Holding company in Andorra: complete guide (taxation, exemption, setup, risks on the French side)

In brief

A holding company in Andorra is used to hold shareholdings and to collect their dividends or capital gains in a country where corporate income tax is 10 %verified on 09/10/2026 and where these proceeds are exempt subject to conditions. It is a serious wealth-structuring tool for a person genuinely living in Andorra. It is not a way of continuing to live in France while having your profits taxed in Andorra: French law has precise rules against that.

This page is the complete guide. It is structured so that you can quickly find your case:

1. Who a holding company is for
2. The types of holding company
3. Taxation of the company
4. Taxation of the shareholder
5. Holding company in France or Andorra
6. The creation steps
7. Obligations after creation
8. Risks on the French side
9. Practical cases and profiles
10. Common mistakes and checklist

What is a holding company?

A holding company is a company whose main activity consists of holding shares in other companies (the subsidiaries), sometimes also investments or assets. It receives dividends, interest or the sale price of its shareholdings, then redistributes them to its own shareholders or reinvests them.

Two misconceptions to dispel from the outset:

• A holding company does not create profit. It moves and organises flows that already exist in the subsidiaries.
• A holding company is not a "no-activity" company. Even if purely asset-holding, it must have genuine management, documented decisions and bookkeeping: see substance and effective management.

Who a holding company is for

A holding company makes sense in the following situations, provided that the person who controls it is genuinely established in Andorra:

• The entrepreneur who upstreams profits from one or more operating companies in order to reinvest them elsewhere without distributing them personally.
• The executive preparing the sale of their business who wants to place the sale proceeds in a structure.
• The family that pools shareholdings to organise governance and succession (inheritance and gift).
• The investor who holds several shareholdings in different countries and wants a central point.
• The business owner leaving France who seeks to organise their shares after a departure from France, dealing with the exit tax if it applies.

It makes no sense for a single small activity with no reinvestment plan: see holding company or SL alone.

The types of holding company

The word covers different realities. The definitions below are categories in common use, not Andorran legal statuses.

Taxation of the Andorran holding company

The base rate

The general rate of corporate income tax is 10 %verified on 09/10/2026 (art. 41 of the Llei 95/2010). For the detail of how a company's tax is calculated, see corporate income tax.

The participation exemption

Article 20 of the Llei 95/2010, as rewritten by the Llei 5/2023, fully exempts dividends and capital gains on the sale of shareholdings if three conditions are met:

• a holding of at least 5 %verified on 12/10/2026 of the subsidiary;
• uninterrupted holding for 12 monthsverified on 12/10/2026 before the dividend falls due;
• a non-resident subsidiary that bears at least 50 %verified on 12/10/2026 of the Andorran general rate (condition deemed met for countries linked to Andorra by a treaty; an Andorran subsidiary must be at the general rate).

Excluded or limited are: capital gains on companies whose assets consist of Andorran real estate to the extent of 50 %verified on 12/10/2026 or more, dividends that are deductible for the payer, expenses linked to exempt shareholdings and capital losses on disposal. The burden of proof lies with the taxpayer: see the evidence file and the detail of the conditions.

Withholding taxes with France

For dividends paid by a French company to an Andorran company, the 2013 treaty caps the withholding at 5 %verified on 12/10/2026 if the recipient holds at least 10 %verified on 12/10/2026 of the capital, and at 15 %verified on 12/10/2026 in other cases. For interest, the cap is 5 %verified on 12/10/2026, and for royalties 5 %verified on 12/10/2026. The treaty's anti-abuse clauses may deny these rates if the structure has no economic justification. See the France–Andorra treaty.

Taxation of the shareholder according to residence

The holding company is only one tier. The personal tax of the person who holds it depends on where they are tax-domiciled.

It is this table, and not the corporate income tax rate, that explains the real appeal of the scheme: it works for an Andorran resident. To understand the IRPF, see the Andorran IRPF.

