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Smart Highlights
Corporate Tax
If priority is low corporate tax → definitely Andorra
Businesses in Andorra enjoy 10% corporate tax rate while in Spain there is 25% (15% for new companies temporarily) tax.
Marketing and Expanding
If priority is EU market integration → Spain
Spain is full EU member. Andorra is not EU, although aligned in certain areas (customs union for goods). EU VAT system does not apply in Andorra.
Substance Requirements in 2026
If priority is substance-light holding → Andorra (with caution)
Andorra allows relatively flexible structures.
But substance expectations have increased significantly in recent years. No longer a “zero substance” jurisdiction.
Banking Insfrastructure
If priority is banking stability → Spain
Andorra banking sector is stable but small and conservative. Spain offers deeper financial infrastructure and EU banking passporting.
Detailed Comparison
Compare
🇪🇸 Spain
🇦🇩 Andorra
Personal Tax Regime (Founder Relocation)
Special Regime for New Residents
Beckham Law regime (approx. 24% flat rate up to threshold)
French Impatriate Regime (“Régime des impatriés”) with 30% income exemption on qualifying employment income and possible exemption on certain foreign-source income
Duration
Up to 6 years
Up to 8 years
Scope
Employment income primarily
Primarily employment income and corporate officer remuneration
Limited relief for passive foreign income (conditions apply)
Corporate Taxes
Corporate Income Tax
25% standard rate, 15% for newly incorporated companies (first profitable years)
20%
VAT (Standard Rate)
21%
4,5%
Dividend Withholding Tax (Non-Resident)
19%
0% in most cases
EU Parent–Subsidiary Directive
Fully applicable
Not applicable
Shareholders, Directors & Capital Requirements
Minimum Share Capital
€3,000 (fully subscribed; can be contributed after incorporation)
€3,000 (Capital must be fully paid before incorporation)
Number of Shareholders
Minimum 1
Minimum 1
Corporate Shareholders Allowed
Yes
Yes
Foreign Shareholders
Fully permitted
Allowed but foreign ownership must be approved by the Andorran government prior to incorporation.
Processing time varies (typically several weeks).
Director Residency Requirement
No mandatory Spanish residency
At least one local director often required in practice
Minimum Number of Directors
1 (Administrador Único possible)
1 (Administrador / Director)
Public Notary Required for Incorporation
Yes
Yes
Company Name Approval
Name Reservation from RMC required, processing time is 1-2 days
Name reservation required via Registre de Societats
Approval granted prior to incorporation. Processing time typically several business days.
What Else Important
Director Social Security
Mandatory registration (often RETA regime)
No automatic affiliation to Spanish-style RETA. Managing directors are subject to Andorran CASS social security if economically active.
Special Regional Regime
Canary Islands (REF / ZEC). ZEC reduced corporate tax (subject to substance & conditions)
No
Language in Official Communication
Spanish required in formal filings
Catalan required in official filings
Electronic Tax Filing
Mandatory and fully integrated (Agencia Tributaria)
Digital tax filing available but less centralized
Digital Certificates
Essential for corporate operations
Digital signature required for formal filings
E-Invoicing Evolution
Increasing regulatory intensity
No real-time government-controlled e-invoicing system
Hidden Cost Drivers Beyond Corporate Tax
  • Substance & Residency Expectations
    Spain:
    Operational substance flexible within EU framework.

    Andorra:
    Authorities increasingly require real economic presence.
    Management and control expected to be genuinely located in Andorra.
  • EU Access Limitations
    Full access to EU directives and VAT framework in Spain.

    In Andorra there are no access to EU Parent–Subsidiary Directive and cross-border structuring may trigger treaty reliance only.
  • Banking Due Diligence
    In Spain there is EU banking passport and broader financial ecosystem.
    Andorra provides access to a smaller banking system and enhanced scrutiny for international clients.
  • Reputation & Perception
    Spain is a standard EU jurisdiction while Andorra has Improved reputation, but still scrutinized in certain compliance environments.
Spain vs Andorra: Quick Structural Fit Assessment
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