Asset-holding company in Andorra

An asset-holding company is a company whose main purpose is to hold, administer and manage wealth, rather than carry out a conventional trading activity. It allows certain assets to be held within a dedicated structure: organising family wealth, separating private assets from operating businesses, and preparing for succession.

In Andorra, such a structure can hold, among other things:

• real estate;
• shareholdings in other companies;
• an investment portfolio and financial assets;
• cash and family investments.

Depending on the objectives, different forms can be considered — most commonly the Societat Limitada (SL), sometimes the SA in more complex set-ups. The right structure always depends on the nature of the assets and the shareholders' tax residency. See our comparison of company types in Andorra.

Centralising management. As wealth grows, holding assets in a personal capacity becomes complex. A single structure simplifies managing several investments, tracking income, future acquisitions, bringing in new shareholders, and gradual succession planning.

Separating personal wealth from investments. An entrepreneur may have one company for their trading activity and a separate structure for their personal assets: overall clarity improves, as does long-term management — and the ups and downs of the business don't spill over into personal wealth.

The general rate of Andorran corporate tax is 10%. Note, however: this doesn't mean all income held through an asset-holding company is automatically taxed at that rate — nor that foreign taxation disappears. Treatment depends on the type of income, the country where the asset is located, the beneficiary's tax residency, the shareholding involved, applicable tax treaties, and the structure chosen.

A prior analysis is therefore essential before any incorporation — that's the basis of our approach.

The two serve different purposes. An asset-holding company holds and manages assets (real estate, investments, cash); a holding company holds shareholdings in other companies — Andorra also provides a special regime, subject to conditions, for companies holding shareholdings, which can allow an exemption on dividends from subsidiaries. In many strategies, the two work together:

There's no universal structure: each set-up needs to match a precise economic and wealth-related reality.

Yes — but the location of the property is key. For real estate located in Andorra, the company can acquire and manage the property subject to applicable authorisations. For real estate located abroad, setting up an Andorran company doesn't automatically move the property's taxation: a property in France, Spain or Switzerland remains subject to local tax rules (income, capital gains, ownership). Tax treaties and each country's legislation need to be examined before any restructuring — see our Andorra vs France and Andorra vs Spain comparisons.

Depending on the investor's profile, an asset-holding company can centralise a portfolio: shares, bonds, cash, financial investments. For an entrepreneur, wealth often extends well beyond real estate: a significant part consists of company shares and shareholdings. This distinction is decisive: holding personal wealth assets falls under an asset-holding company, while holding operating shareholdings is better suited to a holding company and its special regime. It's precisely this distinction that guides the choice — or the combination — of structures.

The company can be financed through capital, a bank loan, or a shareholder current account. Each option has its own consequences:

• capital strengthens equity;
• a bank loan generates interest and requires guarantees;
• a shareholder current account needs to be documented and repaid on consistent terms;
• financing between related companies needs to reflect market pricing.

Personal withdrawals shouldn't be confused with repaying a debt or with a distribution. Clear accounting is essential — that is the purpose of our accounting service.

You don't need to be an Andorran resident to hold a company in Andorra. But having a company in Andorra and personally being an Andorran tax resident are two different things — setting up a company doesn't move your tax residency. For a coherent international project, several things need to be considered together: the residency of the director and shareholders, where management actually takes place, economic substance, double taxation treaties, taxation in the country of departure, and anti-abuse rules.

In many cases, the asset-holding structure is therefore part of a broader relocation project: see our residency guide and, in particular, passive residency, whose required €600,000 investment can be structured around your Andorran assets.

Rather than transferring several assets individually, the company allows ownership of the capital to be organised progressively: bringing children into the capital, continuity of management, allocation between family members, family governance. Andorra levies no inheritance or gift tax — but the taxation of a transfer can depend on several jurisdictions: the donor's country of residence, the beneficiary's, and where the assets are located all remain decisive. Here too, prior planning is what separates a solid structure from an unpleasant surprise.

An entrepreneur owns an operating company, several properties, a financial portfolio, cash to reinvest, and shareholdings. Goal: growth, succession planning, and a possible move to Andorra under consideration. Wealth analysis may lead to separating four functions:

• Operating company — the trading or professional activity;
• Holding company — holding the shareholdings;
• Asset-holding structure — holding investments and other assets;
• Individual ownership — assets for which direct personal ownership remains appropriate.

A clear structure, where each category of assets has its place.

Before choosing between personal ownership and ownership through a company, the calculation needs to cover the structure's whole life cycle:

• share capital;
• incorporation and foreign investment authorisation;
• notary and articles of association;
• transferring the assets;
• acquisition taxation;
• annual accounting;
• bank and registered office;
• filings;
• disposal or dissolution costs.

An asset-holding structure is only justified where its practical and financial benefits durably outweigh its costs.

• setting up a company purely to chase a lower tax rate;
• transferring assets without analysing the tax impact of the transfer;
• overlooking the shareholders' tax residency;
• ignoring international tax treaties;
• confusing an asset-holding company with a holding company;
• underestimating accounting and filing obligations;
• setting up a structure without sufficient economic substance;
• holding foreign property without analysing local taxation;
• overlooking the anti-abuse rules of the country of origin.

At ProGestió, we favour coherent, well-documented structures tailored to the client's actual situation — never off-the-shelf legal products.