---
title: "Andorra holding company: tax, requirements, risks (2026)"
url: https://andorrefiscal.fr/en/business/holding-company
description: "Holding company in Andorra: holding SL or SA, 10% corporate tax, dividends and gains received, authorisation, substance, French scrutiny."
updated: 2026-10-11
language: en
publisher: Andorre Fiscal (https://andorrefiscal.fr)
---

# Holding company in Andorra: what the law allows, what France looks at

> Markdown version of the page https://andorrefiscal.fr/en/business/holding-company (Andorre Fiscal), up to date as of 11 October 2026. To cite this page, use its address: https://andorrefiscal.fr/en/business/holding-company

An Andorran holding company is an ordinary SL or SA that holds equity interests: it pays corporate income tax of 10%, but the dividends and capital gains it receives from its subsidiaries are exempt from it, subject to conditions. It gives no right to reside in Andorra and, for a shareholder who remains resident in France, several French anti-abuse rules may apply: here is what the texts of both countries say, and what needs to be validated.

By [the Andorre Fiscal editorial team](https://andorrefiscal.fr/en/about#redaction) · Verified on 11 October 2026 · [12 official sources](https://andorrefiscal.fr/en/business/holding-company#sources)

- **10%** corporate income tax, general rate
- **5% and 1 year** stake and holding period to exempt the dividends and capital gains received
- **€851** annual fee for an SL without a business licence (€935.50 for an SA)
- **10%** stake: the Article 123 bis threshold for a shareholder resident in France

## Key points

- Andorran law provides no specific form for holding companies: you set up an SL (at least €3,000 of capital) or an SA (€60,000), subject to corporate income tax of 10%.
- Dividends and capital gains received are exempt if the holding company has held at least 5% of the subsidiary for one year and the subsidiary, if foreign, is taxed at a nominal rate of at least 5%; a pure holding company can also apply for the special regime of Article 38.
- A non-resident shareholder must in principle obtain a foreign investment authorisation; a pure holding company does not have to obtain a business licence, but it files its accounts and pays an annual fee of €851 (SL) or €935.50 (SA).
- The holding company gives no right to reside; a passive resident may, however, act as an unpaid director of the companies in which they hold at least 50%.
- For a shareholder who remains resident in France, the holding company may fall under the “privileged tax regime” and Articles 123 bis or 209 B of the French General Tax Code: an analysis to be validated by a professional.

## What is a holding company in Andorra?

It is an ordinary Andorran company whose main, or exclusive, activity consists of holding and managing equity interests in other companies. Andorran law does not create a special legal form: Llei 20/2007 only recognises the [SA and the SL](https://andorrefiscal.fr/en/glossary#sl-sa) (art. 1), with minimum capital of **€60,000** for an SA and **€3,000** for an SL (art. 14). A single-shareholder company adds the letter U to its abbreviation: SAU or SLU (art. 2).

Two uses can be distinguished:

**Group holding company — It holds operating companies**

- Receives dividends from Andorran or foreign subsidiaries
- Can form a tax group with its Andorran subsidiaries held at least 75% (Llei 95/2010, art. 25)

**Asset-holding company — It manages its shareholder’s assets**

- Holds securities, investments, sometimes real estate
- Does not have to obtain a business licence if its purpose is exclusively asset management
- Pays the annual fee for asset-holding companies

A company is tax resident in Andorra as soon as it is incorporated there, has its registered office there or has its place of effective management there, that is, the place where the general management and control of all its activities are exercised (Llei 95/2010, art. 7). This last criterion matters a great deal for a shareholder who lives in France.

## Dividends and capital gains received: the Article 20 exemption

A holding company pays [corporate income tax in Andorra](https://andorrefiscal.fr/en/tax/andorra-corporate-tax#taux) at the general rate of 10% (Llei 95/2010, art. 41), but the income from its equity interests is fully exempt from it when the conditions of Article 20 are met. The exemption covers dividends, capital gains on disposal and income from the liquidation of a subsidiary or from certain reorganisations.

