Andorra

Employer of Record in Andorra

Andorra has extensive laws and regulations regarding employment. Skuad’s Andorra EOR services facilitate the uncomplicated expansion of a business into Andorra. Our self-serve, unified, and automated global HR platform accelerates the establishment and growth of your remote team, particularly when you’re unfamiliar with Andorran’s employment laws. Skuad’s EOR solution manages payroll, compliance, and benefits. Besides, with the assistance of our diversified international network, we expedite your global expansion process. Book a demo with us and learn more!

Andorra at a Glance 

Population: 77,543 people (2018)

Currency: Euro

Capital city: Andorra la Vella 

Languages spoken: Catalan, Spanish 

GDP: 315.41 crores USD (2019)

Employment in Andorra

The Andorran labor legislation applies to visiting foreigners and foreigners with active residency. To understand the nuances involved, we must comprehend the essential aspects of the Andorran law. This way, it will be easier to eliminate unnecessary confusion and complications.

Well-rounded knowledge of the Andorran law is extremely crucial to set up and run a business successfully. Therefore, it is advisable to partner with an EOR such as Skuad with the resources to guide and direct your expansion endeavors. Get in touch with us to know more.

Entitlements and Explanations:

Statutory working hours

The employees must work forty hours over five days.

Day off

Employees get one day off each week and a minimum of 12 hours of rest between workdays. 

Overtime Eligibility

Overtime is allowed only under extraordinary circumstances. The laws allow for two hours per day, 15 hours per week, and 50 hours per month. 

Salary 

The minimum monthly salary is €121.47. 

Compensation 

Compensation is performance-based.

For working on a mandatory bank holiday, employees are offered two days off for compensation or triple remuneration.

Paid public holidays

Employees get 23 holidays based on their annual working hours. There are four mandatory bank holidays.

• New Year’s: January 1
• The Andorran Constitution Day: March 14
• The Feast of Our Lady of Meritxell: September 8 
• Christmas: December 25

Apart from the above-mentioned days, the list includes the following. 

• Epiphany: January 6
• Easter Sunday
• Carnival: Variable
• Good Friday:  Variable
• Easter Monday: Variable
• Labor Day: May 1
• Whit Monday: Variable
• Assumption Day: August 15
• All Saints’ Day: November 1
• Immaculate Conception: December 8
• Saint Stephen’s Day: December 26

Medical leave 

Employees get 12 months of sick leave. However, the salary is based on the average earnings of the employees’ 24 working months considering sick leaves, or minimum wages if there are no earnings.

Maternity leave

Employees get 20 weeks of paid maternity leave and two additional weeks for multiple births or adoptions.

The remaining part of the mother’s share beginning six weeks after the birth is paid to the child’s father, or the mother’s husband or partner. 

Annual leave 

Employees get 30 calendar days of paid annual leave after completing one year of employment. In cases of the non-completion of one year, employees get their leaves depending on a prorated basis at two and a half days each month. 

Health insurance benefits 

Health insurance benefits are exclusively for the citizens of Andorra. However, the benefits of private health insurance can be reaped by tourists and other residents living in the country.

Employee protection and anti-discrimination rights

Anti-discrimination rights are guaranteed under the human rights provisions in the Andorran Constitution. Thus, employees are well-protected.

Confidentiality of personal information

Personal information in Andorra is regulated by Qualified Act 15/2003 of December 18, under the Personal Data Protection (Law 15/2003).

Contractors vs. Full-time Employees

Contractors take up projects and do the needful depending on the terms of their contract. They are not the same as freelancers although they share common characteristics. Speaking of characteristics, contractors work on projects and have their own set of clients. They get paid on a project basis and are not entitled to exclusive benefits from the employer. Since they use their resources for funding their project, they pool in their efforts to reduce costs and the same works to the clients’ advantage. The relationship between the employer and the employee is short-lived.

On the other hand, full-time employees tend to be more focused and dedicated in their projects than contractors who are subjected to time limits. They are eligible for numerous benefits from the employer. They even use the company’s resources for funding the completion of work. In the case of full-time employment, a prior termination notice is required for ending the long-term relationship between the employer and the employee.

