Setting up an SA in Andorra: capital, shareholders and governance

The €60,000 capital, its payment arrangements, the various forms of management, and registration fees are confirmed by official information from the Andorran Government.

The SA has legal personality distinct from that of its shareholders: it enters into contracts, invoices clients, may employ staff, and takes on obligations in its own name. As a rule, the company's debts don't therefore directly become the personal debts of its shareholders. This legal personality is acquired once the incorporation deed is signed before an Andorran notary and registered with the Companies Register. Capital is divided into shares, whereas an SL's capital is divided into quotas.

The articles of association must set out, among other things, the amount of capital, the number of shares, their nominal value and numbering, any class or series, the structure of the management body, powers of representation, the corporate purpose, and the company's registered office. These aren't mere formalities: they determine how power is distributed, investors' rights, and the conditions under which the shareholder base can evolve.

Contrary to a common misconception, "public limited company" doesn't mean shareholders' identities are hidden: all shares must be registered, numbered, and attributed to their genuine holder — the law prohibits registering shares in the name of a nominee. The company must keep a shareholder register, a record of transfers, and a beneficial ownership register (name, date of birth, nationality, country of residence, nature and extent of the control exercised).

The public limited company form becomes relevant when the project has at least one of the following features:

• several investors with different interests — contributions of capital, skills or assets on terms that need to be precisely defined;
• a gradual opening-up of the capital — the number and value of shares, subscription rights, dilution and transfer rules set out from the outset, to avoid having to rebuild governance at the first funding round;
• collegiate governance — a board of directors suited to representing several shareholder groups or splitting responsibilities between managers;
• significant capital — where initial needs naturally exceed €60,000, this threshold stops being a constraint;
• a regulated activity — certain financial entities, insurance and reinsurance companies, credit institutions, or gaming-related activities require the SA form, sometimes with capital well above €60,000.

Conversely, for an activity run by a single entrepreneur, with no plans to bring in investors and no regulatory requirement, an SL or SLU remains simpler to manage. An SA isn't automatically more credible with a bank, more tax-efficient, or more protective for its director: setting one up purely to display a large capital can create unnecessary formality and cost. The right structure is the one that matches actual financing and governance needs — see our comparison of company types in Andorra.

An SA can become a sole-shareholder company when one shareholder acquires all the shares. This must be registered with the Companies Register within one month — otherwise, the sole shareholder can become personally, jointly and indefinitely liable for debts incurred during the undeclared sole-shareholder period.

The minimum amount must appear in the articles of association and be fully subscribed and paid up: founders can't simply promise to pay it in later.

Cash contribution — shareholders pay the funds into a bank account opened in the name of the company being formed. The bank then issues a certificate showing the account opened, the amount deposited, the identity of the founders, and the number or percentage of shares allocated to each one, which is then passed to the notary.

Non-cash contribution — capital can also include assets or rights capable of being valued in economic terms, described and valued in the deed; an independent expert's report may be required. Future work or promised services alone don't constitute a contribution to capital.

Share premium — the amount paid by an investor may exceed the nominal value of the shares allocated; the difference forms a premium, paid in full at subscription, which allows a new investor to be brought in without artificially setting too high a nominal value.

Capital is not an expense: it becomes an asset of the company and, once registration is complete, can fund justified business expenses — but it isn't a sum a shareholder can freely withdraw for personal use.

Structuring capital isn't just about choosing a percentage for each investor. The articles of association must set out the number of shares, their nominal value, and their numbering; the law also allows different classes to be created based on the rights attached to shares, and different series based on their nominal value.

A structure that's too simple can become a source of deadlock once interests diverge; an unnecessarily complex one can, conversely, slow down every decision.

A board of directors isn't mandatory, except where sector-specific rules require it. A standard SA can adopt one of four forms:

A sole director simplifies representation but concentrates responsibility. Joint directors add security to certain transactions at the cost of sometimes slower decision-making. Directors acting separately make day-to-day operations easier but require a high level of trust. A board of directors, a collegiate body of at least two members, must have a chair chosen from among its members and a secretary who need not be a director; it can delegate certain functions, subject to non-delegable powers.

Shareholders meeting at a general meeting decide, among other things, on approving the accounts, allocating profits, appointing or removing directors, appointing an auditor where required, amending the articles of association, and capital increases. An ordinary general meeting must be held every year within six months of the start of the new financial year; for an SA, notice must normally be given at least 21 calendar days in advance, and, unless waived under the articles, published twice in a widely circulated Andorran newspaper.

The articles of association form the official rulebook for the company: the powers of its bodies, representation rules, rights attached to shares, decision-making arrangements, restrictions on transfers, how meetings are run, and directors' remuneration. They're incorporated into the notarial deed and registered with the Companies Register.

The shareholders' agreement complements the articles and governs the internal relationship between some or all of the investors: reserved decisions, funding commitments, information rights, appointment of managers, lock-up periods, pre-emption rights, joint exits, share valuation, deadlock situations, the death or incapacity of a founder, non-competition, and dispute resolution. The law specifies that a shareholders' agreement is only enforceable against the company or third parties if it has been notified to them and expressly accepted — the articles and the agreement therefore need to be drafted together, without contradicting each other.

