Economic Overview, Digital Hub & Pyrenean Gateway
The Principality of Andorra offers a premier European base characterized by safety, modern telecommunications infrastructure, and a low-tax regime. Though outside the European Union, Andorra uses the Euro (€) via monetary agreement and maintains deep commercial integration with Spain and France.
Key Economic Sectors
- Digital Innovation & Content Creators: Major influx of tech entrepreneurs, digital nomads, and e-commerce specialists drawn by 10% top tax rates.
- Banking & Financial Services: Highly capitalized private banking and wealth management institutions.
- Tourism & Retail: World-class Pyrenean ski resorts (Grandvalira) and duty-free commerce.
Employment Contracts, Labor Law & Probation
Employment relations are governed by Llei 31/2018 de relacions laborals.
- Mandatory Written Terms: Contracts must be executed in writing in Catalan (or bilingual with Catalan controlling).
- Contract Types: Indefinite-term (*Contrat per temps indefinit*) is the standard; Fixed-term (*Contrat de durada determinada*) is permitted for specific projects up to 2 years.
- Probation: Up to 1 month for non-qualified workers, 3 months for qualified technicians, and 6 months for directors and senior management.
Working Hours, Overtime & Rest Periods
- Standard Hours: 40 hours per week (8 hours/day).
- Overtime: Compensated with a minimum 25% premium (125%) for the first 2 hours/day and 50% premium (150%) thereafter, or compensatory rest.
- Weekly Rest: Minimum 36 consecutive hours of weekly rest (typically Saturday afternoon and Sunday).
Annual Leave, Public Holidays & Maternity
- Annual Paid Vacation: 30 calendar days (or 22 working days) per year.
- Public Holidays: 14 official public holidays (including National Day / Meritxell on 8 September and Constitution Day on 14 March).
- Maternity Leave: 16 weeks paid at 100% via CASS social security (extendable by 2 weeks for multiple births). Paternity leave is 4 weeks.
- Sick Leave: Paid via CASS starting from day 4 of medical absence.
Social Security (CASS), IRPF Tax & Benefits
Social Security (Caixa Andorrana de Seguretat Social – CASS)
| Component | Employer Share | Employee Share | Total CASS |
|---|---|---|---|
| General Branch (Health & Maternity) | 7.0% | 3.0% | 10.0% |
| Retirement Branch (Pensions) | 8.5% | 3.5% | 12.0% |
| Total Statutory Contribution | 15.5% | 6.5% | 22.0% |
Personal Income Tax (IRPF)
Andorra's IRPF is one of Europe's lowest: 0% up to €24,000/year; 5% on €24,001–€40,000; and a flat maximum of 10% above €40,000.
Dismissal, Notice Periods & Severance Indemnity
- Non-Justified Dismissal: Requires written notice and severance indemnity equal to 25 days of salary per year of service (capped at 365 days / 1 year salary).
- Disciplinary Dismissal: Permitted for serious proven fault without severance.
- Notice Period: Ranges from 12 days to 90 days depending on tenure.
Opening an Andorra Entity (SL) vs. Global EOR
Incorporating an Andorran Societat Limitada (SL) requires Foreign Investment Approval (*Inversió Estrangera*), €3,000 minimum share capital, notarial deed, tax registration, and commercial bank account setup taking 6 to 12+ weeks. An EOR allows immediate hiring in 1 to 2 weeks without entity incorporation.
Why Use an Employer of Record (EOR) in Andorra
- Rapid Onboarding: Onboard local specialists and digital talent in days.
- CASS & IRPF Compliance: Automated management of 15.5% CASS employer contributions and monthly 10% IRPF tax filings.
- Immigration Quota Support: EOR manages cross-border permits for Spanish/French border residents (*fronterers*) and foreign specialists.
Hiring in Andorra? Key Resources
Whether you are evaluating entity setup vs. using an Employer of Record, or looking for the best international payroll solution, our guides give you transparent benchmarks:
