Should You Incorporate Your Dental Practice? Pros, Cons, and Key Considerations

A dentist can set up a Limited Company (Private Company Limited by Shares – LTD) to operate their practice. However, incorporation does not change their professional obligations under the Dental Act 1985 or their registration requirements with the Dental Council of Ireland.

1. Benefits of Incorporation

• Tax Efficiency – Companies in Ireland pay 12.5% corporation tax on profits, which is lower than the higher personal income tax rates of up to 52% (including USC & PRSI).
• Limited Liability – Personal assets are generally protected if the business faces financial difficulties.
• Retained Earnings – Profits can be kept in the company, reducing personal tax exposure.
• Pension Contributions – A company can contribute more to a director’s pension than an individual can as a sole trader.
• Expense Deductions – Additional tax-deductible expenses, such as director’s salaries, company car, and employee benefits.

2. Restrictions for Dentists Operating as a Company

• Dental Council Regulations – The Dental Act 1985 requires that only registered dentists can provide dental services. The company itself cannot be the registered dentist.
• Personal Liability – Even if the business is incorporated, the dentist remains personally responsible for patient care and professional conduct.
• Professional Indemnity Insurance – Must still be held by the individual dentist, even if operating through a company.
• Contracting with the HSE – Some Health Service Executive (HSE) contracts may not allow a company to provide dental services directly.

4. Alternative Structures

If a dentist wants tax benefits but is concerned about restrictions, they can consider:

• Sole Trader – Full control, but higher personal tax.
• Partnership – If working with other dentists.
• Hybrid Model – Operating as a sole trader while having a separate company for non-clinical services (e.g., equipment leasing, management, or consultancy).

5. Steps to Incorporate a Dental Practice

1. Register a Limited Company with the Companies Registration Office (CRO).
2. Appoint Directors & Shareholders (the dentist can be both).
3. Register for Taxes (PAYE, Corporation Tax with Revenue).
4. Ensure Compliance with the Dental Council of Ireland.
5. Maintain Proper Accounts (file annual returns and financial statements).

6. Should You Incorporate?

• If your profits are high, incorporation may help reduce your tax burden.
• If you plan to reinvest in the business, a company allows you to retain profits at 12.5% tax.
• If you want to build a pension tax-efficiently, a company can contribute more than a sole trader.

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