**The exemption for income from equity interests (Llei 95/2010, art. 20)**

| Condition | Rule in Article 20 |
| --- | --- |
| Holding | At least **5%** of the capital, equity or voting rights, directly or indirectly |
| Duration | Held without interruption for **one year**: before the distribution, or afterwards to complete the year; before the disposal for a capital gain |
| Foreign subsidiary | Subject, with no possible exemption, to a comparable tax at a nominal rate of at least **5%**; condition deemed met if it is resident in a country linked to Andorra by a tax treaty |
| Andorran subsidiary | Subject, without exemption, to the general rate of 10% |
| Proof | Borne by the holding company that claims the exemption |

Indicative calculation: the law requires a nominal rate of at least 50% of the general Andorran rate of 10%, i.e. 5%.

Four limits apply: no exemption for the capital gain on shares in a company at least half of whose assets consist of immovable property located in Andorra, nor for a dividend that is deductible for the company paying it; no deduction of expenses relating to the exempt holdings, nor of capital losses on the disposal of those shares.

> **Good to know: The 2024 tax floor**
>
> Since 2024, the tax after deductions cannot fall below 30% of the gross tax calculated on the positive tax base (art. 43.2). On our reading, exempt income does not enter into this base: the floor targets the holding company’s other income, interest or management fees for example. See [minimum taxation of companies](https://andorrefiscal.fr/en/tax/andorra-corporate-tax#minimum).

Finally, if the holding company holds more than 50% of a foreign subsidiary whose tax is less than half of the Andorran tax, that subsidiary’s passive income (dividends, interest, royalties, property income) is added to the holding company’s tax base, unless the subsidiary carries on a genuine economic activity or its passive income is limited to a third of its income (tax transparency, art. 17 bis).

## The special regime for holding companies

An SA or SL whose **exclusive** purpose is managing and holding equity interests in companies, Andorran or foreign, can apply for the special regime of Article 38 of Llei 95/2010. Its shares must be registered shares. Dividends received and capital gains on the disposal of its holdings are exempt, with the same limits as under Article 20.

**Ordinary regime — Article 20**

- Any company subject to the tax
- Holding of at least 5%, held for one year
- Foreign subsidiary taxed at a nominal rate of at least 5%

**On application — Article 38**

- Exclusive purpose: holding and managing equity interests
- The text repeats neither the 5% threshold nor the one-year period
- Foreign subsidiary taxed at a nominal rate of at least 4% (40% of the Andorran rate)
- Portfolio detailed in the notes to the accounts; tax return due even with no tax to pay

In both cases, the condition on the taxation of the foreign subsidiary is deemed met when it is resident in a country linked to Andorra by a tax treaty. Under the Article 38 regime, profits distributed out of exempt income are also exempt for a shareholder that is an Andorran company. This regime was reformed by Llei 6/2018: the former regime for companies holding foreign equity interests came to an end after a transitional period that ended on 31 December 2020.

## Setting up a holding company: authorisation, accounts and costs

The holding company is incorporated like any other company, up to its entry in the [Companies Register](https://andorrefiscal.fr/en/glossary#registre-societats): see our guide to [setting up a company in Andorra](https://andorrefiscal.fr/en/business/set-up-a-company). Three points are specific to it:

- **The foreign investment authorisation.** A non-resident shareholder needs it to acquire shares, except for a holding of 10% or less when foreigners hold less than 25% of the capital (Llei 5/2025, art. 6.1). A holding company held 50% or more by foreigners is itself a foreign investor for its acquisitions of holdings and its property purchases in Andorra (art. 1.1).
- **No business licence to obtain.** A foreign-owned company must prove an effective activity within 18 months, but registering a business licence is not required of a company whose exclusive purpose is managing its own assets or holding shares or participations (regulation of 9 April 2025, art. 7).
- **The other evidence is still required.** Annual accounts filed, at least 75% of the amounts announced in the authorisation application (turnover, expenditure or assets), beneficial owners identified, an account in use with a bank established in Andorra (same article).

