Madagascar company registration

DOING BUSINESS IN MADAGASCAR IN 2022

pay fee by instalmentsbusiness setup without travelGuaranteed solutions

Since 2003, Healy Consultants Group PLC 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.

Summary LLC Fast business setup solution Free zone LLC Public limited company Representative office Branch office
Also known as SARL SARL EPZ S.A Bureau de représentation Succursale
Best use of company? All products and services Close a customer deal now Manufacturing and export trading To secure public funding Marketing & research Specific projects
How soon can you invoice Clients/sign sales contracts? 6 weeks 2 weeks 10 weeks 12 weeks NA 6 weeks
How soon can you hire staff? 6 weeks 2 weeks 10 weeks 12 weeks NA 6 weeks
How soon can you sign a lease agreement? 2 weeks 2 weeks 2 weeks 2 weeks 2 weeks 2 weeks
How long to supply corporate bank account numbers? 6-8 weeks 2 weeks 6 weeks 8 weeks 6 weeks 6 weeks
How long to supply company registration / tax numbers? 6 weeks 2 weeks 6 weeks 6 weeks 6 weeks 6 weeks
Corporate tax rate on annual net profits? 20% 20% 0% 20% 0% 20%
Limited liability entity? Yes Yes Yes Yes No No
Government grants available? No No No No No No
Government approval required for foreign owners? No No No No No No
Resident director/partner/manager/ legal representative required? Yes Yes Yes Yes Yes Yes
minimum paid up share capital? none none none US$ 650 none none
Can bid for Government contracts? Yes Yes Yes Yes No Yes
Corporate bank account location? Bank of Africa MCB Société Générale Bank of Africa BGFI ABM
Can secure trade finance? Yes Yes Yes Yes No Yes
VAT payable on sales to local customers? 20% 20% 20% 20% None 20%
Average total business set up engagement costs? US$9,340 US$ 21,685 US$ 11,750 US$10,440 US$11,190 US$13,290
Average total engagement period? 3 months 2 months 3.5 months 4 months 3 months 3 months


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Accounting and tax considerations LLC Fast business setup solution Free zone LLC Public limited company Representative office Branch office
Statutory corporate tax payable? 20% 20% 10% 20% 0% 20%
Legally tax exempt if properly structured? No No No No No No
Group HQ tax incentives? No No No No No No
Must file an annual tax return? Yes Yes Yes Yes No Yes
Must file annual financial statements? Yes Yes Yes Yes Yes Yes
Must appoint an auditor? No No No Yes No No
Access to double taxation treaties? Yes Yes Yes Yes No Yes
Withholding tax on payments to foreign shareholders? 0% 0% 0% 0% None 0%
Company Registration LLC Fast business setup solution Free zone LLC Public limited company Representative office Branch office
Resident director/partner/manager/ legal representative required? Yes Yes Yes Yes Yes Yes
Minimum number of shareholders/partners? 1 1 1 1 Parent company Parent company
Maximum shareholding for foreigners? 100% 100% 100% 100% 100% 100%
Minimum statutory paid up share capital? none none none US$ 650 none none
Security deposit to be kept with Government? No No No No No No
Shelf companies available? Yes Yes No No No No
Time to incorporate a new entity? 1 month 2 weeks 1.5 month 1.5 month 2 months 2 months
Can easily convert to a PLC? Yes Yes Yes Yes No No
Public register of shareholders and directors? Yes Yes Yes Yes Yes Yes
Can have preference shareholders? Yes Yes Yes Yes No No
Business Considerations LLC Fast business setup solution Free zone LLC Public limited company Representative office Branch office
Good entity for trademark registration? Yes Yes Yes Yes No Yes
Can secure an import and export license? Yes Yes Yes Yes No Yes

Sponsorship by a local citizen required? No
Our Client needs to travel to Madagascar for business set up? No
Temporary physical office solutions available? Yes
You need a local resident as bank signatory? No
Can be wholly foreign owned? Yes
The entity will likely be regulated by? EDBM
Minimum number of directors/managers? 1
Monthly VAT reporting to the Government? Yes
Must sign an office lease agreement during incorporation? No
Shareholders & directors documents to be attested/translated? Yes
Each foreign director needs a personal income tax number? No
Foreign director needs a residence visa? No
Maximum number of staff allowed? No maximum number for any entity
Expatriate to local staff ratio? None
Can secure residence visa for business owner? Yes
Other useful information
What will be included in my customer sales invoice? Click link
This country has signed free trade agreements? Yes
This country is a member of WIPO/TRIPS? Yes
This country is a member of the ICSID? Yes
Average custom duties suffered? 9.20%
Government foreign investment approval required? No
Average monthly office rental? (US$ per sq m) 20
Minimum statutory monthly salary? 53
Average monthly US$ salary for local skilled employees? 160
US$ deposit interest rate? (1 year average) 1%
Overseas remittance currency controls? None
Banking considerations
Multi-currency bank accounts available? Yes
Corporate visa debit cards available? Yes
Quality of e-banking platform? Poor
Crowd funding available in this country? Yes

Madagascar business setup summary

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  • Advantages and disadvantages

    Advantages of Madagascar company registration

    Madagascar business registration

    1. 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;
    2. 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;
    3. Business incorporation in Madagascar has been streamlined by the introduction of the Economic Development Board of Madagascar(EDBM) one-stop-shop for registering a business. This has allowed the process of setting up a business to be relatively simpler than in many African countries.

    Disadvantages of Madagascar company registration

    1. 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;
    2. 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;
    3. 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;
    4. 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;
    5. The political climate in Madagascar is volatile and consequently is the main obstacle and risk faced by both local and foreign investors. Though there are some improvements with South African Developing Community lifting suspension on Madagascar in 2014, the country still faces challenges with corruption, which has caused a slowdown in foreign direct investments, hindering economic growth prospects.
  • Best uses for a Madagascar company

    1. 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;
    2. 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%;
    3. 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.

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Useful links for Madagascar

Contact us

For additional information on our company registration services in Madagascar, please contact our in-house country expert, Mr. Apurv Trivedi, directly:
Consultant at HC - apurv
  • Mr. Apurv Trivedi
  • Principal - Client Engagements
  • Contact me!
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