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Company or self-employed, IRPF, IGI, CASS contributions: how a freelancer structures their tax setup in Andorra.
Content reviewed by the legal and tax team of ProGestió Andorra — Last updated:
A consultant, developer or content creator considering Andorra almost always asks the same question: should they set up a company or settle as a self-employed worker? The answer depends on turnover, the type of clients, and the level of structuring desired. But before deciding, it’s essential to understand three regulatory building blocks that apply differently depending on the chosen status: IRPF on income, IGI on activity, and CASS contributions. These three elements determine the real cost of settling in Andorra, far more than the oft-cited “10% rate” argument alone.
A freelancer settling in Andorra can choose between two distinct legal structures.
The first is working on one’s own account (self-employed), without a company: the professional invoices in their own name, declares their net business income under IRPF, and pays CASS contributions on that basis. This is the simplest option administratively, suited to an individual activity without employees.
The second involves setting up a commercial company, most often an SL (societat limitada), which invoices clients, pays the director a salary subject to IRPF and social contributions, and distributes the remaining balance as dividends. The minimum share capital for an SL is 3,000 euros, and 60,000 euros for an SA, according to information published by the Govern d’Andorra on company incorporation.
The choice between the two is not just a matter of incorporation cost: it also determines the route to obtaining residency, the applicable tax regime, and how personal income is ultimately taxed.
Whether working as self-employed or paying oneself a salary through a company, personal income received by an Andorran tax resident is subject to IRPF (impost sobre la renda de les persones físiques). Individuals who are tax residents in Andorran territory are required to file a return for this tax if they earn income from economic activities, regardless of the amount.
The scale is structured in three brackets. The IRPF tax rate is 10%. However, the equivalent rate will be 5% for income between 24,000 and 40,000 euros, applied as a maximum rebate of 800 euros. In practice, this means:
| Annual income bracket | Effective rate |
|---|---|
| €0 to €24,000 | 0% |
| €24,000 to €40,000 | 5% |
| Above €40,000 | 10% |
This scale applies to employment income, income from economic activities (the case of the self-employed), and income from real estate capital. Income from movable capital follows a slightly different logic: the first 3,000 euros of savings income are exempt, and beyond this threshold, savings income is taxed at a flat rate of 10%. This is notably what makes Andorran dividends attractive for a consultant structured as a company: dividends from Andorran companies received by Andorran tax residents are exempt from IRPF.
Concretely, for a consultant invoicing 60,000 € of net income through an Andorran company, the tax strategy often consists of balancing between salary (subject to progressive IRPF and CASS contributions) and dividends (exempt once corporate tax has been paid by the company). This balance must be calibrated with tax advice, as it also determines the level of social coverage.
If the freelancer chooses the company route, their profits are subject to corporate income tax (IS) before any distribution. According to information published by the Govern d’Andorra, the general tax rate for corporate taxpayers is 10%. Reduced rates exist for certain specific activities (international trade, innovation), but their concrete application depends on precise conditions that must be verified on a case-by-case basis before any planning.
Operating through a company also involves formal bookkeeping, annual accounts, and filing with the Registre de Societats — obligations that self-employment does not impose.
IGI (impost general indirecte) is the Andorran equivalent of VAT. IGI is the tax that burdens consumption by taxing the supply of goods and provision of services carried out by businesses or professionals, as well as the import of goods.
Andorra applies several rates depending on the nature of the transaction:
Persons whose supply of goods and services does not exceed the annual sum of 40,000 euros are not considered entrepreneurs or professionals for the purposes of this tax, unless they expressly opt to be treated as such. A freelancer starting out with modest turnover can therefore remain outside the scope of IGI as long as they stay under this threshold — an important point for a consultant in the launch phase.
Beyond this threshold, registration for IGI becomes mandatory. A simplified regime also exists: entrepreneurs or professionals whose supply of goods and services does not exceed the annual sum of 100,000 euros may access it, upon prior request via a specific form.
The frequency of returns depends on turnover: an annual business turnover (cifra annual de negocis) below 250,000 euros requires a half-yearly return (July and January); below 3,600,000 euros, the return is quarterly; from 3,600,000 euros onward, it becomes monthly.
CASS (Caixa Andorrana de Seguretat Social) is the body that covers health, maternity and retirement in Andorra. Every self-employed person must be affiliated to it. Workers operating on their own account are required to contribute from the start until the cessation of the economic activity. If a company is set up, this obligation does not start immediately: the obligation to contribute begins 30 calendar days after registration with the Registre de Societats.
The contribution base is not a fixed amount: it is calculated relative to the average monthly overall wage recorded in the previous year, according to several tiers. Workers must contribute according to the contribution bases set out in Llei 11/2023, which are 25%, 50%, 62.5%, 75%, 100%, 125% and 137.5% of the average monthly overall wage of the previous year, depending on declared net income and, in some cases, turnover.
Based on the official figures published by CASS, the following amounts apply for the 100% contribution tier:
| Contribution tier | Contribution base | Monthly contribution |
|---|---|---|
| 25% | €668.13 | €146.99 |
| 100% | €2,672.52 | €587.95 |
These amounts result from a total rate applied of 10% for the general branch and 12% for the retirement branch, on the contribution base of €2,672.52, giving a total contribution of €587.95 at the 100% tier. The reduced tiers (25%, 50%, 62.5%, 75%) are optional and subject to income conditions, while the higher tiers (125%, 137.5%) are mandatory beyond certain net income or turnover thresholds.
For a consultant starting their activity with modest income, the option to contribute on a reduced base significantly eases the social security burden in the first months. Conversely, an already well-established freelancer must check whether they fall into the obligation to contribute at the higher tiers.
There is no universal answer, but a few practical guidelines can help orient the choice.
Working as self-employed suits well a freelancer who is starting out, whose turnover remains moderate, who does not invoice clients requiring a corporate structure, and who wants to limit accounting formalities. Net income is taxed directly under IRPF according to the scale seen above, and CASS contributions follow the tiers presented.
The company becomes relevant when the activity grows, when the consultant wishes to balance between salary and dividends to optimize personal taxation, or when they aim to obtain active residency through the route of investment in an Andorran company rather than through the liberal profession route.
Living in Andorra as a freelancer requires obtaining a residence and self-employment work permit. The Govern d’Andorra distinguishes two main scenarios in this procedure.
Route 1 — via a company. One must have obtained the corresponding foreign investment authorization to set up an Andorran company in which one holds a stake exceeding 34%, have legally incorporated the reference company, hold a position on that company’s governing body, and effectively deposit with the Andorran Financial Authority (AFA), at the very moment the application is submitted, the sum of fifty thousand (50,000 euros) unremunerated.
Route 2 — as a liberal professional. For a consultant, lawyer, architect or any regulated profession, the alternative route consists of obtaining authorization to practice the liberal profession from the Govern and, where applicable, registering with the relevant professional association, within three months of submitting the application.
In both cases, the initial authorization is issued for one year, then renewable. The first authorization is for one year, renewable three times for periods of two years; after seven years, successive renewals are issued for periods of ten years, except under specific bilateral agreements. Residency must be effective and permanent: the holder undertakes to establish their actual domicile in Andorra, a condition inseparable from tax residency itself.
A content creator or developer invoicing clients located outside Andorra remains subject to the same rules: IRPF on worldwide income, IGI on invoiced services (if the 40,000 € threshold is exceeded), mandatory CASS contributions. The location of clients does not change Andorran liability, as long as the provider is a tax resident in Andorra. However, the international nature of the client base may impact the treatment of IGI depending on the place of consumption of the service — a point that deserves individualized analysis with a tax advisor, particularly for cross-border digital services.
Whether self-employed or operating as a company, rigorous bookkeeping is essential: it determines the calculation of net income subject to IRPF, the CASS contribution base, and the IGI return where applicable. A company is also required to file annual accounts with the Registre de Societats. These obligations, although lighter than in France or Spain, should not be underestimated: a filing error can trigger an adjustment covering several fiscal years.
| Criterion | Self-employed (own account) | Company (SL) |
|---|---|---|
| Capital required | None | €3,000 minimum |
| Income taxation | IRPF (0% / 5% / 10%) | IS (10%) then IRPF on salary, dividends exempt |
| IGI | Applicable beyond €40,000/year | Applicable beyond €40,000/year |
| CASS | Tiers 25% to 137.5% of average monthly overall wage | Same, on director’s salary, from 30 days after registration |
| Residency route | Liberal profession | Investment (stake > 34% + AFA deposit) |
Several pitfalls regularly recur among freelancers who settle without guidance. The first is underestimating IGI, thinking it only concerns physical shops: once turnover exceeds 40,000 € per year, registration becomes mandatory, regardless of the nature of the service. The second is confusing the headline IRPF rate of 10% with the rate actually paid, when the progressive scale often brings the effective burden well below that for moderate incomes. The third is choosing a default CASS contribution base without checking whether a reduced tier applies, which can represent a difference of several hundred euros per month.
Can a French or Spanish freelancer invoice from Andorra without being tax resident there? No. To benefit from Andorran taxation, one must be a tax resident in Andorra, which requires effective settlement and a valid residence permit. Invoicing from Andorra without residing there exposes one to a tax adjustment in the country of actual tax residence.
Is it mandatory to set up a company to settle in Andorra as a freelancer? No. Working on one’s own account, without a company, is a legal and common route, particularly for liberal professions. The choice depends on targeted turnover, clientele, and desired compensation strategy.
What IGI rate applies to a consulting or development service? The general rate of 4.5% applies to almost all consulting, development and content creation services, provided the liability threshold of 40,000 € in annual turnover is exceeded.
How much does CASS contribution cost for a freelancer just starting out? It depends on the applicable tier. At the reduced tier of 25%, the monthly contribution amounts to about 147 €. At the reference tier of 100%, it reaches about 588 €. The applicable tier depends on net income and, in some cases, declared turnover.
Are dividends paid by an Andorran company taxed in Andorra? No, dividends distributed by an Andorran company to an Andorran tax resident are exempt from IRPF, which explains the appeal of structuring as a company for higher incomes, once corporate income tax has been paid upstream.
What is the difference between active residency by investment and by liberal profession? The first requires setting up a company with a stake exceeding 34% and a deposit of 50,000 € unremunerated with the Andorran Financial Authority. The second relies on obtaining authorization to practice the liberal profession and, if applicable, registration with the competent professional association, without any financial deposit requirement.
Figures and thresholds based on regulations in force at the date of publication (22 September 2026), subject to legal changes. To be verified with your advisor before any decision.
To go further: Active residency in Andorra, Setting up an SL in Andorra, Liberal profession in Andorra, Andorran taxation, IGI in Andorra.
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