Despite the above-mentioned differences, both contractors and full-time employees require a contract in place to initiate their legal relationships. There’s no specific requirement as to the contents of the contract, but there is a precondition that employment contracts must be in writing. According to Andorra’s labor law, they must be in the official language of the country, Catalan. 

Moreover, pecuniary matters are to be mentioned only in Euros rather than a foreign currency. The employment contract must contain a detailed specification of the following details. 

• Employer name and address
• Employee name and address
• Place of work
• Title or type of work to be performed
• Start date
• End date
• Work hours, rest periods, and breaks
• Salary and payment increments
• Annual leaves
• Period of notice for terminating the employment relationship
• Any other relevant details. 

Furthermore, adherence to Andorra's employment laws is mandatory.

Skuad can assist you with all your requirements.

Hiring in Andorra

The initial step for hiring in Andorra is to be well-versed in the legal requirements for employment. This applies to both contractors and full-time employees. Paperwork might be time-consuming but it is worth the effort. Several platforms facilitate job searches in Andorra.

Employment Search Engines in Andorra

The main employment search engines and databases are given below. 

• Seasonworkers primarily deal with seasonal work.
• Busco Feina is the most-used database in Andorra.
• TrobaréFeina is also popular.
• Treball.ad is the official database regulated by the Andorran Government.

Mass Media Platforms

Some of the mass media platforms that provide information on employment opportunities in Andorra are listed below. 

• RTVA (Radio i Televisió Andorra)
• Cadena Ser (Radio)
• Diari d'Andorra (Newspaper)
• El Periòdic d'Andorra (Newspaper)
• Bon Dia (Newspaper)

Career fairs and recruitment agencies are also dedicated to helping people find employment. Skuad is a global HR platform; our EOR solutions ensure an effective hiring process in Andorra. We undertake missions for talent hunt and bring the best of the best to the table. Our tech-enriched solutions make the job easy for both parties, and that is our differentiating factor, talk to us to learn more!

Probation & Termination

Probation and termination activities are regulated and defined under Andorra's employment compliance laws. 

Probation Period

The probation period in Andorra cannot exceed one month. Exceptions to this rule include instances where the agreed remuneration exceeds three or five times the minimum salary. In such cases, the probation period may be up to three months or six months, respectively. Modifications in this regard can be done with the help of collective agreements. Lastly, the agreement for the probation period must be in writing for both contractors and full-time employees.

Termination of Service

Effective termination requires prior notice. An employer can terminate an employee with or without a cause. The prior notice period differs from contract to contract; however, the general practice is that the notice period is one day for every month of service, up to 90 days. Termination of service happens in the following circumstances.

• Mutual agreement for termination exists
• Expiration
• Retirement
• Death
• Permanent incapacity
• Permanent disability
• Deprivation of freedom
• Bankruptcy
• Amortization due to economical, technical, organizational, or other causes

To learn about the nuances involved, talk to Skuad experts.

EOR Solution in Andorra

Andorra attracts foreign expansion efforts owing to the principality of the country concerning tourism. However, since its laws require interpretation, an EOR service can manage your payroll, contracts, work permits, taxation, and probation and termination requirements. Book a demo with us!

General EOR Service Terms

Taxes that apply to invoices 

The tax is very low in Andorra. Rates range from 0% to 10%, depending on invoices.

Minimum duration of service

The season work permits are based on the work contract.

• Passive Residency Permits: Three months
• Active Residency Permits: Six months

Currency accepted 

The currency of Andorra is Euros. 

Required details and documents

The following details and documents are required. 

• Passport, with a photocopy
• Passport size photograph
• Employment contract
• Applicant’s curriculum vitae (CV)
• Education qualifications, including degrees and diplomas
• Birth certificate
• Marriage certificate, if applicable
• Background check by police in the applicant’s country, if required
• Original certificate of registration
• Proof of accommodation in Andorra

Outsourcing Employment through an EOR

Business expansion into Andorra demands the right outsourcing mechanism to reap all the benefits and avoid hassles. An EOR can address the intricacies of an in-house or remote team and manage it within the ambit of employment laws. Skuad’s expert knowledge of Andorra’s employment laws and vast network of experts can work together to take care of all your expansion needs. To learn more, book a demo today!

