How to Register a Sole Proprietorship (Empresário em Nome Individual) in East Timor

Setting up as an independent contractor in East Timor can be attractive for its flexibility, low startup costs, and the freedom to manage your business directly. You don’t need partners or a formal company structure, which makes it easier to begin working quickly.

That said, registering a business in East Timor still involves some bureaucracy. Applications are usually handled in person, and several agencies may be involved before your registration is complete. The process requires patience and a clear understanding of the tax and legal obligations, especially if you are a foreign national.

Despite these hurdles, many choose this path because it allows full ownership, simple management, and fewer ongoing requirements compared to running a company.

Disclaimer: This article is for informational purposes only and is not a substitute for legal or tax advice. Always verify with official sources or engage professional counsel before taking action.

What is a sole proprietorship in East Timor?

In East Timor, the equivalent of a sole proprietorship is called Empresário em Nome Individual (often abbreviated ENIN).
You might also see it referred to as:

• Sole trader
• Self-employed worker
• Independent contractor

These are just different terms for one person legally running a business without incorporating a separate company.

How does a sole proprietorship (Empresário em Nome Individual) work in East Timor?

ENIN vs. other business structures in East Timor

While setting up as a sole proprietor (ENIN) is the simplest way to run a business in East Timor, it’s not the only option. Entrepreneurs who want liability protection or plan to scale may choose to establish a limited company. Here is a comparison of ENIN against the most common alternative structure, the single-shareholder limited liability company (Sociedade Unipessoal por Quotas – UNIPESSOAL, LDA).

Step-by-step guide: how to register a sole proprietorship in East Timor

Step 1: Check your eligibility

To register as an ENIN, you must be a resident of East Timor or otherwise hold legal status in the country. Foreign nationals are permitted to fully own businesses (except in restricted sectors) and may register a sole proprietorship if they have the appropriate visa or residence permit. You will also need to obtain a tax identification number (TIN), sometimes referred to as a fiscal identification number.

Step 2: Choose your business name

You need to select a unique business/trade name and obtain a Certificate of Uniqueness for that name. The name must not conflict with existing registered names. You can check the names of existing companies by reviewing the lists of trade names on the government website. Once approved, you’ll use that name in your registration forms.

Step 3: Gather required documents

You must compile the following documents (with official links where possible):

• Completed Form SERVE_F_1-3 (business registration form)
• Proposed business name (Certificate of Uniqueness)
• Physical address of your main office and map/location plan
• Identification (identity card for Timorese; passport for foreigners)
• Marriage certificate or other civil status documents, if applicable — this is only required if your civil status affects your legal name or official records
• Proof of residence/visa status (for foreigners)

Step 4: Register with SERVE

Submit your registration documents in person to SERVE, I.P**.** SERVE acts as a one-stop shop for business licensing and registration.

Step 5: Pay registration fees and contributions

As of 2025, there is no registration fee for registering a business with SERVE. However, there may be fees for ancillary licenses, local checks, or permit registrations depending on your business activity. After registration, you may need to pay taxes, social contributions, or service taxes depending on your income.

Step 6: Complete post-registration obligations

After registration, an ENIN must apply for a TIN through the Autoridade Tributária Timor-Leste (ATTL)—or the National Directorate of Domestic Revenue—and obtain a business license (trade permit) from the Ministry of Commerce & Industry or the relevant authority (if applicable to your activities). You must also comply with invoicing rules, including charging and remitting service tax when required. Record keeping is mandatory: you should maintain invoices, receipts, profit and loss statements, and submit tax returns on schedule. Social security contributions may apply if you hire employees. Finally, you must keep your registration updated, including renewals or any changes to address, ownership, or business activity.

Financial and tax obligations for sole proprietors in East Timor

You are responsible for:

• Income tax: Sole proprietors (ENIN) are subject to 10 % income tax on taxable profits, payable to the ATTL. Income is declared annually in the personal or business income tax return. Non-residents are also taxed at a flat 10 % on Timor-Leste-sourced income.
• Services tax (designated industries only): If you operate in hotel, restaurant/bar, or telecommunications services, and your monthly turnover exceeds $500 (USD), you must also pay 5 % services tax on gross receipts. This is filed monthly through the ATTL. Businesses outside these sectors do not pay this tax.
• Social security contributions: There is currently no compulsory social security scheme for self-employed individuals in Timor-Leste. However, if you employ staff, you must register them with the social security system and remit contributions on their behalf. Rules on voluntary contributions for the self-employed are under discussion, so it is important to check regularly with the Ministry of Finance.
• Record-keeping: Sole proprietors must maintain proper accounting records, including invoices, receipts, expense logs, and tax returns. Documentation should be retained for at least five years, as the tax authority can request access for audits.
• Invoicing: Every invoice must include your business name, address, TIN, the client’s details, a clear description of goods or services, the date, and the total amount. If you are subject to services tax, invoices must also show this separately. Invoices must be numbered sequentially and stored for your 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
• Create, send, and sign localised work agreements
• Keep accurate records for tax season
• Access expert tax advice and compliance support
• Get paid through multiple payment and withdrawal methods
• 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 an ENIN in East Timor?
There is no fixed minimum capital requirement for a sole proprietorship (ENIN).

Do ENINs need to register for VAT/GST?
East Timor operates a services tax model rather than a formal VAT/GST. ENINs must charge a services tax of 5% for certain activities.

How much are the standard monthly or annual contributions?
Accurate, up-to-date data on social security contributions is not publicly well-documented for sole proprietors in 2025. You must consult the National Directorate of Domestic Revenue or the Finance Ministry for the latest rates.

Can an ENIN hire employees?
Yes, a sole proprietor may hire employees, but then the proprietor must comply with employment laws, payroll tax withholding, labor contracts, and social security contributions for employees.

How long does it take to register as an ENIN in East Timor?
If all documents are in order, registration can be completed in 1–5 business days.

Can foreign nationals register as ENIN in East Timor?
Yes—foreigners are allowed to own 100 % of most businesses. You must hold a valid visa, residency permit, or working permit as needed.

Do ENINs need a separate business bank account?
It’s not legally mandatory in many cases, but strongly recommended for clarity in accounting, separating personal and business funds, and meeting banking or tax scrutiny.

What happens if I stop working as an ENIN?
You must deregister your business with SERVE, submit a final tax return, and cancel any licenses.

Are there any government incentives or reduced rates for new ENINs?
As of 2025, there is no separate micro-entrepreneur regime or reduced rate specifically for small sole proprietors. All business operators must register and follow the same tax rules.

Can I use Deel as an ENIN to get paid by international clients?
Yes. Deel supports freelancers and independent contractors in East Timor. You can invoice clients globally through Deel, receive payments in multiple currencies, and Deel will help you with compliance by generating tax-ready reports.

Does Deel generate compliant invoices for ENINs?
Absolutely. Deel’s system creates invoices that follow legal requirements (including showing services tax where applicable) so you stay compliant locally.

Can Deel help me with taxes as a sole proprietor in East Timor?
Yes. Deel provides downloadable reports, transaction statements, and summaries you can use when filing tax returns. It does not replace a local accountant, but it simplifies recordkeeping.

Does Deel offer contracts for freelancers and ENINs?
Yes. Deel offers local-law contract templates that help protect you and your client and ensure legal clarity under East Timor’s regulations.

Can I access benefits through Deel as an ENIN?
Yes. Deel offers optional freelancer benefits—like health plans or retirement savings—that might not otherwise be available to independent contractors, giving you extra security in your work.