Holding company in France or Andorra: an honest comparison

Many presentations contrast the Andorran rate of 10 %verified on 09/10/2026 with the French rate of 25 %verified on 09/10/2026. This is not the right comparison, because France already has a very favourable regime for holding companies: the parent-subsidiary regime.

In France, dividends from a subsidiary held at at least 5 %verified on 12/10/2026 for at least 2 yearsverified on 12/10/2026 are exempt, subject to the add-back of a share of costs and charges of 5 %verified on 12/10/2026. Capital gains on the sale of shareholdings held for at least two years are, for their part, subject to a share of 12 %verified on 12/10/2026. The standard French corporate income tax rate is 25 %verified on 09/10/2026.

Worked example on 100,000 euros of dividends received by the holding company:

The gap at company level is therefore small: the appeal of Andorra does not lie there. It lies at the level of the individual: the shareholder's tax residence, tax on their dividends, their inheritance, their capital gains. An Andorran holding company held by a French resident does not bring this personal benefit; a shareholder genuinely living in Andorra does.

In other words: if you do not intend to change residence, the French holding company is often safer. If you genuinely move to Andorra, the Andorran holding company fits into a coherent whole. Test your case in the holding company simulator.

How a holding company domiciled in Andorra works

In practice, the structure follows a simple pattern:

1. The subsidiaries (in Andorra or abroad) pay dividends to the holding company.
2. The holding company receives them, with exemption if the conditions are met, after deduction of the withholding tax of the subsidiary's country.
3. It reinvests, lends, or distributes to its shareholder, who is taxed according to their residence.
4. On exit, the holding company sells the shares of a subsidiary and receives a capital gain that is exempt subject to conditions.

It must have a genuine registered office (see domiciliation), a manager who takes decisions from Andorra and properly kept accounts (see gestoria).

The creation steps

The steps below follow the general procedure for incorporating a limited liability company. The details (forms, deadlines, fees) change: confirm them with a notary or an Andorran gestor before starting the file. For the common core, see also the creation steps.

1. Define the purpose and the structure. Which shareholdings, which final shareholder, which exit.
2. Reserve the name. A name certificate is requested from the register; it is valid for a limited period.
3. Obtain the foreign investment authorisation if a shareholder is not resident. The shareholding threshold, the decision period and the silence rule are explained in setting up a company without living there: threshold of 10 %verified on 09/10/2026, period of 2 monthsverified on 09/10/2026 extendable by 1 monthsverified on 09/10/2026, and silence amounts to refusal.
4. Deposit the capital in an Andorran bank. Minimum capital: 3,000 €verified on 09/10/2026 for an SL, 60,000 €verified on 09/10/2026 for an SA.
5. Sign the articles of association before a notary (public deed), with the name certificate, the foreign investment authorisation where applicable and the certificate of capital deposit.
6. Register the company in the companies register.
7. Declare the beneficial owners (see below) and obtain the tax registration number.
8. Activate the commercial licence if the activity requires it, open the operating account and organise the bookkeeping.

The longest part is not the signing: it is the investment authorisation for a non-resident and the opening of the bank account. See company account.

Obligations after creation

Creating the holding company is only the beginning. Each year, it must:

• keep accounting records in line with the Andorran general chart of accounts and prepare annual accounts;
• file or keep its accounts according to the rules in force;
• declare and pay corporate income tax on time;
• keep the register of beneficial owners up to date. The Llei 14/2017 on the prevention of money laundering, as amended by the Llei 37/2021, requires Andorran companies to identify their beneficial owners and report any change. The register is not public: it can be consulted by the authorities and by persons showing a legitimate interest;
• keep the evidence file for the participation exemption.

Risks on the French side

The mechanisms involved (articles 123 bis, 209 B and 238 A of the CGI, abuse of law, effective management) are detailed in holding company and the French tax authorities. Andorra is not on the French list of non-cooperative states and territories published by the order of 15 April 2026, but this absence does not remove the need to examine the substance of the structure. The only case where the analysis changes is a genuine, documented departure: leaving France, then formalities.

