Structuring your group and your residency as a director in Andorra

This page is aimed at someone who already owns one or more companies — in France, Spain, or elsewhere — and is considering establishing residency in Andorra. The intent here is different from "setting up a company": the central issue is reorganising an existing group, not a start-up project. The main difficulty lies in distinguishing what can legitimately be structured from Andorra (holding shareholdings, strategic management) from what needs to stay anchored in the country where the activity is actually carried out — employees, clients, and operating activity can't be artificially moved.

Yes, but the decisive question isn't where you personally live — it's where management decisions are actually made, where employees work, and where services are actually carried out. A director who moves their personal residency to Andorra while continuing to run day-to-day operations from their home country risks having their tax residency challenged, regardless of their Andorran residence card. Active self-employed residency requires a shareholding above 34% and genuine effective management actually carried out from Andorra.

Two structures suit different needs. A pure holding company, eligible for the special regime under Article 38, is limited to holding and managing shareholdings — it can't invoice management fees to its subsidiaries without risking losing the benefit of the regime. A management company, under the general regime, can invoice genuine management or administrative services to subsidiaries, but is then subject to different taxation. The choice depends on what you actually want to do from Andorra: hold shareholdings, or also invoice and manage.

Contributing or selling existing companies to a new Andorran holding company can trigger a capital gain for the person contributing them and taxation in the country of departure — something to look at before the sale, not after. Management fees invoiced to subsidiaries need to correspond to services genuinely carried out and documented, or risk reclassification. Finally, a foreign company still managed from its home country, with its employees and clients based there, can constitute a permanent establishment — keeping part of the tax liability in that country regardless of the director's personal residency.

A director owning a French business, a Spanish subsidiary, and a shareholding in a Swiss company wants to establish residency in Andorra without artificially relocating operating activities. The route typically considered includes: setting up an Andorran parent company to receive the existing shareholdings after analysing the potential capital gain, keeping teams and operations in each country of origin, an active residency application documenting the strategic management genuinely carried out from Andorra, and a country-by-country check of permanent establishment risk and applicable tax treaties.