DOING BUSINESS IN MADAGASCAR
Since 2003, Healy Consultants has assisted our Clients with business registration in Madagascar. Our services include i) Madagascar company incorporation ii) government license registration iii) business bank account opening iv) employee recruitment v) visa strategies and vi) office rental solutions.
Press the link headings below to read detailed, relevant, up to date information.
Advantages and disadvantages
Advantages of Madagascar company registration
- A limited liability company in Madagascar can be incorporated with a minimum of one shareholder and one director of any nationality. The minimum paid-up capital required for incorporation is US$1 and our Client will not have to travel to Madagascar to complete the process;
- Business operation costs are low in Madagascar because i) the average monthly salary of the staff in Madagascar is US$50 according to the World Bank ii) office space monthly rent is approximately US$8 per square meter and iii) business between Madagascar and neighboring countries is easily facilitated by road, rail, sea and air.
Disadvantages of Madagascar company registration
- French is the official language of Madagascar therefore all business documents must be translated into French prior to incorporation of a company. For our non-French speaking Clients, language will be a barrier when doing business in Madagascar;
- Although company incorporation in Madagascar is straight forward due to the one-stop-shop EDBM, obtaining the proper licensing to do business can take up to an additional 12 weeks due to red tape, lack of transparency and corruption. Healy Consultants will be happy to help you handle your administrative requirements;
- The political climate in Madagascar is unstable and this has led to some donors suspending aid and the South African Developing Community suspending membership of Madagascar. Consequently, foreign direct investments have been discouraged and this has led to very slow economic growth, recorded at only 2.1% in 2013;
- Exchange controls exist in Madagascar where i) current operations which include financial remittances abroad and these require a declaration to a bank in Madagascar and ii) capital operations including stock transfers, shares of liquidation bonuses, sale of businesses or assets and compensations for expropriations and these require authorization from the Ministry of Finance.
Best uses for a Madagascar company
- African headquarters: Madagascar is an ideal location to setup a headquarters for business in Africa as the country i) is a member of the South African Development Community (SADC), Common Market for Eastern and Southern Africa (COMESA), Communauté de l’Océan Indien (COI) and the Indian Ocean Rim Association (IORA) and therefore offers investors access to trade with these markets and ii) has six world class ports facilitating ease of import and export of goods;
- Export company: Madagascar offers incentives such as VAT refunds to professional export companies so as to promote and stimulate operations within the export processing zone (EPZ). Companies within the EPZ are tax exempt for the first 5 years after incorporation and thereafter the corporate tax rate payable is at a reduced rate of 10%;
- Primary industries: Madagascar boasts natural resources such as graphite, coal, salt, gemstones and quartz which are great for investment opportunities in the mining industry. The country also vast areas of beaches and unique flora and fauna, plus lots of arable land with growth potential which are great for investment in tourism and agriculture industries.
- Time to incorporate: Two weeks
- Cost to set up: US$8,340
- Minimum capital: US$1
- Physical office required: No
- Shareholders: 1
- Directors: 1
- Company secretary: No
- Resident director: No
- Corporate tax rate: 20%
- Corporate tax base: Territorial
- Shelf companies: No
- Main company type: SARL