and companies can now open companies in Andorra with 100% foreign ownership in all business sectors; however the formation of a new Andorran company by non-residents must first be approved by the Ministry of the Economy.
In order for a company to be incorporated in Andorra, the company has to obtain a government permission granted by the Ministry of Economy. The company must furnish certain documents validated by an Andorran notary, including the Memorandum of Association and the list of founding shareholders. The Ministry of Economy will ensure that ownership of the company and the proposed objects of the company conform to Andorran laws, particularly with regard to foreign ownership. When permission to incorporate a company is given by the Ministry, a Public Deed is made by an Andorran notary. Then the company is entered to the Register of Commerce.
The application – which must be accompanied by an apostilled Criminal Record Certificate, not more than three months old from the time of issue, a list of all jurisdictions in which the applicant has ever resided, and indeed, his country of birth and/or nationality – is a reasoned presentation of a business plan, preferably with some meaningful three-year calculations of the expected turnover, profits and losses and filling in the standard application form in Catalan (of which Servissim can supply a government translation into English) giving details of the amount and form of the investment envisaged; details of possible employment and training of local people; social responsibility policies etc.
Holding companies in Andorra have the sole purpose of managing and owning shares in foreign companies.
There are two types of Limited Liability companies in Andorra. The Societat Limitadad (S.L.) is a company often used for holding purposes by foreign residents and must have a paid up share capital of at least EUR 3.000. The Societat Anonima (S.A.) is usually established for businesses, which enjoys a much higher turnover and must have a minimum paid up share capital of EUR 30.000.
A company name must be chosen and approved by local authorities. This procedure usually takes 2-5 working days. Names must end with S.L. It is advisable that the chosen name be at least Catalan-sounding.
MEMORANDUM AND ARTICLES OF ASSOCIATION
The Company’s Memorandum and Articles of Association (‘estatuts’ and ‘rao social’) must be presented to the Government (‘Andorra Govern’) in a petition (‘suplica’) for approval. Once the articles have the stamp of approval from Andorra Government, the minimum capital should be deposited in a bank and the parties must formally incorporate the company before a notary public.
A minimum of two shareholders are required. The shareholder can be a corporate body or a natural person of any nationality or residency. Details of shareholders are kept at the local registry. Bearer shares are not permitted.
The minimum capital requirement is EUR 3000. The share capital must be fully paid up in advance of incorporation. This amount must be deposited with an Andorran bank in a designated company incorporation type account. The bank must then release a special certificate, addressed to the designated notary, responsible for concluding incorporation formalities.
DIRECTORS AND COMPANY SECRETARY
A minimum of one director is required, who must be a natural person. The directors’ details must be kept at the registered office and this information should be available for public inspection. There is no requirement to appoint a local director.If the company is actively trading it is recommended to hire a local employee with power of attorney on a part time basis.
The second officer, who must be a natural person, will act as a Company Secretary and may be a non-resident of Andorra. The details of all officers must be retained at the registered office address and this information is available for public inspection.
Every company is required to have a registered office and address in Andorra.
Annual board meetings should be conducted in Andorra.
Usually it takes 1-3 months.
RECURRING MAINTENANCE FEES AS FROM 2ND YEAR
- Provision of Registered office.
- Payment of Government annual fees.