Practical cases

The three cases below are illustrative scenarios, without amounts: they serve to understand the logic. To put figures on them, use the holding company simulator.

Case 1: the entrepreneur living in Andorra

They own an operating SL in Andorra and a shareholding in a foreign company covered by a treaty. They create a holding company that holds both. Dividends from the foreign subsidiary flow up to the holding company exempt if the three conditions are met. They then pay themselves, as an Andorran resident, dividends exempt from IRPF. The structure is coherent and defensible.

Case 2: the French executive selling their business

They sell their French company and plan to place the proceeds in an Andorran holding company. If they are still domiciled in France at the time of the sale, the capital gain is taxed in France. If they left France beforehand, the exit tax, the anti-abuse clauses and the exact date of the change of domicile decide everything. The order of operations is critical: it should be prepared with advice before acting.

Case 3: the French resident who wants "a company in Andorra"

They live and work in France and want an Andorran holding company to hold dividends there. The dividends remain taxable in France, effective management is in France, and the anti-abuse rules apply. The structure does not produce the expected effect and creates a risk: the right answer is not to create it or to genuinely move.

Comparing countries: the right criteria

Our comparison of 9 jurisdictions details each country with dated and sourced figures: Luxembourg, Netherlands, Malta, Cyprus, Ireland, Switzerland, United Arab Emirates and Singapore.

Many comparisons line up rates. The criteria that really matter when choosing where to locate a holding company are the following:

• The residence of the final shareholder, which determines personal tax.
• The existence of a tax treaty with the countries of the subsidiaries, which reduces withholding taxes.
• The treatment of shareholdings (exemption, conditions, exclusions).
• The blacklist and the reputation of the jurisdiction with banks.
• The substance required and the cost of maintaining it.
• Banking access.

A country with a very low headline rate but listed among non-cooperative jurisdictions can cost more than a country with a moderate rate. We do not publish a general ranking: a ranking without a profile makes no sense.

How much an Andorran holding company costs

The cost breaks down as follows, with no guaranteed amounts here because they vary by provider:

• Minimum capital: 3,000 €verified on 09/10/2026 for an SL (recoverable, it stays in the company).
• Incorporation costs: notary, register entry, formalities. Ask for a detailed quote.
• Domiciliation and gestoria: annual subscription.
• Bookkeeping and returns: annual fees.
• France–Andorra tax advice: essential if you come from France.

The real cost of a serious holding company lies less in its incorporation than in its upkeep each year. If the expected gain is lower than these recurring costs, the holding company is of no interest.

The most common mistakes

1. Believing that an Andorran holding company is enough to escape French tax while remaining domiciled in France.
2. Not respecting the holding period before the distribution.
3. Forgetting the foreign investment authorisation for a non-resident shareholder.
4. Leaving management in France: effective management may then be located there.
5. Creating the holding company too late: the structure must exist before the operation (sale, distribution) it is supposed to organise.
6. Neglecting the evidence file for the exemption.
7. Letting the company lie dormant without bookkeeping or returns.
8. Mainly holding Andorran real estate without measuring the exclusion from the exemption.

Checklist before deciding

1. Where will you be tax-domiciled, and from what date?
2. Which shareholdings will the holding company hold, at what percentage, since when?
3. In which countries are the subsidiaries, and is there a treaty?
4. Who will take the decisions, and from where?
5. Is the foreign investment authorisation necessary?
6. What is the expected gain, compared with the annual cost of upkeep?
7. What is the planned exit: dividends, sale, succession?

Going further

• Participation exemption: conditions and example
• Evidence file for the exemption
• Holding company or SL alone
• Holding company and the French tax authorities
• Setting up a company without living there
• Dividends of an Andorran company
• The holding company simulator

To find out whether a holding company makes sense in your situation, let's talk about your case.