It is the first real decision most Fiji businesses make, and it is usually made on instinct — someone said you should have a company, so you get a company.
Sometimes that's right. Often, at the start, it isn't. Here is what actually differs.
The tax comparison
As a sole trader, business profit is your personal income, taxed at resident individual rates:
$0 to $30,000: nil
$30,001 to $50,000: 18% of the excess over $30,000
$50,001 to $270,000: $3,600 plus 20% of the excess over $50,000
Above $270,000: rates climb from 33% to 39% at the top of the scale
Note that Social Responsibility Tax is no longer a separate charge. It was merged into the personal rate bands with effect from 1 January 2024, which is why the rates above $270,000 look higher than the 20% many people remember. FRCS's own tax rates page still shows the old split structure and should not be relied on.
As a company, profits are taxed at a flat 25% — the rate rose from 20% with effect from the 2023 tax year.
Dividends out of the company are not taxed. The exemption is unconditional: any dividend received is exempt income under the Income Tax (Exempt Income) Regulations as substituted in 2017. (FRCS's published exemptions page still describes a conditional test requiring the profits to have borne corporate tax — that reflects the pre-2017 position and has not been updated.) So a Fiji private company's profits generally bear a single layer of tax.
Run the numbers and a clear pattern emerges:
Profit under about $50,000: the sole trader is well ahead. The first $30,000 is tax-free and the next slice is taxed at 18%, against a flat 25% in a company from the first dollar.
Profit between $50,000 and $270,000: the individual rate is 20%, still below 25% — but the gap narrows and other factors start to matter more.
Profit above $270,000, or profit you intend to retain and reinvest: the company usually wins, and decisively. Retained profits are capped at 25% rather than climbing a personal scale that reaches 39%.
That's the arithmetic. It is rarely the whole answer.
Liability — the part the arithmetic misses
A company is a separate legal person from the day it is registered. It contracts, sues, is sued and owns assets in its own name, and members' liability is limited to any amount unpaid on their shares.
A sole trader is the business. There is no separation. Business debts are your debts, enforceable against your house, your savings and your vehicle.
For a consultant with professional indemnity cover and no stock, that may be an acceptable risk. For anyone holding inventory, employing staff, signing leases, or working on client premises, it usually isn't.
One caveat worth being honest about: banks and landlords in Fiji routinely require personal guarantees from the director-shareholder of a small Pte Ltd. Where that happens, the practical benefit of limited liability on that particular debt disappears. It still protects you against trade creditors, employment claims and tort liability — but don't assume incorporation makes you untouchable.
What each structure actually requires
Setting up as a sole trader
A TIN from FRCS, registered online through TPOS.
Business name registration with the Registrar of Companies. Note this changed: the exemption that allowed an individual to trade under their own name without registering was removed in 2020, so a business name must now be registered even if you trade under your own name.
No business licence. The Business Licensing Act was repealed with effect from 1 August 2020. Be aware that some official websites still list a "valid business licence" among required documents — six years on. It is not required.
Sector permits still apply where relevant — liquor licences, health licences for food businesses, National Fire Authority certification, and professional registration.
Setting up a company
Under the Companies Act 2015:
Application to the Registrar in the prescribed form, with a name ending in "Pte Limited" or "Pte Ltd". The government fee for registering a private company is $45 plus VAT, which shows as $50.63 on the ROC portal. Name reservation, if you use it, is a separate $50 plus VAT.
Articles of Association — a Memorandum is no longer permitted, and articles are mandatory (though you can adopt the standard form unamended)
At least one member, with a maximum of 50 for a private company (employees and certain former employees don't count towards the 50)
At least one director, who must ordinarily reside in Fiji
No company secretary required for a private company — though if you appoint one, at least one secretary must ordinarily reside in Fiji
A registered office in Fiji
Written consent from every proposed director and secretary before appointment
ID and TIN details for every individual named, plus a beneficial ownership declaration
The ongoing obligations nobody mentions at setup
This is where the two structures genuinely diverge, and where the cost of a company shows up.
A company must, every year:
Pay the prescribed registration fee within 28 days of the anniversary of registration. Miss it for twelve months and the Registrar can deregister the company.
Hold an AGM — the first within 18 months of registration, then annually and within six months of the financial year end. A single-member company need not hold one.
Pass a solvency resolution within two months after each financial year end, and notify the Registrar within seven days if the resolution is negative or if no resolution was passed. Companies that have lodged an annual report under Part 32 in the last financial year are excused.
Lodge financial reports where required by its size classification.
And now, new for 2026: the Tax Administration Act has been amended to create a Central Register of Beneficial Owners, in force since 1 August 2026. The key dates and penalties:
Existing legal persons must declare beneficial ownership information by 31 December 2026
New entities must declare within 15 days of formation, and any change must be notified within 15 days
From 2027, annual confirmation within three months of the tax year end
Failure to declare: $100 per day, with no cap and no reasonable-excuse defence
Inaccurate or incomplete information: a fixed fine of $25,000
Offence provisions: a fine not exceeding $50,000, or imprisonment up to ten years, or both
This one is not limited to companies. A parallel regime applies to trustees and administrators of trusts, including foreign administrators holding Fiji assets, and there are personal obligations on individual beneficial owners themselves. If you hold your business through a trust, you are in scope.