**Andorran holding company: public amounts at 11 October 2026**

| Public amount | SL | SA |
| --- | --- | --- |
| Minimum capital | €3,000 | €60,000 |
| Fee for entry in the register | €1,016.67 | €1,480.54 |
| Annual fee (asset-holding company or company without a business licence) | €851 | €935.50 |

Capital: Llei 20/2007, art. 14. Fees: the Govern’s “Fase de constitució de la societat” page, consulted on 11 October 2026. The fees of the notary and advisers are not published.

Each year, the company files its annual accounts; under the Article 38 regime, it must also file its tax return even if no tax is due. The calendar is in our guide [accounting and obligations of Andorran companies](https://andorrefiscal.fr/en/business/accounting-and-filings#comptes-annuels).

## A holding company does not give the right to reside

> “Direct foreign investment does not in itself give the investor any right to obtain residence in the Principality of Andorra, even if the investor holds the office of director […].”
>
> — [Llei 5/2025, art. 6.6 (free translation)](https://www.portaljuridicandorra.ad/L2025005)

The holding company can, on the other hand, go hand in hand with a residence permit:

- **passive residency** allows you to manage your own assets and to act as director of the companies in which you hold at least 50% of the capital or equity, provided you are not paid (Llei 9/2012, art. 95.2); shares in Andorran companies are among the eligible assets for the €1,000,000 investment (art. 96.1). See [what passive residency allows](https://andorrefiscal.fr/en/residency/passive-residency#interdits);
- **self-employed residency** requires more than 34% of a company that, within three months, holds a registered and active business licence (art. 38 ter): a pure holding company does not meet this condition. See [active (self-employed) residency](https://andorrefiscal.fr/en/residency/self-employed-residency).

Being an Andorran tax resident within the meaning of the treaty also requires staying there for more than 183 days a year, or having the centre of your economic interests or your main activity there; a residence permit is not enough (protocol, point 2). See [tax residency in Andorra](https://andorrefiscal.fr/en/tax/tax-residency) and, for the sums the holding company then pays you, [tax on dividends in Andorra](https://andorrefiscal.fr/en/tax/dividends-capital-gains#dividendes).

## Shareholder resident in France: what France looks at

As long as you remain tax-domiciled in France, an Andorran holding company does not take you out of French tax. Several rules may apply, depending on the facts: the following analysis is to be **validated by a professional**.

**Andorran holding company held from France: the rules to examine**

| Rule | Situation covered | Possible effect |
| --- | --- | --- |
| Privileged tax regime<br>CGI, art. 238 A | Entity taxed abroad at a level 40% or more lower than French tax | Makes the following rules applicable |
| Article 123 bis<br>CGI | Individual domiciled in France holding at least 10% of a privileged entity whose assets are mainly financial | Profits of the entity deemed to be the shareholder’s income from movable capital, in proportion to their rights |
| Article 209 B<br>CGI | French company holding more than 50% of a privileged entity | Profits of the entity taxed in France, unless the safe-harbour clause applies |
| Abuse of law<br>LPF, art. L64 and L64 A | Sham act, or act with an exclusively or mainly tax motive | Act disregarded by the tax authorities |
| Place of effective management<br>Treaty, art. 4 | Company resident in both States | Resident only in the State where it is actually managed |

Summary of the texts; their application is assessed case by case.

With a corporate income tax of 10%, an Andorran company is in principle subject to the [privileged tax regime within the meaning of French law](https://andorrefiscal.fr/en/tax/is-andorra-a-tax-haven#regime-privilegie), according to our analysis. For a holding company that mainly receives exempt dividends and capital gains, the comparison with the tax it would have paid in France is not settled by the texts we have read: this is the first point to have examined.

Article 123 bis targets an entity whose assets consist mainly of securities, receivables, deposits or current accounts: this is the profile of an asset-holding company, and its exception for entities established in the European Union does not concern Andorra. The safe-harbour clause of Article 209 B, for its part, is presumed to be met in the case of an effective industrial or commercial activity, which a pure holding company does not carry on.

