Every year, more and more people join the ranks of the self-employed in Jamaica. Some seek this route in desperation as they can’t find a regular job, while for others it’s the fulfillment of a long-held dream. Whatever the reason that motivates you to become your own boss, it’s important to start out the right way.

There are some initial requirements that must be carried out to ensure that you’re operating in accordance with Jamaican laws. Let’s take a look at some of the legal steps involved in becoming self-employed:

1.   Register at the Companies Office of Jamaica

It’s actually illegal to operate a business without first registering the name with the Companies Office of Jamaica (COJ). Any individual or firm with an established business place involved in the trading of goods has to be registered, and if you’re providing a service using a name other than your given name, you must register that name.

Sole proprietors apply with a BN1 form, while two or more operators fill out a BN2 partnership form. To complete your application, you will need to bring your Tax Registration Number (TRN), a valid photo identification card, and proof of address such as a utility bill with your name and location.

If you’re selling goods you will also need three passport-sized photos certified by a Justice of the Peace or an attorney at law. The cost to register is currently J$2,000 for the regular three-day wait, and an additional J$1,500 for express one-day service.

A search will be done to ensure that your business name is available and that it is not too close to that of an existing operation. Then the COJ will issue a business name certificate, which expires after three years.

This document must be renewed at that time, as failure to renew promptly will result in late fee of J$1,000. If you cease operations, you have to go back to the COJ to close out the business, which currently costs J$600.

2.   Get a business NIS number

Visit the National Insurance Scheme (NIS) office to apply for a business NIS reference number. You will need to take your personal NIS card and your business registration certificate. If you’re a married woman and you had changed your name, and your NIS card is still in your maiden name, bring along your marriage certificate to update your NIS card. This registration is free.

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You need to request a NIS clearance letter which confirms your registration and states the start date or expected start date of your tax obligation. It’s best to register for NIS even before you start operating. If you indicate that you received income prior to registering, you will need to make some back payments before you can get the clearance letter. This might involve visiting a nearby post office to purchase J$20 NIS stamps for each week you worked. Next week I will go into more details about the tax requirements for the self-employed.

3.   Register for a business TRN

You will need to get a TRN for the business itself, which can be obtained from the nearest taxpayer registration centre. Take along your business registration certificate, the NIS clearance letter, your personal NIS card, and a valid photo identification such as a passport, drivers license, or voters ID. Registration is free.

4.   Register for GCT

Although you are not required to collect General Consumption Tax (GCT) until you have earned an income of J$1m from trading or the provision of a service, you still need to register at the Inland Revenue Office for GCT. Based on the expected income figure you state on the application form, you may get a provisional number. Once you reach the J$1m mark you can start paying over the GCT collected. Registration is free.

Some small operators may also need to apply for a Tax Compliance Certificate (TCC) if they plan to be involved in export or import, or to get government contracts. These additional steps would need to be done to receive a TCC:

5.   Get clearance from NHT

You will need a clearance letter from the National Housing Trust (NHT) to prove that you are up to date with your payments. If you were previously employed, you should already have been paying NHT. If there was a lag in your contributions then you have to prove how you were maintained if you weren’t working. Take in your TRN, NIS card, and business NIS. An application form must be completed and interview will be carried out. There is no charge for this letter.

6.   Go to the Income Tax office

You need to take your business registration certificate, the clearance letters from NIS and NHT, and your photo identification to the income tax office to apply for a TCC. You will be interviewed about your personal life and your business situation. If the officer is satisfied that you are compliant, then you will be sent to another department to receive your TCC, which is free of cost.

Now that you have learnt all the start-up requirements for the self-employed, next week we will look at what it takes to keep tax compliant.