Start Working as a Freelancer in Malta: The Complete Guide

The Maltese islands are situated on the sparkling Mediterranean waters with a climate that is the envy of the world. The prospect of working and living on one of these islands can be a dream come true for many people who think about self-employment as a way to balance their life. Take advantage of the flexibility that freelancing can bring by considering joining the many freelancers already operating in Malta

Anyone interested in freelancing in Malta will recognize the scenic advantages instantly. There are also favorable conditions for conducting business in this small idyllic environment. The social networking opportunities in Malta are considerable. The friendly locals and pleasant environment creates an idyllic place to freelance. Doing what you love in a beautiful island paradise can be the perfect solution for your needs. Consider the many reasons to become a freelancer in Malta.

Why Should You Freelance in Malta?

The large amount of freelance activity happening in Malta can be explained only partially by the scenic views; there are also favorable conditions for purposes of taxation, business networks and a friendly social environment. There are opportunities for collaboration, meeting new people and expanding your operations over time. Thankfully, it’s not difficult to become a freelancer in Malta because the rules are clear, and the bureaucratic involvement is minimal.

How to Register to Freelance in Malta

Registering to become a freelancer in Malta is fast and easy. This is done by going to the local employment agency, which is called JobPlus. This is the place where you can get the correct tax return forms for part-time or full-time self-employment. Once you have a social security number, which is called an EP, you can also hire employees if your business expands over time. This is helpful if you think that your business idea has the potential to grow rapidly.

If you need to get a social security number to work as a freelancer in Malta, you can get the form at the Commissioner for Revenue website in the area for small businesses. The sole proprietor form is listed under the section on income taxes. Just download the form, and follow the instructions. An address is provided for you to use. The low level of paperwork required is certainly one of the top reasons to become a freelancer in Malta.

Taxes for Freelancers in Malta

Taxation obligations for freelancers and self-employed people in Malta are mediated through a system that relies on the tax number obtained from the Office of the Commissioner of Revenue. Taxes are due every year after the start of your business activities in which revenues were earned. The taxes will be paid on the profits of that year going forward. Taxes are critical for anyone interested in mastering freelance business management in Malta.

Here are the key items to keep in mind for freelancers in Malta:

  • Tax filings are due six months after the end of each year.
  • Net profits are used to determine the taxes owed; this is considered your taxable income.
  • Net income is calculated using the individual taxation rates.
  • Self-employed individuals registered at JobsPlus will pay a tax rate of 15% up to the threshold of 12,000 EUR.
  • Social security payments must be made directly by self-employed people; the amount is 15% of the income from the previous year.
  • The minimum contribution rate applies to the social security paid during the first year in business.

VAT Obligations for Freelancers in Malta

The VAT obligations for freelancers and self-employed people in Malta are outlined in the Maltese VAT Act. This provides a list of exempt activities, which don’t require the freelancer to register for a VAT number. This registration must happen within the first month of qualifying economic activity, and it takes place at the Office of the Commissioner of Revenue. There is a threshold of income for VAT, and you are not required to have a VAT number if your annual income falls beneath this amount.

Here are some other facts you need to know about VAT in Malta:

  • The threshold for services is 30,000 EUR for freelancers.
  • The standard rate for VAT is 18%.
  • The reduced rate of seven or five percent apply to select categories of activities.
  • A zero VAT is charged for items like exports, immovable property and other exempt items.
  • Online VAT registration can be done at the Office of the Commissioner for Revenue.

Expenses When Working as a Freelancer in Malta

Freelancer expenses are determined based on the average cost of living for an individual because the liabilities of the business activities must be covered by personal resources. The living expenses for a freelancer or self-employed person in Malta is almost 15 percent lower than the average cost of living in the United States. Expenses for business activities can vary widely. This mostly depends on the field or industry. The most important aspect of freelancer business management in Malta is the ratio of income to expenses.

However, the rent is also around 45 percent lower, so freelancers can calculate this into their budget for business expenses. For example, since the monthly costs of housing in Malta is around 740 EUR, the freelancer can use this number to calculate how much remains in the budget for business-related items like supplies, equipment and tools. Keeping accurate records can help you to determine your income to expense ratio. This is very important for maintaining long-term solvency.

Invoice as a freelancer in Malta

Creating invoices is a normal part of daily business activities. However, the method you use to generate invoices can have an impact on your freelance business. Branding is an important aspect of every interaction with your clients. The Xolo Go platform offers freelancers the ability to instantly generate invoices; this is a viable solution that many freelancers can use to stay compliant when invoicing cross-border clients.

The Xolo solution is also capable of calculating the VAT automatically. This can save you time when doing invoicing in Malta. There is a business dashboard that you can review in real time. It even helps you to set up a business bank account. Getting paid and managing expenses is easier when you use a software platform like Xolo. Invoicing is a normal part of business activities in Malta, but you can leverage various features of Xolo Go to make the experience as smooth as possible.

the freelancer's favorite pay-as-you-go invoicing tool

Steps to Start a Business in Malta

Initiating your freelance business management in Malta can be an exciting and rewarding journey when you're fully prepared. There are a few formalities that will need your attention before you can focus on growing your business. This includes registering your business, insurance, obtaining a VAT number, selecting a name for your company and setting up bookkeeping to maximize tax expenses. Remember that networking is also a big part of starting a freelance business, so be sure to create a plan to get your services noticed.

Here are the details on how to start your freelance business in Malta.

  1. Register at the JobsPlus website: Look for the form called the self-employment engagement form, and print it out in your language. Send it to the address listed on the form.
  2. The national insurance for employees is called the NI; self-employed individuals are responsible for this insurance.
  3. Obtain a VAT number, if applicable: Visit the Office of the Commissioner of Revenue website for details.
  4. Set up your business bookkeeping:
  5. Once you start the business, you will have to recruit and retain new clients to generate the desired revenues.

 

Xolo Leap products help freelancers prepare to maximize tax benefits. You can acquire an e-Residency so you can manage your operations from any location throughout the world. With Xolo Leap, we’ll help you register your Estonian one-person business, handle the tax returns and our legal & compliance professionals will ensure your business is managed with no legal worries.

Conclusion

Freelancing in Malta offers self-employed individuals the opportunity to experience a lower cost of living, friendly business environment, incredible scenery and a flexible work schedule. This comes with a minimal amount of responsibility for registration and insurance obligations, so it’s an ideal solution for free-spirited people looking to increase the balance between work and living. The Maltese islands offer an idyllic landscape and plenty of networking opportunities. The lower cost for housing and food will help to offset some of the ordinary business expenses.

Good business practice is always a matter of careful planning and strategic thinking. However, there’s no need to reinvent the wheel. Xolo Go offers a unique model to streamline common freelancer problems like invoicing, registering and compliance across borders without registering a business. Xolo Leap, on the other hand, enables freelancers to start a company based on e-Residency. 

Stay compliant with all of the tax laws of Malta and live your dream freelance life with Xolo.

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