Types of Visas in Andorra

Andorra does not have a visa policy. Therefore, a passport or European Union national identity card is sufficient for entry into the country. However, the geographical location of Andorra makes it accessible only through Spain or France, which are Schengen countries. Therefore, to enter Andorra, one must first enter the Schengen area and accordingly, abide by the Schengen visa rules. Nevertheless, the same does not apply to “work.” For a work visa, you will need knowledge of Andorra’s employment visas and other work permits.

International Business Permit 

Foreign entrepreneurs are eligible for this permit. A further requirement is a deposition of a refundable bond of €50,000 and an additional €10,000 for each dependent with the Andorran Government with proof of independent financial resources.  

Seasonal Work Permits

This is the most commonly used work permit in Andorra and heavily depends on seasonal work. A seasonal employee is considered to be at par with a tourist. 

Passive Residency Permit

This permit is exclusively for investors and they cannot stay in the country beyond 90 days.

Active Residency Permit

This permit is for foreign nationals and is the most suitable for hiring employees.

To ensure your expansion efforts go without a hitch, you can rely on Skuad’s EOR services. Skuad can assist you through your visa process and ensure there are no delays due to misinformation regarding the local laws, learn more at our website.

Work Permits

As an EOR in Andorra, Skuad undertakes the legal formalities and ensures compliance with the Andorran laws. The client company can be assured that each aspect required for running a subsidiary in Andorra is taken care of by Skuad’s HR platform, talk to us! 

The information regarding securing work permits in Andorra is mentioned below:

Can Skuad sponsor work permits in Andorra?   

Yes, Skuad can handle the formalities required to secure work permits for your employees in Andorra. 

Processing time

A processing time of two weeks is required to secure a work permit.

Work permit process

The following steps must be followed to obtain a work permit in Andorra. 

1. Skuad’s local partner in Andorra applies for the employment contract with an Andorran company.
2. The employer initiates the sponsorship process.
3. Skuad undertakes the attestation of required documents to the Andorran Ministry of the Interior, Immigration Service, and Department of Labor. 
4. The employee registers with the social security system in Andorra, Caixa Andorrana de Seguretat Social (CASS).
5. The employee awaits the approval of the immigration authorities.  
6. The employee can start working in Andorra on receiving their work permits, which are, Active residency permit and Seasonal work permit

Passport submission work permit validity

The employee’s original passport is presented during their appointment with the Andorran Ministry of the Interior, Immigration Service, and Department of Labor.

Work permit validity

The validity of work permits depends on the type of permit. 

• The validity of seasonal work permits depends on the work contract.
• The validity of active residency permits is six months.

When can an employee go to Andorra?

An employee can travel to Andorra on receiving their work permit.

How much does a business visa cost? 

A business visa costs €60.

Duration of processing a business via 

The duration of processing a business visa is between 10 and 15 days. This is variable.

Can you switch a business visa to a work permit?

No, you cannot switch a business visa to a work permit. 

Can spouses work on a dependent visa? 

Yes, spouses can work on a dependent visa in Andorra. 

Termination of work permit

Prior notice is required for the termination of a work permit.

Payroll & Taxes in Andorra 

Payroll in Andorra

Andorran payrolls require contracts to be in place. This is done to ensure compliance with the legal necessities and formalities. An important factor for Andorra to be an investment hub is its tax policy. Tax rates are meager and tax brackets range only from zero to 10%. This further eases the process for payroll establishment. Payrolls can be set up either through a subsidiary in Andorra or a global EOR. Skuad’s role is to function as a global EOR and facilitate the same by coordinating with a local team in Andorra - know more.

Taxes in Andorra

Andorra is known for its regulation regarding taxes. The tax advantages in Andorra include its corporate tax, low value-added tax, lack of sales tax, and low personal income tax.

Income tax rates for residents

Generally, the income tax rate for residents is 10%. This tax is known as “Impost sobre la renda de les persones físiques” in Catalan.

For individuals, the division is as follows. 

• €0 – €24,000: 0%
• €24,001 – €40,000: 5%
• Over €40,001: 10%

For married couples, it is as follows. 

