Malta is undeniably one of the best investment destinations in the world. Its financial sector is remarkable, and the Island is also among one of the few countries which have genuinely supported the growth and development of micro businesses in the European Union. Although setting up a business in Malta is generally very easy, a sole proprietorship is one of the most hassle-free legal structures one can adapt in Malta.
The most popular business models found in Malta include; the sole trader, partnerships, private and public limited liability companies. In this context, we will focus on the sole trader. A sole trader is a one person business. It is wholly owned and operated by a single individual, and this person is basically responsible for everything in the business. The sole entrepreneur will save as the director as well as the shareholder of their own company which means all liability and profits are directly associated with them.
In principle, the person is the business entity, and the business entity is the person. To set up a sole trader business, the applicant is required to possess permits and license of operation as stipulated by the commercial code. It is also a statutory requirement for the sole trader to be registered with the employment and training cooperation of Malta.
Sole traders are not required to be registered in the Trade register, however foreign investors are required to obtain a work permit and a social security number registered in Malta in order to legally conduct all operations of the business prior to the commencement of operations.
For all import and export services, it is vital to acquire an EORI number which will ensure that the business can legally export and import goods in and out of the country.
Tax requirements for a sole trader
All businesses in Malta are subject to tax compliance in accordance with the Maltese commercial code. It is a no brainer that sole traders fall at the very bottom of the tax brackets. Individuals owning sole trading companies are required to comply with the income tax which is a percentage of the annual revenue of the entity. Income tax has been set to a standard figure not exceeding 35% of the yearly revenue. For all fixed and intangible assets purchased or gained in each relevant business term, sole traders are expected to comply with the capital gains tax.
Advantages of setting up a sole trader in Malta
It is apparent that a number of pros are associated with opening a sole trader in Malta. Every individual running a sole trader entity is the sole beneficiary of all the profits the business makes. The individual also gets to run the company in their own preferable fashion.
For professional help and assistance, on how to register a sole proprietorship in Malta, reach out to SIGTAX. Our team of accountants, lawyers, and consultants stay au courant with the latest business trends and regulations in Malta. Thus, you can be confident that you will get relevant info which guides you to do everything the right way and in your favor.