What is a sole trader activity?

Last updated: 19/07/2023

This legal form concerns natural persons wishing to carry out commercial, professional or craft-based activities.

The advantages of being a sole trader

As a sole trader, you can start your business quickly and easily, without the constraints of forming a company (drafting Articles of Association, publication formalities) and without having to set aside a minimum amount of capital.

Management as a sole trader is not subject to the same formalities as companies (having to deposit accounting documents with the Trade & Industry Register and even having to appoint auditors under certain conditions).

Points you should take into account

  • The entrepreneur's personal assets are not safe from the risks inherent in their business
  • Commercial capacity is required for commercial activities

For this reason, persons that, due to their individual or professional status are precluded from carrying out commercial activities as a professional, such as minors, adults under guardianship or curatorship, civil servants and lawyers cannot set up as sole traders.

Similarly, persons prohibited from carrying out commercial activities following a judgment declaring personal bankruptcy cannot set up as sole traders (art. 587 of the Code de Commerce).


Depending on the business, sole traders can operate in commercial or office premises.

The sole trader may work from their home if no legislative, regulatory or contractual provision is opposed thereto, if their business activities do not require clients to be received and if no staff are recruited.

It is possible, under certain conditions, to domicile the firm either with a domiciliation company or on premises occupied by another firm.

See the factsheet: Domiciling a business activity or establishing a company's registered office

Social security and tax status

Persons acting as sole traders have the social security status of a self-employed worker and must register with CAMTI-CARTI (Caisse Autonome de maladie des travailleurs indépendants – Caisse Autonome de retraite des travailleurs indépendants).

Persons of foreign nationality are subject to income tax in their State of origin, if said State has concluded a bilateral agreement with the State of Monaco for its collection.

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