MB or UAB – Which to Choose in 2026?
When choosing between a Small Partnership (MB) and a Private Limited Company (UAB), what matters most is not only the simplicity of establishment, but also taxes, methods of withdrawing funds, and business growth plans.
The tax changes that came into effect in 2026 have further highlighted that the differences between MB and UAB arise not so much in the taxation of company profit, but at the stage of the owner withdrawing funds.
When Is MB Most Commonly Chosen?
MB is usually suitable when:
- the business is started by 1–2 people
- the activity is still being tested
- there is no need for investors or share structure
- a lower administrative burden at the start is important
When Is UAB More Suitable?
UAB is more often chosen when:
- business growth is planned
- employees will be hired
- credibility with banks or partners is required
- the owner plans to pay themselves a stable salary
📊 MB and UAB Tax Comparison for 2026
| Tax Area | MB | UAB | Practical Significance |
| Profit Tax (Standard) | 17 % | 17 % | The rate is the same for both forms |
| Profit Tax (Reduced) | 7% if revenue ≤ €300,000 | 7%, same conditions | Favorable for small companies |
| Profit Tax for New Company | 0% for the first 2 years | 0% for the first 2 years | Major advantage for startups |
| VAT Registration Threshold | €45,000 per year | €45,000 per year | Form does not matter |
| Dividend Taxation | 15% PIT | 15% PIT | Equal profit withdrawal |
| Salary to Owner | Payments according to MB member procedure | Classic employment salary | UAB has a clearer system |
| Withdrawals for Personal Needs | Social contributions; from 2026-07-01 the base increases to 90% | Not applicable | MB withdrawals become more expensive |
| Social Guarantees | Depends on contributions paid | Full employee guarantees | UAB more stable in the long term |
Withdrawing Funds – Where Does the Real Difference Arise?
If Profit Is Withdrawn as Dividends
MB and UAB are almost identical — 15% PIT applies.
If the Owner Wants a Regular Salary
The UAB form is simpler and clearer, as it applies the standard employment salary model with full social guarantees.
If the MB Member Frequently Withdraws Funds for Personal Needs
From July 1, 2026, the social contribution base increases to 90% of the withdrawn amount, making this method considerably more expensive than before.
Quick Summary
| Situation | More Suitable Form |
| Starting Small Business | MB or UAB (due to 0% or 7% profit tax) |
| Salaries Planned for Owner | UAB |
| Profit Withdrawn as Dividends | Both equally |
| Frequent Withdrawals “for Oneself” | UAB becomes more favorable from 2026 |
🎯 Not Sure Which Form Is Better for Your Situation?
Every business is different — it is important to assess:
- planned revenue
- profitability
- whether there will be employees
- how you plan to withdraw funds
👉 By registering for a detailed consultation, you will receive an individual MB and UAB tax analysis completely free of charge.
We will help you choose a form not “according to general rules,” but based on your actual numbers.
Register for a free consultation and find out which business form is financially more beneficial for you.
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