Business entities in Madagascar in 2023

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Healy Consultants will assist our Clients with incorporating the optimal corporate structure in Madagascar. There are several ways of doing business in Madagascar, the most common being the setting up of a limited liability company. Foreign entrepreneurs may also opt to set up a public limited company, a branch office or a representative office.

The Madagascar limited liability company (Société à Responsabilité Limitée – SARL)

Madagascar business entities requirements

  • The Madagascar limited liability company (LLC), locally known as SARL, must appoint at least 1 director and 1 shareholder who can be of any nationality. The minimum paid-up share capital required to complete the incorporation process is US$1;
  • The LLC must appoint a resident representative and maintain its books of accounts in French at its registered office in Madagascar. LLCs are also required to appoint a statutory auditor and to submit annual audited financial statements.

The Madagascar public limited company (Société anonyme – SA)

  • The Madagascar public limited company (PLC), locally known as a SA, requires a minimum capital of US$800 for incorporation. At least 1 shareholder and 1 director must be appointed, whom can be of any nationality;
  • Like LLCs, the Madagascar PLCs must appoint a resident representative and books of accounts must be maintained in French at its registered office in Madagascar. Annual financial statements must be prepared and an audit must be submitted every year. A Madagascar PLC must also appoint an approved auditor.

The Madagascar free zone company (EPZ company)

The Madagascar free zone company is incorporated after approval by the EDBM. These entities must export 95% of their production in order to qualify for the EPZ incentives which include i) 15 years tax exemption ii) VAT exemption on customs duties and import of raw material iii) registration tax exemptions iv) zero rated tax on exports v) income tax not exceeding 30% of the taxable amount and vi) free access to foreign currency deposits in the company’s foreign currency bank account.

The Madagascar branch (Succursale)

The branch office in Madagascar can be 100% foreign owned. The purpose of a Madagascar branch office is to ensure proper representation of the foreign company and to provide information on behalf of the foreign entity. The scope of operations for this entity will be defined by the parent company. Also, the branch office must have a registered office in Madagascar as well as a resident representative appointed by the company to receive summons, notices etc. on behalf of the company.

The Madagascar representative office (Bureau de représentation)

While the Madagascar representative office can be 100% foreign owned, it is not allowed to carry out any income generating activities in Madagascar. All expenses of the representative office are required to be met through inward foreign currency remittances. Consequently, this entity can only engage in i) market research and ii) promoting the business of the parent company. Similarly to a branch, the parent company of a representative office must also appoint a representative ordinarily resident in Madagascar.

Table of comparison between Madagascar entities

LLCPLCFree ZoneBranchRep Office
Also known as:SARLSAEPZSuccursaleBureau de représentation
How long to set the company up?2 weeks3 weeks3 weeks4 weeks4 weeks
How long to open company bank account?2 weeks3 weeks3 weeks4 weeks4 weeks
Legal liability?LimitedLimitedLimitedLimitedUnlimited
Wholly foreign owned?YesYesYesYesYes
Minimum paid - up share capital?US$1US$800US$1US$1US$1
File annual tax return?YesYesYesYesNo
Tax registration certificate required?YesYesYesYesNo
Recommended corporate bank account?BOABNIBGFIMCBABM
Does our Client need to travel?NoNoNoNoNo
Resident director or representative required?NoNoNoYesYes
Resident shareholder required?NoNoNoNoNo
Minimum directors allowed?11111
Minimum shareholders?11111
Tax identification code needed?YesYesYesYesYes
Madagascar resident corporate agent required?YesYesYesYesNo
Corporate shareholders allowed?YesYesYesYesYes
Corporate director(s) allowed?YesYesYesYesYes
Statutory audit required?YesYesYesYesNo
Madagascar corporate tax rate?20%20%10%20%0%
Annual financial statements required?YesYesYesYesNo
Regulated by?Ministry of Finance and BudgetMinistry of Finance and BudgetEDBMMinistry of Finance and BudgetMinistry of Finance and Budget
Allowed to issue sales invoices?YesYesYesYesNo
Allowed to sign contracts?YesYesYesNoNo
Allowed to import and export goods?YesYesYesYesNo
Can rent an office space in Madagascar?YesYesYesYesYes
Can buy Madagascar property?YesYesYesYesNo
Total Madagascar business setup costs in yr. 1?US$19,155US$10,440US$11,750US$13,290US$11,190
Subsequent annual costs (incl. accounting and tax fee)?US$8,775US$4,675US$2,335US$4,825US$4,725
Sample engagement invoice?View invoice PDFView invoice PDFView invoice PDFView invoice PDFView invoice PDF

Contact us

For additional information on our business setup 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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