Andorra offers a favorable environment for technological and innovative startups to grow with institutional support and tangible benefits. A specific commercial company model has been defined for this type of business, with conditions that encourage creation, expansion, and access to financing.
What qualifies as a startup in Andorra?
Startups are newly established companies that provide innovative products or services with a strong technological component. They must also operate independently from existing companies, unless those are also startups or result from a merger or spin-off involving one.
How to obtain startup status
- First, establish the company according to current commercial regulations.
- Then, within six months, apply for registration as a startup company with the Companies Registry.
- The application must include a project description, the technological components involved, and information about the founding partners.
The registry has up to one month to process the request. If no decision is made within that time, the application is considered denied.
What does it mean to be a startup company?
Once the status is granted, the company must add the SLS or SAS suffix to its business name. It will also receive an official registration number and a brief description of its business model.
Key benefits and obligations
- Favorable taxation: exemption from personal income tax in some cases, benefits on corporate tax, and exemption from the annual registry maintenance fee.
- Equity-based compensation: it's possible to reward administrators, employees, and suppliers with company shares, subject to prior approval by the general assembly.
- Investment and funding: convertible loans are treated as privileged claims if the company goes into bankruptcy.
- Legal flexibility: fewer restrictions on share buybacks and streamlined procedures for capital increases.
Key requirements for partners
- Exclusive involvement in company management (unless otherwise agreed).
- Post-contractual non-compete obligation for up to 3 years.
- Minimum 5-year holding period for company shares.
- Option to assign economic rights linked to the value of company shares.
Wondering if your project could qualify as a startup in Andorra? If it's innovative, tech-driven, and scalable, you're already halfway there.