E‑commerce, SaaS, consulting: running an online business from Andorra

Which residency status for an e-commerce or SaaS business?

For the immigration law, working means carrying on any gainful activity, employed or not, full-time or part-time, other than managing your own assets (Llei 9/2012, art. 22). The fact that all your clients are abroad changes nothing: you need a permit that authorises the activity. Three statuses are suitable.

The international professional and the holder of a remote work authorisation, the digital nomad status, may only carry on the activity provided for by law: any other gainful activity requires a different authorisation (art. 23 and 98). The international professional status is also subject to a quota: Decree 74/2026 of 11 March 2026 reserves for it 10 of the 200 authorisations for residence without work; if this share is used up, the authorisation remains possible as long as the overall quota has not been reached. Passive residency rules out any activity, even remotely. Compare the types of residency in Andorra.

Online shop or SaaS: do you need a company and a business licence?

For self-employed residency, yes: the Andorran company is a legal requirement. For the other statuses, the law does not impose one, but it sets a framework: any person, natural or legal, who carries on a commercial, industrial or service activity must be authorised by the comú of the parish, which passes the application on to the Govern’s Register of Commerce and Industry. An online shop or a consulting business is no exception: the business licence card is a condition of the right to invoice.

A foreign-owned company must also demonstrate an effective activity within 18 months: registered business licence, accounts filed, at least 75% of the forecasts announced and an account with a bank established in Andorra. These obligations of a foreign-owned company come on top of the steps to set up a company in Andorra.

IGI: when are your online services taxed in Andorra?

Llei 11/2012 on IGI determines the place of supply of services according to the client (art. 43 and 44). Above €40,000 of annual turnover, you collect IGI of 4.5% only on services located in Andorra.

Electronic services include in particular website hosting, the supply and updating of software, remote maintenance, the provision of databases and distance learning. A mere exchange of e-mails is not enough to make a service an electronic service (art. 43.3).

For goods, a sale shipped outside Andorra by the seller is exempt from IGI as an export (art. 14). The rates are detailed in our guide to VAT in Andorra (IGI).

EU VAT: business clients, private individuals and sales of goods

Andorra is not part of the European Union: selling to European customers means selling from a third country. The VAT due depends on the customer and on what you sell.

• business clients: the client business generally pays the VAT of its own country under the reverse charge; you invoice without VAT;
• private individuals, electronic, telecommunications or broadcasting services: the VAT of the customer’s country is always due, whatever the supplier’s country. An electronic service is supplied over the internet, in a largely automated way, with minimal human intervention: downloaded or online software, website hosting, digital content. Exchanging e-mails with the client is not enough to make a service an electronic service;
• private individuals, other services (consulting, coaching, intellectual services): the general rule places the service where the supplier is established, and therefore outside the Union, except for rules specific to certain services (immovable property, passenger transport, events, restaurant services, hiring of means of transport). France adds the exception in Article 259 C, presented below;
• private individuals, goods: import VAT is due; for consignments of €150 or less per order, the IOSS allows it to be collected at the time of sale, with a monthly return. A marketplace may, in certain cases, become liable for it in your place.

When the VAT of a Member State is due on a service supplied to a private individual, a business established outside the Union can register in a single Member State, under the “non-Union One-Stop Shop”, and file a quarterly return there for all its supplies to European consumers.

For invoicing your French clients, businesses or private individuals, see our guide to invoicing between France and Andorra.

Platforms and marketplaces: who is liable?

It all depends on who pays you: a platform, private individuals or, for goods, a European marketplace.

The classification of each flow depends on the contracts: have it checked. The status, tax and pathway of a YouTuber or content creator in Andorra are covered in a separate guide.

Selling physical goods: customs, import VAT and dropshipping

A parcel shipped from Andorra to a customer in the Union enters it as an import: the VAT of the country of arrival is due and a customs declaration is required. On the Andorran side, the sale shipped outside Andorra by the seller is exempt from IGI (Llei 11/2012, art. 14).

• Customs union: since 1990, it has covered industrial products, chapters 25 to 97 of the Harmonised System; products of chapters 1 to 24 originating in Andorra are exempt from import duties in the Union;
• IOSS one-stop shop: for consignments of €150 or less, it allows the customer’s VAT to be collected at the time of sale, with a monthly return; a business established outside the Union must appoint an intermediary to use it;
• €3 duty: from 1 July 2026 to 1 July 2028, the Union levies a temporary customs duty of €3 per item on consignments of €150 or less sold at a distance, whatever the VAT scheme. According to the Commission, a customs preference, such as that of the customs union, may be declared, but not if the VAT is collected through the IOSS;
• Marketplaces: for imported goods of €150 or less sold through them, they may be treated as the seller for VAT purposes.

Dropshipping: who sells, and from where?

In dropshipping, the supplier ships directly to the customer, often from a third country, without the goods passing through Andorra. The sale is then not located there for IGI purposes, since the transport does not begin on Andorran territory (Llei 11/2012, art. 42). To a customer in the Union, the consignment remains an import, with the same rules: VAT of the country of arrival, IOSS possible up to €150 and a duty of €3 per item. Your residency status and your business licence must, for their part, cover this activity.

Online shop website: mandatory information, personal data and cookies

A shop operated from Andorra is subject to Andorran law on electronic commerce and data protection. Llei 20/2014 on electronic contracting requires the website to display, in a visible, permanent, clear and free manner (art. 6):

• the identification of the operator: name or company name, address and contact details;
• its registration and tax identification details;
• the authorisations required for the activity and, for a regulated profession, its professional body;
• information on prices and the information required by consumer law and data protection.

Commercial e-mails in principle require the prior consent of the recipient, and cookies require clear information enabling the recipient to consent to them (art. 19 and 20). Llei 29/2021, the qualified law on the protection of personal data, whose application is supervised by the Andorran Data Protection Agency (APDA), requires a legal basis for each processing operation, such as consent or the performance of a contract, and full information for the customer at the time of collection (art. 6, 16 and 46). The European Commission has recognised Andorra as providing an adequate level of protection since its Decision 2010/625/EU of 19 October 2010: data can come from the Union without additional safeguards.

Software and SaaS: the intangible assets regime

Andorran corporate income tax is 10%. A special regime reduces by 80% the tax base corresponding to income from the granting of rights of use or licences, or from the transfer, of patents, utility models and software protected by copyright (Llei 95/2010, art. 23). When all of this income qualifies for the reduction, its taxation falls to about 2% (indicative calculation: 10% applied to 20% of the base). The conditions are demanding:

• the reduction is proportionate to the development expenditure incurred by the company itself (the OECD’s so-called “nexus” approach): outsourcing abroad and acquiring the asset reduce the eligible share;
• the company exploits the asset in its own name and keeps separate accounts for each asset;
• it has resources in Andorra and carries on exploitation, management or promotion activities there;
• it makes a prior application to the Ministry of Finance, which decides within six months; if there is no response, the application may be considered rejected. The regime applies from the financial year of the application.

The French risk: permanent establishment and effective management

An online business has no obvious address; the tax authorities therefore look for where it is really managed and carried on. The France⁠–⁠Andorra tax treaty provides three reference points:

• a company resident in both States is deemed to be resident in the State where its place of effective management is situated (art. 4);
• its profits are taxable in France if it operates there through a permanent establishment: place of management, branch, office, or a person who habitually concludes contracts in its name there (art. 5 and 7);
• the benefits of the treaty may be denied to a transaction one of whose principal purposes is to obtain them (art. 25).

In practice, a director who continues to live and work in France, or a team that signs contracts from France, weakens the company’s Andorran position. The director remains a French tax resident if they meet just one of the criteria of Article 4 B of the French General Tax Code. If you are moving an existing business, follow the steps to relocate your company to Andorra.

Finally, French residents who hold an Andorran company may be affected by the rules targeting entities subject to a “privileged tax regime” (Articles 209 B and 238 A): this classification, given the 10% corporate income tax, is an analysis to be validated by a tax adviser, not an established fact.

Which status suits you?

Four questions to identify the residency status to look into, and its conditions.

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