Madagascar is located in the Indian Ocean 250 miles off the eastern coast of Africa across the Mozambique Channel, just south of the equator. Over 1000 miles (1580 km) long and 350 miles (570 km) wide, Madagascar is the world’s fourth largest island. Its most prominent feature would have to be the steep mountain range paralleling the entire eastern coast.
Population 26.9 million people
Total area of) 592,800 square kilometres (228,900 sq mi)
GDP 12.80 billion US dollars as of 2018
Currency Malagasy ariary
Language French, Malagasy, English
Why invest in Madagascar ?
Madagascar is blessed with abundant natural resources The abundant natural resources, These include Gemstones, oil, rear metals, minerals and so on.
Abundant fertile land with a favorable climate for any agriculture and farming activities makes the country good for agriculture investments.
Rivers, wind and sun for renewable energy production. Madagascar is blessed with a lot of water bodies this gives an advantage for investments in renewable energy.
Cheap local raw materials and labor this gives Madagascar a competitive advantage from the low costs of inputs , reduced labor costs more especially on labor intensive industries such manufacturing , textiles etc.
Access to markets, With its strategic location Madagascar has signed many trade agreements with developing , developed as well countries. This gives it access to these markets through the different trade deals.
The Attractive business environment, with the significant public and private investments in infrastructure such as roads , ports this makes it easy for setting up investments since a lot of costs are cut down
Investment incentives The government of Madagascar through the ministry of commerce offers investment incentives to investors willing to invest I the country, these incentives have attracted a lot of foreign investments in the country.
Setting up business in Madagascar.
It takes 3 procedures and 12 days to establish a foreign-owned limited liability company (LLC) in Madagascar (Antananarivo). An LLC can be entirely foreign-owned; investment authorizations are no longer required.
However, at least one of its executives must reside in Madagascar. If a newly established company (domestic or foreign) wants to engage in international trade, it must register with the Ministry of Commerce and Trade.
Companies can obtain their statistical card, tax registration confirmation, commercial registration number, and professional card at the one-stop shop.
They must also register for social security and health insurance, which can be done through the Economic Development Board of Madagascar (EDBM)’s one-stop shop. Companies in Madagascar are free to open and maintain bank accounts in foreign currency. Minimum capital requirements have been abolished.
Company / Business registration.
Anyone who plans to invest in Madagascar must register there businesses within 30 days of starting the business.
All investors must open up a local bank account and also apply for the tax identification number from the National Bureau of Statistics (INSTAT) and an RCS number from the Trade and Companies Registry .
Tourism this sector is one of the fastest growing sectors in Madagascar
There is a strong potential for growth in tourism and has shown a 30 percent increase in foreign arrivals over the past decade.
Transportation, due to the urge to improve the movement of people and their goods the government has committed itself in maintaining the existing network and building up new roads. Road transport is the main mode of transportation in the country.
Mining Sectors Madagascar is endowed with a lot of mineral resources, the is considered to hold 50%of the world’s sapphires, as well as other semiprecious gems such as amethyst and beryl. Madagascar also has deposits of iron, nickel, graphite, bauxite and uranium.
Food & Beverage Processing Sector :
The firms in Madagascar presently have lesser imports as compared to those in other parts of the sub-Saharan country. Many firms are positive about the potential for growth in the agribusiness sector of the country. Being the 4th largest island in the world, Madagascar has a potentially large access to available seafood. Many investment opportunities hence exist in Madagascar’s high quality and globally renowned shrimp industry and seaweed industry.
Principal Taxes Tax rate
Corporate income tax 23%
Turnover Tax (TOT) 20%
Excise tax 5% to 325%
Customs tax 0% to 20%
Value added tax 20%
Dividend tax 10%
The country has both skilled and unskilled labor. Wages depend on the position and the skills one has for that specific job.
Minimum wage 50USD
Monthly average wage 200USD-500USD.
Foreign investors are free to acquire land where they will carry out there operations under certain conditions.
Investors are protected
Madagascar has signed foreign Investment Promotion and Protection Agreement with some countries, such as Canada, Mauritius, France, and Germany. Such an agreement provides a framework of legally binding rights and obligations. Malagasy law recognizes private property and expropriation cannot be done without due process and appropriate compensation.
Madagascar has a number of Fiscal incentives for example Export-oriented companies can apply for Export Free Zone status and get the fiscal advantages described in the law.
Investors have a right to fair treatment , the country is a member of the International Centre for the Settlement of Investment Disputes (ICSID Convention) and under domestic law, disputes between foreign investors and the State may be handled through arbitrage proceedings administered by this institution.
Investors are free to repatriate their funds so long as they follow the right procedures .Repatriation of funds Madagascar abides by the IMF’s Article VIII statutory framework, which prohibits direct government limitation on foreign exchange use and availability.
Two government offices share responsibility for the protection of intellectual property rights: the Malagasy Office for Industrial Property (OMAPI) and the Malagasy Copyright Office (OMDA). These offices are financially autonomous bodies, despite their close collaboration with the Ministry of Industry, Ministry of Commerce, and Ministry of Culture and Handicrafts.
In nutshell Madagascar is open to foreign investments the country has a lot of untapped investment opportunities therefore the investor have a variety of sectors to choose from.