At ALR, based in Castelldefels with over 30 years of experience advising SMEs, we know that choosing the right legal structure is essential. One of the smartest moves for business owners is to explore the tax advantages of setting up a limited company. It offers real savings, strategic flexibility, and a professional image.
Lower tax rates compared to self-employment
Limited companies pay corporate tax at 25 %, while individuals may face income tax rates of up to 47 %. New companies can enjoy a reduced 15 % rate for their first two years.
Access to deductions and incentives
A limited company offers access to deductions not available to freelancers. These include bonuses for hiring staff, incentives for R&D, and sustainable investments. The Patent Box scheme also allows a major tax reduction on certain intangible-related incomes.
Greater flexibility in tax planning
You can decide how and when to receive profits. Choosing between dividends, salaries, or reinvestment allows for efficient tax planning and better control of your income.
Simplified incorporation process
Options like the New Limited Company (SLNE) provide tax relief at the start, online procedures, and simplified accounting, reducing entry barriers for entrepreneurs.
Asset protection and funding
Partners of a limited company are not personally liable for company debts. This lowers personal risk and boosts credibility when applying for funding or negotiating contracts.
The ALR experience
Since 1992, ALR has supported SMEs and individuals with expert tax, accounting, legal, and labour advice. From our Castelldefels office and nationwide via online tools, we ensure safe and strategic business decisions.
Conclusion
The tax advantages of setting up a limited company include reduced tax rates, exclusive deductions, flexible financial planning, long-term tax efficiency, and personal asset protection. At ALR, we help you decide if this is the right strategic move and guide you confidently through every step of the process.