How to Register a Sole Proprietorship (Compte Propi) in Andorra

Many people choose to work in Andorra as a self-employed professional, known locally as a compte propi, due to the country’s straightforward system, low tax rates, and lighter bureaucracy compared with many European neighbors. Freelancers, digital nomads, and entrepreneurs are particularly attracted to the flexibility and independence this structure provides. At the same time, there are challenges to consider — from securing the appropriate residency permit to making regular social security contributions and complying with local licensing requirements. This guide provides a step-by-step overview of how to register as a sole proprietor in Andorra, along with key obligations and benefits.

Disclaimer: This article is for informational purposes only and is not a substitute for legal advice. Please always check official sources or seek professional guidance before taking action.

What is a sole proprietorship in Andorra?

In Andorra, a sole proprietorship is called “compte propi”. It is equivalent to working as a self-employed worker or independent contractor, without forming a company. Sometimes this may involve creating a trade name (“nom comercial”) or doing business under the name of the individual.

How does a sole proprietorship (compte propi) work in Andorra?

Compte propi vs Limited Liability Company in Andorra

There are alternatives to operating as a sole proprietor, the most common being the Societat Limitada (SL), which is Andorra’s equivalent of a limited liability company. Below is a comparison of how the two structures differ.

Step-by-step guide: How to register a sole proprietorship in Andorra

Step 1: Check if you are eligible to become a compte propi

Andorran citizens over the legal age of 18 can register directly as compte propi. Foreign nationals must hold a valid residence permit that allows economic activity, most commonly the active self-employed residency permit. This permit has requirements such as proof of financial solvency, health insurance, a clean criminal record, and a viable business plan.

Step 2: Choose your business name

If you use your own name, that's usually fine. If using a trade/commercial name, you may need to register or reserve it. Check with the Registre d’Activitats Econòmiques via the Govern d’Andorra. “Nom comercial” registration is part of opening commerce-industry or trade business formalities.

Step 3: Gather required documents

You will typically need:

• Proof of identity (passport or national ID)

• Proof of legal residence permit, if not Andorran citizen

• Certificates of qualifications if the profession is regulated

• Proof of address or premises (office, home address, or business location)

• Trade name registration, if applicable

• Form CASS-0055 for self-employed registration

Step 4: Register with CASS and tax authorities

You must affiliate as a self-employed person with CASS (Caixa Andorrana de Seguretat Social). This includes submitting the relevant form and registering your economic activity with the tax registry / Registre d’Activitats Econòmiques.

Step 5: Pay registration fees and contributions

In Andorra, self-employed workers are covered by the social security system through a dedicated scheme where they pay the full contribution themselves.

The minimum base is tied to the country’s average salary (€2,041.35 in 2025), and a 22% rate applies, which means a monthly contribution of roughly €460. Of this amount, 10% funds the general branch of social security and 12% goes toward retirement.

Because the base adjusts annually, contributions can change year to year, and some self-employed professionals may qualify for CASS reductions that lower their monthly payment.

Step 6: Complete post-registration obligations

After registration, you must:

• Submit annual tax returns (IRPF) between 1 April and 30 September each year

• Maintain accounting and records of income and expenses

• Ensure regular CASS contributions are paid

• Renew licences or registrations as needed

• Notify authorities if you change address, trade name, or cease activity

Financial and tax obligations for sole proprietors in Andorra

• Income tax (IRPF): Sole proprietors pay personal income tax on their net profits. The brackets are: 0% on the first €24,000, 5% from €24,001 to €40,000, and 10% on income above €40,000. This means most freelancers won’t pay IRPF until earnings exceed €24,000.

• Social security contributions (CASS): Self-employed workers must contribute to Andorra’s Caixa Andorrana de Seguretat Social (CASS). In 2025, the standard monthly contribution is €563.42, based on 22% of the average national salary. Contributions are split between the general branch (10%) and retirement (12%). Reduced bases (25%, 50%, 62.5%, or 75%) are available if your turnover or circumstances qualify, lowering the monthly payment.

• IGI (VAT equivalent): Sole proprietors providing taxable goods or services must register for IGI (Impost General Indirecte) if they meet the threshold. The general rate is 4.5%, with reduced rates of 0%, 1%, 2.5%, and 9.5% for specific activities. Many small sole proprietors serving local clients may remain under the threshold, but those working with larger or international clients may need IGI registration.

• Record-keeping requirements: Sole proprietors must keep invoices, receipts, and organised accounts that match their activity and turnover. If your annual revenue exceeds €150,000, you must also prepare and deposit financial statements. Below this threshold, simpler record-keeping applies, but you still need documentation for tax and IGI compliance.

Launch your contracting career and stay compliant with Deel

Registering as a sole proprietor gives you independence, but it also means handling taxes, invoices, and records on your own. Deel’s all-in-one platform helps you manage obligations without the stress. With Deel, you can:

• Automate invoicing and expense tracking with essential bookkeeping tools
• Create, send, and sign localised work agreements
• Keep accurate records for tax season
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• Spend your earnings in USD with the Deel Card
• Access funds early with Deel Advance
• Enjoy contractor perks from 150+ partners

FAQs

What is the minimum capital required to start a compte propi in Andorra?
None. Becoming self-employed is a legal/tax registration status, not a company form with share capital.

Do compte propi need to register for IGI?
Yes, if your goods or services are subject to Andorra’s Impost General Indirecte (IGI). The general rate is 4.5%, with reduced rates (0%, 1%, 2.5%, 9.5%) depending on the activity.

How much are the standard monthly or annual contributions?
In 2025, the standard self-employed CASS quota is €563.42/month, calculated as 22% of the average national salary base. Reduced bases (25%, 50%, 62.5%, 75%) are available if you qualify.

Can a compte propi hire employees?
Yes. If you hire staff, you must register them with CASS, withhold contributions, and comply with Andorra’s employer obligations.

How long does it take to register as a compte propi in Andorra?
Usually a few it takes days to a few weeks, depending on whether you already hold a residence/work permit and how long trade name validation and approvals take.

Can foreign nationals register as compte propi in Andorra?
Yes, but only if they obtain the appropriate residence and self-employment work permit (residència i treball per compte propi).

Does a compte propi need a separate business bank account?
Not legally required, but strongly recommended for separating personal and professional finances, and often requested by banks and clients.

What happens if I stop working as a compte propi?
You must deregister with CASS, close your activity with the commerce register (via a baixa form), and notify tax authorities by filing final returns.

Are there any government incentives or reduced rates for new compte propi?
Yes. Self-employed workers can apply reduced contribution bases (25–75%) if they meet turnover or income criteria, and some reductions exist for young entrepreneurs (under 35).

Can I use Deel as a compte propi to get paid by international clients?
Yes, Deel supports payments to self-employed workers in Andorra.

Does Deel generate compliant invoices for compte propi?
Yes, Deel invoices meet Andorran legal and tax requirements.

Can Deel help me with taxes as a sole proprietor in Andorra?
Yes, Deel provides downloadable payment and tax records, though you should also consult a tax advisor.

Does Deel offer contracts for freelancers and compte propi?
Yes, Deel provides locally compliant contract templates.

Can I access benefits through Deel as a compte propi?
Yes, Deel offers optional benefits such as health insurance and retirement plans.