Andorra: Types of Company
Societat Limitadad (SL)
The Societat Limitadad (SL) is commonly used for local trading and requires a minimum paid up share capital of EUR3,000, with a minimum of two shareholders. In order to set up an SL, the first step is to obtain approval of the proposed name (some generic words are banned). The name, once approved and registered, will have local protection.
The company's Memorandum and Articles ('estatuts' and 'rao social') are then presented to the Government ('Andorra Govern') in a petition ('suplica') for incorporation. This step is straightforward when a holding company is being created for local assets, but if local trading or complex external financial situations are involved, the Government may look closely, particularly if the foreign party (who is being given 'rights' by the titular) is a newcomer or non-resident.
Once the Government's approval is given, the capital can be deposited and a notary will formalise the incorporation, along with the 'nominee' paperwork.
If there is to be actual trading or other tangible activity in Andorra, the company will need to apply via a 'suplica' to the Commercial Register in the appropriate commune for a trading license, or 'Registre de Comerc' permission. Finally, the Commune has to approve the premises proposed to be used, which requires further paperwork . . .
Once everything is in place, the Government becomes involved once more (another suplica) to approve the formal opening of the business.
It can be imagined that this whole process will take some months even if everything goes smoothly; if not, it can take a year or more. However, for a straightforwad holding company, it may be only two or three months.
A fee for an SL of EUR563 is payable upon registration. Prior to the introduction of the corporate income tax, an annual fixed tax of EUR801.70 was payable.