> **Caution: Substance cannot be decreed**
>
> A holding company managed from France, with no resources or decisions in Andorra, accumulates the risks: French residence of the company, taxation of the shareholder, abuse of law. The evidence to gather is detailed in our guide to [domiciling your company in Andorra](https://andorrefiscal.fr/en/business/economic-substance).

## Holding a French company through an Andorran holding company

It is possible. On the dividends that the French subsidiary pays to its holding company, France may levy a withholding tax, capped at **5%** of the gross amount if the holding company, as beneficial owner, directly holds at least 10% of the subsidiary’s capital, and at **15%** in other cases (treaty, art. 10). To this end, the holding company presents a certificate of residence certified by the Andorran tax administration (art. 27).

In Andorra, these dividends are in principle exempt under Article 20, France being linked to Andorra by a treaty. On our reading, the French withholding tax then remains the only tax paid, with no tax credit available in Andorra.

> **Caution: Three treaty clauses to have examined**
>
> - a benefit is denied if obtaining it was one of the principal purposes of the arrangement (art. 25(1)(a), from the multilateral instrument);
> - it may be denied if the holding company is not the beneficial owner of the dividends (art. 25(1)(b));
> - where an item of income is taxed in the other State on only a fraction of it, the benefit applies only to the part taxable without exemption (art. 25(2)). We have not found any published administrative guidance on its scope for dividends exempt in Andorra: have it validated before relying on the 5% rate.

On resale, the capital gain on a holding giving entitlement to 25% or more of the profits of a French company may be taxed in France (art. 13(4)), as may the gain on shares in a company more than 50% of whose value derives from immovable property located in France (art. 13(1)(b)). The other rules are in our guide to the [France–Andorra tax treaty](https://andorrefiscal.fr/en/tax/france-andorra-tax-treaty#placements).

## Transferring your French holding company to Andorra

Legally, Andorra accepts that a foreign company may transfer its registered office there and take Andorran nationality, if the law of its State of origin allows it to retain its legal personality (Llei 20/2007, art. 3); the operation requires a [foreign investment authorisation](https://andorrefiscal.fr/en/business/foreign-investment#quand). For tax purposes, the cost arises in France: transferring the registered office to a State that is neither a member of the European Union nor a party to the European Economic Area triggers the immediate assessment of corporate income tax, under the rules provided for in the event of the sale or cessation of a business (CGI, art. 221(2), which refers to Article 201).

**Option 1 — Keep the French holding company**

- It remains taxable in France
- Dividends paid to a shareholder who has become an Andorran resident: French withholding tax capped at 15% (treaty, art. 10)
- Watch out for the place from which it is actually managed

**Option 2 — Transfer its registered office**

- Accepted in Andorra if the law of origin maintains legal personality
- Immediate taxation in France (CGI, art. 221(2))
- Foreign investment authorisation

For you, as a shareholder, leaving for Andorra with a significant holding may trigger the [French exit tax on unrealised capital gains](https://andorrefiscal.fr/en/tax/leaving-france-tax-residency#exit-tax), holding company included. The full pathway is described in our guide to [relocating your company to Andorra](https://andorrefiscal.fr/en/business/moving-your-business-from-france#societe-francaise).

## Property holding companies and “SCIs” in Andorra

The société civile immobilière is a form under French law: Andorran company law provides only for the SA and the SL. The corporate income tax law does mention “civil companies” (societats civils), but in order to attribute their income directly to their members (Llei 95/2010, art. 6.3).

To hold Andorran real estate through a company, the main constraint comes from the foreign investment law, which applies to any Andorran company held 50% or more by foreigners:

- it may be authorised to buy a property intended for its own commercial activity (Llei 5/2025, art. 9.3);
- if its capital belongs to a single person, or to relatives linked by marriage, a stable partnership or kinship up to the second degree, it may buy a home within the same limits as an individual, its shareholders being counted within those limits (art. 9.4);
- investments intended for letting a property between a company and persons related to it are prohibited (art. 9.7);
- the capital gain on shares in a company at least half of whose assets consist of Andorran immovable property does not qualify for the participation exemption (Llei 95/2010, art. 20.2).

