A Guide to Registering as Self-Employed in Malta

In 2024, being your own boss is getting more and more attractive to those seeking independence, opportunities for growth, and financial success in their careers. However, to set up a solid foundation that requires going through a few important steps. We have covered them all in this article, along with some financial data from our experts.

Here’s what you need to know.

Eligibility Requirements For Self-Employed Individuals

For EU/EEA nationals or individuals who have never worked in Malta, obtaining a Social Security number is the first step in the process. Additionally, if your business involves importing or exporting goods, acquiring an EORI number is recommended.

For Third Country Nationals (TCN), including non-EU citizens such as US or UK citizens, the process is more complex. TCNs interested in self-employment must meet specific criteria, which may include:

1. Investing a minimum of €500,000 in Maltese capital expenditure within the first six months of obtaining the Jobsplus License.

2. Demonstrating a commitment to recruiting at least three Maltese, EEA, or Swiss nationals within the first 18 months of establishment.

3. Leading a project formally approved by Malta Enterprise and notified to Jobsplus.

Check out some residency options for TCNs in Malta.

Tax Obligations for Self-Employed Individuals

Unlike traditional employment where taxes are deducted by an employer, self-employed individuals are responsible for managing their tax affairs.

In Malta, self-employed individuals are subject to a progressive tax system based on their yearly income, insofar as the activities that produce income are based in Malta. The tax rates for different income brackets are as follows:

– Income up to €9,100: No tax deducted

– Income between €9,101 and €14,500: Tax rate of 15%

– Income between €14,501 and €19,500: Tax rate of 25%

– Income between €19,501 and €60,000: Tax rate of 25%

– Income above €60,001: Tax rate of 35%

Read more about tax credits and deductions in Malta. (link)

It should be added that the Maltese Commissioner For Revenue has a more benign view of what constitutes an activity “performed in Malta” than many other tax authorities around the world. As per the CFR guidelines, income derived from employment or from a profession, business or other self-employment arises in Malta if the activities are performed in Malta.

To clarify, to be taxed in Malta, the activity from which the income derives must actually be carried out in Malta. Practically speaking, if you are an interior designer and bill a client for time you have spent working in a different country, that income is not in principle taxed in Malta.

Advantages of Self-Employment

Despite the challenges and responsibilities that come with self-employment, there are numerous advantages to be gained. 

Being self-employed allows individuals to pursue their passions, exercise creative freedom, and take control of their professional careers. This is particularly beneficial for freelancers who want to relocate to Malta and work at their own pace. (Check out the business entities you can choose in Malta.) On a more practical level, a self-employed individual can offset the costs inherent in carrying out their activity – all the way from having Internet and mobile phone connectivity to owning a car to travelling and having business meals out – against their income, which can result in lower taxes paid. Furthermore, Malta has historically been ahead of the curve in providing government support for capital expenditure – say, purchasing vehicles or refurbishing property held for carrying out a business – by offering tax breaks or government grants.

By owning and managing their businesses, self-employed individuals have the flexibility to set their own schedules, choose their clients, and dictate the terms of their work. This level of autonomy encourages empowerment and fulfilment that may be lacking in traditional employment settings. 

At the same, self-employment opens doors to new opportunities for personal and professional growth. Building a successful business requires resilience, adaptability, and perseverance, qualities that are gained through the challenges and triumphs of entrepreneurship.

Learn how to choose a legal structure for your business in Malta.

Register Yourself as Self-Employed in Malta

Being self-employed in Malta offers a pathway to financial independence, creative fulfilment, and professional success. Like any journey, staying patient, persistent, and open to learning helps navigate the ups and downs of entrepreneurship. In the end, it’s all worth it, as the benefits of self-employment have proven to be no limit.

For a smooth journey towards self-employment in Malta, our financial experts are here to advise you and assist you during this process. Feel free to contact us on Expatax.mt.