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Partnership & Sole Trader



Incorporation of partnerships require a partnership deed in which the partners enter into an agreement regulating their contributions and other rights and obligations in relation to the operations of the partnership.  A certificate of registration is issued by the Malta Registrar of Companies. 


There are 2 Partnership types as follows:


  • Partnerships En Commandite - this type of Partnership will have: (a) at least one general partner (unlimited liability), and usually taxed at partners' level but if capital is divided into shares it will be subject to tax at partnership level (like a company), and 

  • Partnerships En Nom Collectif - in this type of partnership, the partners will be subject to unlimited liability and be taxed at partners’ level.

Sole Trader

The sole trader (self-employed person) is the simplest and easiest form of doing business in Malta.  Such person is required to obtain certain trades permits or licenses according to the Commercial Code, register with the Employment and Training Corporation as a self-employed and with the Inland Revenue for taxation purposes and then start operating. If a sole trader’s returns exceed Eur35,000 for goods or Eur30,000 for services, he must also register for VAT.

The following are the main characteristics:

  • The name of the self-employed person will also be the business’ name.

  • No specific share capital is needed

  • Application process is simpler than company

  • Sole traders need to:

    • be Maltese citizens or if not hold a valid passport and residence permit in Malta

    • have a social security number

  • The owner’s liability is not limited and he remains liable personally for the debts of the business

  • Submit 1 tax return a year.  

Depending on the residence of the individual, when setting up the sole trader in Malta, the individual will be subject to the income and capital gains tax with maximum of 35%.

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