The taxes due on a purchase are detailed in our guide to [buying an apartment in Andorra](https://andorrefiscal.fr/en/living-in-andorra/buying-property).

## Common misconceptions about Andorran holding companies

> **Common misconception**
>
> “A holding company in Andorra pays no tax.”
>
> **In fact.** It pays corporate income tax of 10% on its taxable income. Only dividends and capital gains on holdings that meet the conditions of Articles 20 or 38 are exempt from it; interest, rents or fees remain taxed, with the floor of 30% of gross tax.

> **Common misconception**
>
> “Putting your shares into an Andorran holding company is enough to stop paying tax in France.”
>
> **In fact.** As long as the shareholder remains domiciled in France, their income remains taxable there, and Article 123 bis of the French General Tax Code may attribute to them the profits of an asset-holding company, even if not distributed. Changing residence means genuinely leaving France: see the pathway for [living off your investments in Andorra](https://andorrefiscal.fr/en/profiles/investor).

## Frequently asked questions

### Is a holding company in Andorra legal?

Yes. An Andorran SL or SA may have the holding of equity interests as its purpose, and the corporate income tax law itself organises the exemption of the dividends and capital gains received. The question arises mainly on the French side: a shareholder who remains resident in France remains taxable there, and an arrangement with a mainly tax motive can be disregarded by the tax authorities.

[Read: Is Andorra a tax haven? › The “privileged tax regime” caveat in French law](https://andorrefiscal.fr/en/tax/is-andorra-a-tax-haven#regime-privilegie)

### Can an Andorran holding company hold a French company?

Yes. France may levy a withholding tax on dividends, which the treaty caps at 5% if the holding company directly holds at least 10% of the capital and at 15% otherwise, on presentation of a certificate of residence. The treaty nevertheless denies its benefits to arrangements of which this is one of the principal purposes, and a clause covering income exempt in the other State still needs to be analysed.

[Read: France–Andorra tax treaty › Dividends, interest, royalties: withholding of 15% and 5% at most](https://andorrefiscal.fr/en/tax/france-andorra-tax-treaty#placements)

### Can you set up a holding company in Andorra without living there?

Yes, with a prior foreign investment authorisation, except for a holding of 10% or less when foreigners hold less than 25% of the capital. But a holding company actually managed from France risks being regarded as resident in France, the State of its place of effective management within the meaning of the treaty.

[Read: Foreign investment › When is prior authorisation compulsory?](https://andorrefiscal.fr/en/business/foreign-investment#quand)

### How much does an Andorran holding company cost each year?

An asset-holding company or a company without a business licence pays an annual fee of €851 for an SL and €935.50 for an SA, according to the Govern. On top of this come the accounting, the filing of the annual accounts and the tax returns, to be handled yourself or entrusted to a professional whose fees are freely set.

[Read: Accounting and obligations](https://andorrefiscal.fr/en/business/accounting-and-filings)

### Can you set up an SCI in Andorra?

Not in that form: the SCI is a creature of French law, and Andorran company law provides only for the SA and the SL. A company held 50% or more by foreigners may be authorised to buy premises for its own activity or, if its capital belongs to one person or one family, a home within the limits applicable to an individual; letting arrangements with related persons are prohibited.

[Read: Buying property](https://andorrefiscal.fr/en/living-in-andorra/buying-property)

### Can you transfer your French holding company to Andorra?

Andorran law allows a foreign company to move to Andorra while retaining its legal personality, if the law of its country of origin permits it, with a foreign investment authorisation. In France, transferring the registered office outside the European Union and the European Economic Area triggers the immediate taxation of the company. If you are leaving yourself, the French exit tax may also apply to your shares.

