How to Register a Sole Proprietorship (Sole Trader) in Sierra Leone

For many entrepreneurs in Sierra Leone, registering as a sole proprietor offers a straightforward way to begin operating a business without the complexity of forming a company. The structure appeals to freelancers, consultants, and small traders because it involves relatively few legal requirements, limited paperwork, and low costs at the point of entry. Setting up as an independent contractor also allows individuals to retain complete control over their work, manage their own schedules, and directly benefit from the profits of their activity.

However, there are also challenges to consider: preparing documentation, paying registration fees, and ensuring compliance with tax obligations. Sole proprietors also carry unlimited personal liability, which means their personal assets may be at risk if the business incurs debts.

Despite these risks, the model remains popular because it provides flexibility and accessibility for those who want to begin working independently. For many, it is the first step toward entrepreneurship in Sierra Leone, either as a long-term business model or as a pathway to transitioning into more complex structures such as limited companies.

Disclaimer: This article is for informational purposes only and is not a substitute for legal advice. Please always check official sources or seek professional guidance before taking action.

What is a sole proprietorship in Sierra Leone?

In Sierra Leone, a sole proprietorship is typically called a sole trader (or “sole proprietorship/one-man business”). The terms “self-employed worker,” “independent contractor,” or “sole trader” are often used interchangeably. The model means a single individual runs the business without forming a separate legal company.

How does a sole proprietorship (sole trader) work in Sierra Leone?

Sole trader vs. other business structures in Sierra Leone

There are alternatives to becoming a sole trader. Many entrepreneurs consider setting up a limited company for added liability protection or to access investors. Below is a comparison of how sole proprietorships differ from limited companies in Sierra Leone, so you can decide which structure best fits your goals.

Step-by-step guide: How to register a sole proprietorship in Sierra Leone

Step 1: Check your eligibility

You must be a legal adult and hold valid identification. Sierra Leone citizens can register with their national ID, while foreign nationals must present a residence or work permit. There is no capital requirement, making this a simple entry point into business.

Step 2: Choose your business name

You may register under your personal name or apply for a trade name. If you choose a trade name, it must be unique in the official registry. The OARG name search tool helps ensure no duplicates exist.

Step 3: Gather required documents

You will need:

• Completed business registration application form (from OARG)
• Copy of your national ID or passport
• Residence permit if you are a foreign national, plus two passport photos
• Proof of business address (utility bill, lease, or landlord confirmation)
• Description of business activity
• Payment receipt for the registration fee

Step 4: Register with the Office of the Administrator & Registrar General (OARG)

Submit your documents in person to the OARG office in Freetown. Registration certificates are typically issued within a few days, and you will receive proof of your business’s legal status.

Step 5: Pay registration fees and contributions

The official OARG fee for registering a sole proprietorship is Le 220. In practice, administrative costs—including forms and ancillary fees—bring the total to approximately Le 220. Payments are made directly to the OARG during submission, and you will be given a receipt to present with your application. This receipt forms part of your proof of registration.

Step 6: Complete post-registration obligations

After registering, you must obtain a Tax Identification Number (TIN) from the National Revenue Authority (NRA). This is required for filing taxes and issuing invoices. If your annual turnover exceeds Le 100,000 (equivalent to SLL 100 million in old currency), you must also register for Goods and Services Tax (GST) at a rate of 15%, which is Sierra Leone’s equivalent of VAT.

Once you are in operation, you are responsible for meeting ongoing compliance requirements. These include filing annual income tax returns, maintaining accurate accounting records, and reporting any changes in your business details to OARG. You must also issue legally compliant invoices for all transactions—each invoice must display your TIN, be sequentially numbered, and, if you are GST-registered, clearly state your GST registration number and the tax charged. All invoices and financial records must be kept for at least six years, as the NRA may audit them. If you employ staff, you are also required to register them with the National Social Security and Insurance Trust (NASSIT) and remit social security contributions.

Financial and tax obligations for sole proprietors in Sierra Leone

You are responsible for:

• Personal income tax: Sole proprietors pay progressive income tax at 15%, 20%, 25%, or 30% depending on taxable profits. Filing is done annually with the NRA.
• GST: The standard GST rate is 15%. Registration is mandatory if annual turnover exceeds SLL 100 million. Returns are usually filed quarterly with the NRA.
• Social security contributions: If you hire employees, you must register them with the NASSIT. Contributions are 15% of gross salary (10% employer share, 5% employee share). Sole traders may voluntarily contribute for themselves.
• Record-keeping: Accurate financial records—including invoices, receipts, and accounts—must be maintained for at least 6 years. These may be audited by the NRA.
• Invoicing: Invoices must include your TIN, client details, description of goods or services, date, and any GST if applicable. They must be sequentially numbered and retained for records.

Launch your contracting career and stay compliant with Deel

Registering as a sole proprietor gives you independence, but it also means handling taxes, invoices, and records on your own. Deel’s all-in-one platform helps you manage obligations without the stress. With Deel, you can:

• Automate invoicing and expense tracking with essential Bookkeeping tools
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• Keep accurate records for tax season
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• Spend your earnings in USD with the Deel Card
• Access funds early with Deel Advance
• Enjoy contractor perks from 150+ partners

Stay independent, without the admin overload. Sign up to Deel for free today.

FAQs

What is the minimum capital required to start a sole trader in Sierra Leone?
You are responsible for providing your own starting funds. There is no legally required minimum capital to set up a sole proprietorship in Sierra Leone.

Do sole traders need to register for GST?
You are responsible for registering with the National Revenue Authority (NRA) if your annual turnover exceeds Le 100,000. The GST rate is 15% on taxable supplies.

How much are the standard registration and administrative fees?
You are responsible for paying Le 220 as the official OARG fee. In practice, you should budget about SLL 220,000 to cover application paperwork and ancillary charges.

Can a sole trader hire employees?
You are responsible for registering your employees with the National Social Security and Insurance Trust (NASSIT) and paying 15% of gross salaries (10% employer share, 5% employee share).

How long does it take to register as a sole trader?
You are responsible for completing your registration in about 1–3 business days, depending on OARG processing times.

Can foreign nationals register as sole traders in Sierra Leone?
You are responsible for holding a valid immigration status (residence or work permit) and providing proof of identity to OARG.

Do sole traders need a separate business bank account?
You are responsible for keeping clear records. While not legally mandatory, a separate business bank account is strongly recommended for accounting transparency.

What happens if I stop working as a sole trader?
You are responsible for notifying OARG to deregister your business (closure fee Le 50) and for submitting a final income tax return to the NRA.

Are there any government incentives or reduced rates for new sole traders?
You are responsible for checking with the Sierra Leone Investment and Export Promotion Agency (SLIEPA) or NIB for available facilitation schemes. There are currently no blanket tax reductions for new sole proprietors.

Can I use Deel as a sole trader to get paid by international clients?
You are responsible for setting up your Deel account. Deel enables Sierra Leone's sole traders to receive global payments in multiple currencies at competitive rates.

Does Deel generate compliant invoices for sole traders?
You are responsible for issuing invoices, but Deel automatically generates tax-compliant invoices you can download and send to clients.

Can Deel help me with taxes as a sole proprietor in Sierra Leone?
You are responsible for filing your taxes with the NRA. Deel provides downloadable tax reports and transaction records that simplify this process.

Does Deel offer contracts for freelancers and sole traders?
You are responsible for ensuring your contracts are valid. Deel provides locally compliant contract templates you can use safely with clients.

Can I access benefits through Deel as a sole trader?
You are responsible for choosing benefits that suit your needs. Deel offers optional access to health insurance, pension savings, and other perks usually reserved for employees.