Optimization of Business Structure for Entrepreneurs – Budget Savings Are Possible!

Our client Wiktor operates a sole proprietorship and faces high income taxes and health insurance contributions. He approached our firm seeking analysis and recommendations for the most advantageous business structure that would allow for a significant reduction in budgetary burdens.

Our team conducted a thorough analysis of Wiktor’s financial data from the previous and current year, evaluating the nature of his business, development plans, and financial situation. We examined alternatives for transferring his sole proprietorship to various corporate structures (limited liability company, limited partnership, and joint-stock limited partnership), highlighting the tax implications of each scenario.

We prepared a detailed calculation of estimated tax burdens for each business form based on historical data and future projections.

We presented Wiktor with the advantages and disadvantages of each business structure, including a limited liability company under the Estonian CIT regime, a limited partnership, and a joint-stock limited partnership. Based on this assessment, we recommended the optimal scenario tailored to Wiktor’s business, taking into account both short-term and long-term tax benefits.

Client Benefits:

• Tax Optimization: The most advantageous solution for Wiktor’s company turned out to be the formation of a limited liability company and transitioning to the Estonian CIT system. Maintaining revenues at 15.7 million PLN, this change could result in annual savings of approximately 185,000 PLN in taxes and social security contributions.
• Long-Term Flexibility: In the event of significant business growth in the coming years (with revenues and expenses doubling), the most tax-efficient solutions would be a limited partnership or a joint-stock limited partnership, generating savings of around 340,000 PLN per year.
• Transparency: Wiktor received a detailed analysis clearly outlining the advantages and disadvantages of each business form and providing a comprehensive calculation of tax burdens.

Through a detailed financial and tax analysis, our firm helped Wiktor make an informed decision about changing his business structure. As a result, our client gained legal and financial security and can significantly reduce his tax burdens and health insurance contributions.

If you have any questions about tax optimization or other aspects of running a business, we encourage you to contact our firm.