Shares in an Andorran SA aren't transferred like freely traded listed securities: the sale must be recorded in a notarial deed before an Andorran notary, filed with the Companies Register, and the new shareholder then entered in the internal register. The articles of association can include restrictions — prior approval, priority for existing shareholders, a lock-up period, a valuation method — without making the shares practically non-transferable. Where the buyer is foreign, direct investment rules also need to be checked before signing.

A capital increase allows a new investor to come in, an acquisition to be financed, equity to be strengthened, or growth to be supported. Existing shareholders generally have a pre-emptive subscription right, which the general meeting can exclude under statutory conditions and if this possibility was flagged in the notice of meeting. The transaction must be decided at a general meeting, recorded in a notarial deed, and registered — and, where direct foreign investment is involved, may require prior authorisation, except for certain capitalisations of voluntary reserves.

The articles of association can set stricter quorum rules than the legal minimums. Both structures are subject to the same general audit thresholds and the same standard corporate tax rate: an SA shouldn't therefore be chosen to obtain a lower tax rate than an SL. Its value lies in how capital and governance are organised — including as a vehicle for a holding company, since "SA" designates a legal form while "holding" describes the function the entity performs. Andorra's shareholding regime has its own conditions, covered separately on our dedicated page.

The general corporate income tax rate applicable to Andorran-resident companies is 10%, on taxable profit rather than turnover. The general IGI rate is 4.5% — other rates or exemptions may apply depending on the nature of the transaction.

Where the company has shareholders, subsidiaries or clients abroad, it's also necessary to look at tax treaties, withholding taxes, the place of effective management, permanent establishments, transfer pricing, directors' tax residency, and how dividends are taxed for the shareholder. Registering a company in the Principality doesn't automatically shift to Andorra activities that are actually carried out or managed from another state — see our taxation in Andorra guide.

Official fees checked in August 2026; municipal or sector-specific costs may be added depending on the parish and authorisations required. The €60,000 capital needs to be kept separate from costs: it belongs to the company once incorporated.

There's no single guaranteed timeline. The relevant authority has a maximum of two months to decide on a foreign investment application, extendable by a further month. For planning purposes, a standard, complete file can reasonably take around two to three months — a practical estimate that can be exceeded where several foreign companies are involved or the activity is regulated.

Full ownership by one or more foreign investors is possible, subject to foreign investment authorisation, a lawful and documented source of funds, sector-specific rules, and bank acceptance. The general regime provides an exemption from authorisation where the investor doesn't exceed 10% of the capital or voting rights and total foreign ownership stays below 25%; beyond the individual 10% threshold, later changes to the shareholding remain subject to the authorisation regime.

A company involving direct foreign investment must also carry out genuine economic activity within 18 months of incorporation — assessed based on, among other things, the opening of a trading operation, the filing of accounts, and consistency between actual volumes and the project presented. Finally, foreign investment does not grant a right of residency, even where the investor becomes a director: active residency follows a separate process.

Once trading, an SA must maintain orderly accounts, keep supporting documents for six years, prepare and approve annual accounts, hold the ordinary general meeting, file the accounts, submit tax and social security returns, and keep the shareholder and beneficial ownership registers up to date. The management body must prepare and sign the accounts and the proposed allocation of profits within six months of the year end. The company must also allocate 10% of its annual positive result to the legal reserve until it reaches 20% of share capital — with €60,000 of capital, the minimum legal reserve target is therefore €12,000.

The SA form does not automatically trigger an audit requirement. Accounts must be audited where, over two consecutive financial years, the company exceeds at least two of the following three thresholds: total assets above €3.6 million, turnover above €6 million, or a headcount above 50 employees. An audit is also required where turnover exceeds €10 million over two consecutive financial years. Our accounting in Andorra service tracks these deadlines.

Yes: an SL can later be converted into an SA, provided the conditions of the new form are met — in particular the minimum capital. Conversion requires a resolution of the general meeting, a closed balance sheet, an amendment to the articles of association, a notarial deed, and registration with the Companies Register; the company's legal personality is preserved. This makes it possible to start with an SL where an SA isn't yet justified, and adapt the structure later as investors come on board.

• choosing the SA purely for image reasons — a larger capital guarantees neither bank acceptance nor commercial success;
• assuming shareholders remain anonymous, when genuine holders and beneficial owners must be identified;
• using generic articles of association, a common source of deadlock at a funding round or in a dispute;
• failing to plan for dilution when a new investor comes in;
• confusing a board of directors with a legal requirement;
• assuming an audit is always mandatory from the first year;
• treating the capital as a personal sum that can be withdrawn at will;
• overlooking authorisations when selling shares to a foreign investor;
• confusing shareholding with residency;
• leaving the structure with no activity, when genuine activity must be demonstrated within the statutory timeframe.