• €0 – €40,000: 0%
• Over €40,001: 10%

These brackets are the same for salaries, foreign investment income, and pension income. Deductions are made for dependents and mortgage interest.

Income tax rates for non-residents 

The income tax rate for non-resident is 10% of their economic activities.

Tax rates for companies

A company must pay taxes from the profits earned. This tax is termed as “Impost de societats.” The corporate tax rate is 10%, but for holding companies, it is 2%. Lastly, for royalties, it is 5%. 

Capital gains tax rate

The nominal tax rate for individuals and companies is 10%. Interestingly, for a property owned for longer than 10 years, the Andorran tax rate is 0%. 

Tax rate on real estate

The tax bracket on real estate ranges between the following. 

• Fifteen percent if owned for a year or more.

• Ten percent if owned for three years.
• Zero percent if owned for 13 years. 

Sales tax

There is no sales tax in Andorra. 

Value-added tax (VAT)

VAT is at its lowest in this European country. The VAT rate is called “impost general indirecte.” The general VAT applied in Andorra is 4.5%. However, there are several exceptions to it as listed below.

• Education
• Healthcare
• Medicine
• Alcohol

VAT is imposed at a different rate for the following.

• Banking services charges: 9.5%
• Financial services charges:  9.5%
• Books, magazines, and newspapers: 1%
• Food and drink: 1% 
• Art: 2.5% 
• Tourism: 2.5%

Tax returns

The law requires filing income tax returns. 

Financial year-end date 

The financial year-end date is December 31.

Tax documents 

At present, no information is available on the tax documents required. 

Employers social security and statutory contributions

The breakdown of the social security and statutory contributions is as follows. 

• Amount set by the country: 14.5% of income.
• Employers and employees: 5.5% to 10.5% of salary
• Entrepreneurs: 20% to 25%
• Business leaders: 20% to 25% 

Reimbursements

The reimbursement policy is as follows. 

• Accident or workplace illness: 100%
• Hospital costs: 90%
• General health expenses: 75% 

Pension

According to the current law of 2015 (social security), all residents of Andorra receive a pension based on eligibility.

Incorporation: How to Set Up a Subsidiary in Andorra

When you think of expanding your business to Andorra, you must consider two factors: the city/region of the business and the type of entity. It is advisable for companies working in the long term to set up their subsidiary as a limited liability company. The process involves the following steps. 

•  Registering company’s name
• Authorizing incorporation
• Holding a business bank account
• Depositing minimum share capital
• Petitioning the deed of incorporation
• Registering at the Trade Register of Andorra
• Requesting a Tax Identification Number for the company

An excellent grasp of Andorran subsidiary and municipal laws is mandatory to help the subsidiary to run effectively. Skuad’s role is to operate as a platform to supervise, manage, and simplify this process. Talk to a Skaud expert to learn more.

Professional Employer Organization (PEO)

According to the definition provided by the National Association of Professional Employer Organization (NAPEO), Professional Employer Organizations (PEOs) allow their clients to outsource the handling of HR, employee-related benefits, taxation, probation and hiring, and payroll. PEOs furnish a pathway for HR-centered decision-making processes. However, an EOR company furnishes a flexible path for outsourcing HR teams. 

The biggest advantage of an EOR organization is that it provides for a diversified workforce from countries all around the globe without the hassle of registration complexities according to local laws. Besides, an EOR service dispenses general liability, workers’ compensation, and insurance coverage. These are factors not dealt with by PEOs. Skuad’s self-serve, unified, and automated global HR platform makes the EOR process effortless. Get in touch with us to know more.

Conclusion: What Gives Skuad’s Andorra Solutions an Edge?

Skuad’s Andorra EOR solution helps set up and run a subsidiary in Andorra’s favorable business environment. Andorran laws are business- and foreign policy-friendly. This simplifies the complexities involved in matters concerning modern business solutions. Skuad’s success lies in the fact that the company has a tech-enriched HR platform. This makes the global hunt for talent unchallenging and contracts are created on the go.  

Skuad’s hassle-free solutions can effectively circumvent legislative hurdles. Various companies provide EOR services, but Skuad’s expertise and a strong team of experts make it one of the foremost organizations providing EOR solutions in Andorra.