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An Andorran holding company can be an effective way to hold shares, receive dividends and manage investments at a 10% corporate rate, with 0% tax on dividends paid on to an Andorran-resident owner. But it only works with genuine economic substance — a real office, a resident director, actual decision-making in Andorra — and only when you yourself are genuinely Andorran tax resident. Shell structures fail, and other countries’ anti-abuse rules will unwind them.
A holding company (often an SL or SLU) that owns shares in other companies, real estate, or an investment portfolio. Used properly by an Andorran-resident owner, it offers:
Andorra requires companies to have real economic substance, and so do the countries your income comes from. In practice that means:
If the substance is thin, foreign tax authorities apply controlled-foreign-company (CFC) rules, beneficial-ownership tests in treaties, and general anti-abuse doctrines to tax the income as if the holding did not exist — and they increasingly do.
An Andorran holding company does nothing for you if you are still tax resident somewhere else. If you live in Spain and set up an Andorran holding, Spain taxes you on it. The structure only delivers when the owner has genuinely moved to Andorra — more than 183 days, centre of vital interests, the whole life shifted. The company follows the person, not the other way around.
Expect similar setup costs to any Andorran company — around €7,000 to incorporate — plus ongoing accounting (€150–300+ a month depending on complexity), an office, and a director’s time. Corporate tax returns and, where relevant, IGI filings are annual obligations.
At the 10% corporate rate (3% minimum effective), with a participation exemption that can make qualifying dividends and share gains tax-free at the holding level. Distributions to an Andorran-resident owner are then tax-free.
Yes. A real office, a resident director making decisions in Andorra, local accounting and genuine activity. Without substance, foreign anti-abuse and CFC rules will tax the income as if the company did not exist.
Not effectively. If you are tax resident elsewhere, that country taxes you on the structure. The holding only works once you have genuinely relocated to Andorra.
Around €7,000 to incorporate, plus ongoing accounting from €150–300 a month, an office, and director time.
Last reviewed: 3 September 2026. General information, not legal or tax advice; corporate and anti-abuse rules change and this page may become out of date. Structure this with an Andorran tax adviser and advice in the countries your income comes from. Speak to our team.
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