Almost everyone starts as a freelancer: it is simple and cheap. As income grows, the question comes up: is it worth setting up a company? There is no magic number, but there are clear signs and sums worth doing.
How each is taxed
As a freelancer, your income pays IRS at rates that rise with income, plus Social Security on 70% of what you invoice. In a company, profit pays corporate tax (IRC): 19% in 2026, or 15% on the first €50,000 of profit for small and medium-sized companies, plus a possible municipal surcharge. What you then take out, as salary or dividends, is taxed separately.
Signs it may pay off
Steadily growing income, high real expenses the simplified regime does not recognise, wanting to reinvest profits, bringing in partners or a first hire. A company also keeps your personal assets separate from the business.
The other side of the scale
A company brings more obligations: full accounting by a certified accountant, more returns and rules for taking money out. So the decision should be made with your real numbers, not a rule of thumb.