[Read: Relocating your company › Keep, close or transfer your SARL or SAS?](https://andorrefiscal.fr/en/business/moving-your-business-from-france#societe-francaise)

## Sources

1. [Llei 95/2010 on corporate income tax, consolidated version](https://www.portaljuridicandorra.ad/L2010095) — Residence (art. 7), tax transparency (art. 17 bis), participation exemption (art. 20), tax group (art. 25), holding companies (art. 38), rate and floor (art. 41 and 43), transition under Llei 6/2018.
2. [Llei 20/2007 on public and private limited companies, consolidated version](https://www.portaljuridicandorra.ad/L2007020) — SA and SL (art. 1 and 2), transfer of the registered office (art. 3), minimum capital (art. 14), filing of annual accounts (art. 74).
3. [Llei 5/2025, Title I: foreign investment, consolidated version](https://www.portaljuridicandorra.ad/L2025005) — Foreign investors (art. 1), authorisation, effective activity and no right to residency (art. 6), real estate limits (art. 9).
4. [Regulation of 9 April 2025 on foreign investment](https://www.portaljuridicandorra.ad/R20250409A) — Effective activity: no business licence required of a company managing its own assets or holding securities (art. 7).
5. [Govern: company incorporation phase (Punt Empresa)](https://www.govern.ad/ca/tematiques/empresa-i-emprenedoria/creacio-i-modificacio-d-empreses/punt-empresa/fase-de-constitucio-de-la-societat) — Registration fees; annual fee of €851 (SL) or €935.50 (SA) for an asset-holding company or a company without a business licence.
6. [Llei 9/2012, qualified law on immigration, consolidated version](https://www.portaljuridicandorra.ad/L2012009) — Self-employed residency (art. 38 ter); passive residency: permitted activities and eligible assets (art. 95 and 96).
7. [France–Andorra tax treaty, consolidated version with the multilateral instrument (impots.gouv.fr)](https://www.impots.gouv.fr/sites/default/files/media/10_conventions/andorre/version-consolidee-de-la-convention-avec-andorre-modifiee-par-la-convention-multilaterale.pdf) — Residence of companies (art. 4), dividends (art. 10), capital gains (art. 13), anti-abuse clauses (art. 25), certificate of residence (art. 27), protocol.
8. [French General Tax Code, Article 238 A (Légifrance)](https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000037526846) — Privileged tax regime: tax 40% or more lower than French tax, since 2020.
9. [French General Tax Code, Article 123 bis (Légifrance)](https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000044981506) — Individual domiciled in France holding at least 10% of a privileged entity with mainly financial assets.
10. [French General Tax Code, Article 209 B (Légifrance)](https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000029355796) — French company holding more than 50% of a privileged entity; safe-harbour clause.
11. [French General Tax Code, Article 221 (Légifrance)](https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000041468005/) — Transfer of the registered office outside the European Union and the EEA: tax assessed under Article 201 (sale or cessation of a business).
12. [French Book of Tax Procedures, Articles L64 and L64 A (Légifrance)](https://www.legifrance.gouv.fr/codes/id/LEGISCTA000006180036) — Abuse of law: sham acts or acts with an exclusively, or mainly, tax motive.

Consolidated texts on the Portal jurídic d’Andorra have no official value: only the version published in the BOPA is authentic. [How we verify](https://andorrefiscal.fr/en/methodology).

**General information, not advice.** This guide sets out the rules in force on 11 October 2026, based on official texts. It is no substitute for a professional review of your situation (lawyer, tax adviser, gestoria). Spotted an error or a change? [Write to us](https://andorrefiscal.fr/en/contact).

## Further reading

- [Corporate income tax](https://andorrefiscal.fr/en/tax/andorra-corporate-tax): Rates, regimes and obligations
- [Setting up a company](https://andorrefiscal.fr/en/business/set-up-a-company): SL or SA, capital, steps and timescales
- [Basing your company in Andorra](https://andorrefiscal.fr/en/business/economic-substance): The economic substance required
- [Foreign investment](https://andorrefiscal.fr/en/business/foreign-investment): The prior authorisation
- [Investor, private income](https://andorrefiscal.fr/en/profiles/investor): Assets, dividends, rents
- [France–Andorra tax treaty](https://andorrefiscal.fr/en/tax/france-andorra-tax-treaty): Who taxes what, since 2013