Geography, Population, Languages
Nestling high in the Pyrenees between France and Spain, in the valley of the river Vella (Vieille – French), the Principality of Andorra measures no more than 467 sq. km. The population of Andorra is 70,000, of which 23,000 are native Andorran, about 32,000 are Spanish, 8,000 Portuguese, and about 5,000 French. The official language is Catalan, while Spanish and French are also spoken. The territory comprises 7 Communities. The capital is Andorra la Vella.
History, Political Structure and Law
Andorra has preserved its neutrality and its identity for more than 700 years, with an unique record of diplomatic non-involvement in European affairs. The elected local government consisting of Cap de Govern (the President) and his ministers (28 of them) run the government from la Casa de la Vall (the Houses of Parliament). In 1993, Andorra created its own constitution and is now a member of the United Nations. The French and Spanish governments both share equal responsibility for military defence and foreign affairs. The legislative body is the General Council.
Economy and Infrastructure
The economy of Andorra is split between farming, banking, financial services and tourism, with over 12 million tourists visiting the country every year. The Principality is an ideal location in which to site management and control of offshore companies. It is an international financial centre. Its banks offer a wide range of discreet, professional and confidential services, with banking secrecy upheld by law.
Andorra has no official currency, a wide range of currencies are accepted internally. The Euro is now the most commonly used, and the national accounts are kept in Euros.
Andorran companies can be established for the purpose of local trade, holding of assets and investments and cross-border commerce.
There are two types of Andorran company for international trade and investment, both of which enjoy limited liability:
- The Societat Limitadad (S.L.) is a company often used for local trading.
- The Societat Anonima (S.A.) is usually established for businesses whith a much higher turnover.
The following requirements apply to the name of a Company:
- The name must end with S.L. or S.A., depending on the type of Company.
- It is advisable for the name chosen to be Catalan-sounding.
A minimum of two shareholders are required and at least one shareholder must be of Andorran nationality owning a minimum of 67% of the company`s share capital. Non-Andorrans and non-residents can only own 33% of the share capital. Details of shareholders are kept at the local registry. An offshore company can be used to own 33% of the share capital. It is possible to arrange for an Andorran citizen to act in a nominee capacity for the ultimate owner of the company.
The Societat Limitadad (S.L.) must have a paid up share capital of at least 6,000 euros (Spanish Pesetas). The Societat Anonima (S.A) must have a minimum paid up share capital of 30,000 euros.
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 issue a special certificate, addressed to the designated notary responsible for concluding incorporation formalities.
Annual Taxation and Fees
The Principality is a no tax jurisdiction with no direct taxation being levied on income, capital or corporations. Wealth and inheritance taxes do not exist.
Financial statements are subject to the requirement that accounting information and books must be maintained at the company’s registered office. There is however no requirement for these documents to be audited or filed with local authorities.