ABOUT ANDORRA

Amongst all the countries in Europe, Andorra, officially the Principality of Andorra, is a tiny, independent principality nestled high in the Pyrenees mountains between France and Spain. It is known for its ski resorts, duty-free shopping, and a high quality of life. Andorra is one of the smallest countries in Europe by both area and population. The capital of Andorra is Andorra la Vella, which is its largest and most populous city, serving as the country’s main commercial and administrative hub. According to the report of the World Bank, Andorra is classified as a High-Income Economy, distinguished by its strong tourism and financial services sectors. The currency of Andorra is the Euro (EUR), which it uses through an agreement with the European Union. The value of 1 Euro is approximately 89.85 Indian Rupees as of today’s exchange rates (June 2025). The population of Andorra is estimated to be around 82,000 in 2024. Its neighbouring countries are France to the north and Spain to the south. The official language of the country is Catalan, with Spanish, French, and Portuguese also widely spoken due to its location and tourism. The majority of the Andorran population practices Roman Catholicism. Currently, Andorra does not have its own international airport and relies heavily on airports in nearby France (Toulouse, Perpignan) and Spain (Barcelona, Lleida) for international air travel, with road transport linking it to these hubs. As a landlocked country, Andorra has no seaports and conducts its international trade through the seaports in France and Spain.

The corporate income tax rate in Andorra is famously low at a maximum of 10%. This competitive tax environment is one of its primary attractions for businesses and investors. Additionally, the standard VAT rate is 4.5%, one of the lowest in Europe. There are specific incentives for businesses in certain sectors like innovation, technology, and intellectual property. Opesh Group of companies will be helping you in completing the Due Diligence process which includes financial planning, registration process, business options, and if required, even helping you find a rental property for your office.

Establishing a business in Andorra has become more accessible in recent years, with reforms aimed at attracting foreign investment and diversifying the economy. The Andorran government, through various agencies, promotes the principality as an attractive business destination. A foreign investor who is planning to start his business in Andorra can form various company types, such as a Sociedad Limitada (S.L. – Limited Liability Company) or a Sociedad Anónima (S.A. – Public Limited Company). As of 2012, foreign investors are generally permitted to own 100% of an Andorran company, which was a significant change from previous restrictions.

In case an investor is planning to establish an S.L. in Andorra or a corporate business setup, Opesh Group will be helping you in taking the right decision for setting up your business in Andorra and we will also guide you about how to follow the procedure while formulating your company in Andorra.

Types of Business which can be started in Andorra:

• Tourism & Hospitality: The cornerstone of Andorra’s economy. Opportunities are vast in developing and managing ski resorts, hotels, spas, wellness centers, luxury retail, and adventure tourism activities.
• Financial Services: Andorra’s banking sector has been a traditional strength, known for its stability and discretion. Opportunities exist in asset management, private banking, financial advisory services, and wealth management, especially with its low tax regime.
• High-Value Manufacturing & Specialized Industries: Due to its small size and high costs for heavy industry, opportunities lie in niche, high-value manufacturing, precision engineering, luxury goods, and specialized products that can leverage its international market access.
• Real Estate: A dynamic sector driven by tourism and resident attraction. Opportunities exist in developing residential properties, commercial spaces (for retail and offices), and tourism-related infrastructure.
• Digital Services & Technology: With growing connectivity, opportunities are emerging in IT services, software development, e-commerce, digital marketing, and tech startups, leveraging the principality’s competitive business environment.
• Logistics & Distribution (Niche): While landlocked, its location between France and Spain could support niche logistics operations for high-value goods or e-commerce distribution points within the region.
• Healthcare & Wellness: Opportunities in specialized medical clinics, wellness retreats, and health tourism, catering to a discerning clientele seeking high-quality services in a tranquil environment.

Advantages of Starting Business in Andorra:

• Highly Favorable Tax Regime: One of the lowest corporate income tax rates (maximum 10%) and a low VAT (4.5%) in Europe.
• Political & Economic Stability: A stable democratic parliamentary principality with a well-regulated financial system.
• High Quality of Life: Offers a safe environment, excellent healthcare system, high-quality education, and pristine natural surroundings, making it attractive for entrepreneurs and employees.
• Access to European Markets: While not an EU member, it has a customs union with the EU for industrial goods and benefits from close ties with France and Spain.
• Strategic Niche: Its specialization in tourism and finance provides clear sectors for investment and growth.
• Foreign Ownership Allowed: Up to 100% foreign ownership of companies is generally permitted.

Business Opportunities for Indians in Andorra:

There are niche business opportunities in Andorra for new investors who are planning to start their business abroad. Given Andorra’s specialized economy, Indian investors with expertise in IT & digital services (e.g., fintech, software development), luxury hospitality, specialized manufacturing, or asset management could find avenues for investment. Opportunities might also arise in real estate, particularly in catering to a high-net-worth clientele. Direct trade with India is likely limited, but indirect trade via France or Spain could be explored.

Imports & Exports:

Andorra’s trade profile is unique due to its small size and focus on tourism and duty-free retail. Its imports are primarily consumer goods, food, and energy. Its exports are limited and often specialized. Therefore, direct imports and exports with India would be minimal.

Major items which are exported from Andorra (limited direct exports):

• Tobacco products (niche)
• Furniture
• Mineral water
• Wood products

Major items which are imported in Andorra:

• Consumer goods
• Foodstuffs
• Electricity
• Machinery and equipment
• Fuel
• Automobiles

Manufacturing:

Opportunities in manufacturing are highly specialized, focusing on high-value, light industries that do not require extensive heavy machinery or raw material transport. This could include precision electronics, specialized components, or luxury goods where skilled labor and low taxes are an advantage.

Mining:

Andorra has no significant mining industry due to its size and focus on tourism and environmental preservation.

Major Indian companies which are currently working in Andorra:

Given Andorra’s small size and specialized economy, there are currently no major Indian corporate entities with large-scale operations or manufacturing facilities directly in Andorra. Any Indian business presence would likely be through smaller private investments in sectors like hospitality, niche financial services, or potentially through individual entrepreneurs.

• GDP = $3.67 billion (2023 est.)
• GDP Growth = 1.4% (2023 est.)
• Ease of doing business rank = N/A (Andorra is not ranked by the World Bank’s ‘Doing Business’ report)
• GDP per Capita = $44,700 (2023 est.)

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