A sole trader has none of the above.
Audit
Company size is set by revenue under the Companies Act 2015:
Small: consolidated revenue up to $5 million
Medium: $5 million to $20 million
Large: above $20 million
Public companies and large private companies must have their financial statements audited. Small and medium private companies do not. Medium private companies prepare pro forma financial statements, which sit outside the audit requirement. You will see published commentary saying medium companies are audited — including at least one international profile of Fiji's accounting framework — but that is not what the Act says.
The one route to an audit for a smaller company is a direction from members holding 10% or more of the votes requiring full financial statements to be prepared, and even then no audit is required if the direction didn't ask for one. A sector regulator such as the Reserve Bank may of course impose its own requirement.
A sole trader has no audit obligation at all.
Provisional tax — the timing difference
Both structures pay income tax in three instalments, but on different dates:
Companies: the last day of the 6th, 9th and 12th months of the tax year — so 30 June, 30 September and 31 December for a 31 December year end.
Sole traders and everyone else: 30 April, 31 August and 30 November.
Each instalment is one third of the prior year's assessed liability, net of foreign tax credits and amounts already paid by withholding. If the prior year was a loss or a refund, no advance tax is due. Where total advance tax for a non-company is under $120, it is payable in a single instalment on 30 September.
A new sole trader isn't off the hook for having no prior year — where there is no prior-year assessment, you must file an estimate.
Underestimate and there is a 40% advance tax shortfall penalty, triggered where your estimate comes in below 100% of your actual liability. There is no 90% safe harbour, though there is a reasonable-care defence. This catches growing businesses badly: instalments are based on last year, so a good year means a large balancing payment plus a penalty if you filed a low estimate.
VAT, FNPF and the FNU Levy
VAT is structure-neutral. The compulsory registration threshold is $100,000 of gross annual turnover, and you must register within 21 days of exceeding it. The current rate is 12.5%, reduced from 15% on 1 August 2025. A sole trader crossing $100,000 registers exactly as a company does.
FNPF is where structure genuinely matters.
A sole trader with no employees has no compulsory FNPF obligation — you are not your own employee. You can join the Voluntary Membership Scheme (Fiji citizens aged 18 to 59, $10 to open, $10 minimum per transaction; a separate scheme exists for minors), and many should.
A company paying a working director a salary under a contract of employment is treating that director as an employee, which brings FNPF into play. The Act does not deem directors' fees to be wages merely by reason of holding office, so a genuine non-executive fee arrangement sits differently — but be careful: there is an anti-avoidance rule that can deem dividends paid to a working shareholder to be wages. Paying yourself in dividends to sidestep FNPF is a well-known road that ends badly.
FNPF rates changed on 1 August 2026. The mandatory employer contribution decreased from 10% to 8%; the employee rate stays at 8%. This is a temporary relief measure running from 1 August 2026 to 31 July 2027. Employers who voluntarily keep contributing above 8% and up to 10% receive a 150% tax deduction on the excess.
FNU Levy: 1% of total gross emoluments, and there is no minimum wage bill. FNU's published guidance states that gross emoluments include fees or salaries paid to directors — so a company paying one working director does pay the levy, while a sole trader with no employees has no emoluments base. The 2026–2027 Budget changed how the 1% is allocated internally, effective 1 January 2027; the headline rate is unchanged.
So which one?
A sole trader usually makes sense when you're starting out, profits are under about $50,000, you're not carrying meaningful liability risk, and you want the lowest possible compliance overhead.
A company usually makes sense when profits are consistently above the point where 25% beats your marginal rate, you're retaining earnings to reinvest, you have real liability exposure, you need to bring in shareholders or investors, or your customers are corporates and government agencies who expect to contract with an entity.
And you're not locked in — but the roll-over rules are strict. A sole trader business can be transferred into a company with a deferral of capital gains tax, but two conditions catch people out. The company must be 100% owned by the transferor — issuing one founder share to a spouse or co-founder at incorporation destroys the relief. And the deferred tax becomes immediately payable if beneficial ownership of the new company changes within two years, which directly defeats the common "incorporate now, bring an investor in next year" plan. The relief also operates asset by asset, not on "the business" as a whole. From August 2026 there is a new discretion for the FRCS CEO where a minority holder has 5% or less.
Starting simple and incorporating later is a perfectly sound plan. It just needs to be sequenced properly.
How Alvin Kumar & Associates helps
Structure recommendations based on your actual projected profit, risk profile and growth plans — not a default.
Company incorporation end to end: name reservation, articles, director consents, registered office, beneficial ownership declaration and TIN registration.
Sole trader registration — TIN, business name and the sector permits that still apply.
Beneficial ownership declarations ahead of the 31 December 2026 deadline, for companies and for trusts.
Provisional tax estimates calculated properly, so you don't meet the 40% shortfall penalty.
Restructuring from sole trader to company, sequenced so the capital gains tax deferral survives your investment plans.
Not sure which side of the line you're on? Send us your last set of numbers and we'll tell you plainly.
Email: alvin@akfiji.com
WhatsApp: +679 714 2741