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Payroll In Malta

Sole Proprietorship in Malta: Comprehensive Setup Guide

Recording a GDP of 17.2 billion USD in 2022, Malta has an advanced economy primarily based on industries and services. The country is a part of the European Union. It has one of the most accessible business registration processes in the EU, making it a hub for big and small entrepreneurs. 

One of the most popular business forms in Malta is a sole proprietorship. In this mode, an individual is the sole owner of their company and can operate the company in their name. 

Setting up a sole proprietorship in Malta consists of a few simple steps that can be done online. More information is given below. 

Who Can Be a Sole Proprietor in Malta?

It is simple to register as a sole proprietorship in Malta. However, those who want to start this kind of business in the country must meet the following criteria:

  • The applicant can be a resident or non-resident of Malta.
  • In the case of residents, they should have a valid ID card.
  • Non-residents should have residence and work permits.

Benefits of Sole Proprietorship in Malta

Setting up a sole proprietorship in Malta has several benefits. The primary advantages are:

  • Flexibility: Since an individual single-handedly operates a sole proprietorship, it allows the entrepreneur to make all business-related decisions themself. Hence, they can work with more flexibility. 
  • Quick process: In general, opening a business in Malta does not take much time due to its business-friendly rules and regulations. Likewise, once the application for a sole proprietorship is submitted, it takes less than 48 hours for that business to become operational. 
  • Cost-effective: The Maltese government charges no money to register sole proprietorships. Furthermore, no minimum capital is required to start working as a sole trader in the country, making this business type beneficial for novice entrepreneurs. 
  • Lenient tax system: Business owners must file a single income tax annually at 35% in sole proprietorships. This further lowers the financial burden that new businesses end up facing otherwise. 
  • Less bureaucracy: Overall, the paperwork involved with setting up a sole proprietorship in Malta is relatively less. This considerably decreases the bureaucratic restraints usually experienced in other kinds of businesses. 

Documents Required for Registering Your Business in Malta

Registering and starting a sole proprietorship in Malta requires the following essential documents and numbers:

  • ID card or residence and work permit
  • Valid social security number
  • EORI (Economic Operators Registration and Identification) number: In the case of applicants who want to import and export across the EU
  • Employer number: Can be generated after filling in a self-engagement form and submitting it to Jobs Plus, which is a government institution managing employment in the country 
  • VAT number
  • PE (Permission to Employ) number: Essential for businesses planning to engage employees. This number can be retrieved after registering with the Maltese Department of Revenue. 
  • Valid licenses in the case of street hawkers, car boot sales, market hawkers, marketing agencies, precious stones, gems dealers, etc.

Other Criteria for Registering a Sole Proprietorship in Malta

Individuals looking to register sole proprietorships in Malta must apply for VAT registration. There are three VAT articles in the country, and business owners must sign up for one, depending on their business conditions, as given below. 

Article 10

  • Providers of taxable services and goods in Malta
  • Exporters of goods outside the European Union
  • Suppliers of products exempted with credit goods and services
  • Manufacturers of products and services that are sold in other EU states

Article 11

  • Having an annual turnover of less than 35,000 EUR from goods or 24,000 EUR from services 
  • Qualifying as a small undertaking as per the VAT Act of 1998

Essentially, businesses registered under VAT article 11 are exempted from paying VAT. However, they cannot claim VAT on their business-related purchases, either. 

Article 12

  • Not registered under Article 10
  • Acquiring intra-community products in Malta that do not exceed 10,000 EUR in annual turnover
  • Purchasing services from suppliers located both within and outside the EU

How to Register a Sole Proprietorship Company in Malta

In Malta, registering a sole proprietorship does not require registering a business name with the Maltese Companies Register. Hence, the process of registering a sole proprietorship in Malta is relatively easy and consists of the following steps:

  1. The first step is to submit a self-engaged employment form in JobsPlus to inform the government that you will be self-employed. A unique employer number will be generated after the submission of this form. 
  2. Next, open the Maltese e-services website and log in using your ID and document numbers. 
  3. Subsequently, fill in all the necessary details like your social security number, VAT number, etc. In addition, you might also be required to submit details related to your work description, personal address, and business address. 
  4. Once the online form is filled, it must be submitted with all the required documents. The registration is usually completed within 48 hours of submitting the form. 
  5. Notifying the National Statistics Office about your business to include it in the national Business Register is essential. 

How Multiplier Can Help You

The Maltese business laws have made it simple for individuals to set up sole proprietorships in the country. However, while the burden of bureaucracy is less, it is not entirely absent. Therefore, new business owners might miss essential rules and regulations, leading to troubles while running their businesses. However, with an EOR platform, such situations can be completely sidelined. 

Multiplier, an example of a global EOR platform, is present in over 150 countries. We help entrepreneurs realize their dreams by simplifying employment and employee and payroll management. 

Therefore, if you aim to start a sole proprietorship in Malta, you can rely on Multiplier to handle all your payroll management needs and get the most suitable employee management solutions with just one click.

Frequently Asked Questions

Yes, as per Maltese law, having a separate account for your business is mandatory.

According to the Maltese Commercial Code, it is not required for sole proprietorships to be registered with the Trade Register.

Yes, you can hire employees in this type of business.

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