Can I convert my sole proprietorship into a limited company later?

Maltese law does not provide a direct 'conversion' mechanism that automatically turns a sole trader business into a limited company while preserving the same legal identity, since a sole proprietorship and a company are fundamentally different legal structures under the Companies Act, Chapter 386 of the Laws of Malta, a company being a separate legal person and a sole trader simply being an individual conducting business in their own name. In practice, the usual approach is to incorporate a new private limited company and then formally transfer the relevant business assets, contracts, and, where relevant, employees into the new company, which may involve reassigning supplier and client agreements, updating any licences or permits into the new company's name, and properly documenting the transfer for tax purposes with the Malta Tax and Customs Administration. This transfer needs to be planned carefully, particularly around VAT treatment of the asset transfer and continuity of any existing contracts, so it is worth structuring the transition with an accountant and lawyer to avoid gaps in your business's legal or tax standing.