Foreigners informations

Foreigners informations

By Property-Madagascar.

Foreigners informations

Foreigners informations

Informations intended to the foreigners
Diana and Mahajanga real estate agencies

Information intended to the foreigners who plan to settle in Madagascar, more particularly in the Northern region.To settle in Madagascar does not present more difficulty than in another country.


French is largely understood and spoken.
– The climate is pleasant.
– The population is welcoming.
– The cost of living is relatively low.
– The foreign investors are expected.
– The mixed couples are well accepted. This mixing can be an advantage for integration. However, it is the same for all the couples, mixed or not, if we choose badly, that can become an handicap then!

– The administration is pernickety, but that is improving. If you need 34 supporting documents for a file, ensure that there are 34 of them. If you miss one of them, make the impossible for you get it.
– The laws and regulations can change without preventing. Impossible to make estimated, even over a year…
– The basic infrastructures are non-existent or dilapidated: roads, communications (except for the telephone, very expensive certainly, but which goes), food and water and electricity (there, it is straightforwardly a catastrophe). The electricity is restored in Diego since October 2007, but in Nosy Be, it is always the dark night. Worst case: they do not want to install new meters any more!
– Complicated and irregular supplies. One day you find, one day you do not find, or you find, but with 4 times the price.
– Difficulty in finding people trained and qualified (information valid for the Northern region: in Tana, that is a little better).
– Legal annoyances. Do not believe that you will be treated better because you are foreign…
– Impossibility of reaching the land ownership in a secure way. Emphyteutic lease instead of title deed. If you live together with a Malagasy and that confidence reigns, your Malagasy spouse can be, him or her, owner.
– Absence of credit. The banks are there only to keep your money against (grace) remuneration. Come with cash…

Any foreigner can:
–work an employee in a company,
–settle a private industry or EURL,
– create a company (private limited company or SA) without having to get in a Malagasy associate,
–take shares or actions in a company even without being resident,
–buy goodwills even without being resident.

No foreigner can carry on an activity with a tourist visa.
We must have a resident visa, or all at least, a receipt of request deposit .
– We come for the first time with a tourist visa,
– We assemble the structure (company,…) or we negotiate a work contract or we buy an existing funds,
– provided with the justifying paperworks (work contract, statutes of company, etc), we leave the country to ask for a “transformable” visa (insinuation: in resident visa), which is on one month duration, by the way, but that we can easily extend in place.
– once returned, we deposit a request file of resident visa. Upon obtaining the “receipt of deposit”, we can start to exert.
– the visa investor is granted under fifteen days if we deposit it at the EDBM (see below). That can last 5 years if we deposit it at the Ministry for the Interior (we know what we speak!). Try to do everything to bring it yourself to the EDBM in Tana and to stay on the spot to leave with. Do not try to pay somebody to obtain “a true-false” visa to you. The punishment is VERY severe (there too we know what we speak!).

1 – Madagascar is classified by the organizations which advise the investors like a country “at  risk”.
You guess, according to what is known above, that the game is not gained in advance.
If we consider, moreover, that the prices on the spot are from 2 to 3 times lower than those in Europe, we understand that to come to invest in Mada, we need a certain dose either of madness or of passion.
It is not in all the cases a “reasoned” choice. Madagascar attracts adventurers who, in return for an environment of dream, lose any notion of the business as we hear them in Europe. Their motivations all are different. We do not invest; we spend our economies to give our own pleasure. Do not expect a return on investments… far from there.
If a business enables you to live quietly, it is all that you can hope for.
Here we say while joking: “Do you know how we do to become millionaire in Madagascar? “… answer:   ” It is just to arrive billionaire! “.

2 – Madagascar offers exactly what the European women DO NOT WANT. All is here contrary to their most natural aspirations. Dilapidated health environment, dubious supplies, Water and power outage, etc. Madagascar are still a ground of adventure and is not appropriate for them who are in request for comfort and security.

2-Simplified reality.
Kept for the companies carrying out annual CA ranging between 20,000,000 Ariary and 200,000,000 Ariary (approximately 8,000 to 80,000 Euros).
Principal interest: We can choose the mode with or without VAT (by default, without). This formula interests the entrepreneurs PME/PMI kind because it is difficult for them in their activity to obtain invoices with mention of the VAT. The weight of this tax (20%) can put them in danger. Thus, with a simplified accounting, we pay only the income tax of the companies (24% of the benefit).

3 – Reality.
Above annual CA of 200,000,000 of Ariary (approximately 80,000 Euros), it is the general system which applies.
Accounting with auditor, VAT at 20% and income tax of the companies (24% of the benefit). They are here the two only fiscal charges which put a strain on the companies (there is also the right of sitting of 10% on the inputs which relates to only the companies which import their raw materials).
It is the formula clearly kept for the “great companies”.

Finance law 2008 (taken back in 2009): Since January 1st, 2008, new tax provisions for the companies were adopted. The least which we can say, it is that they go in the right way. From now on there exist 3 tax modes: (to be noted that these modes apply whatever the legal form of the company) 1 – the synthetic tax. Theoretically kept for the companies carrying out annual CA lower than 20,000,000 of Ariary (approximately 8,000 Euros). We pay at the beginning of exercise a fixed price corresponding to the activity. The amount is very low. This payment includes all the taxes: the professional tax (in fact disappeared), VAT and income tax. Moreover, it exempts to hold an accounting. This flexible formula was imagined to get back in line the abstract companies which represented, by the way, 80% of the economic activity of Madagascar, but which, up to that point, did not bring back anything fiscally. But it also becomes a windfall for those which have a small nonindustrial activity (bar, small restaurant, guest house, etc).

3 – Frank companies.
The frank companies profit from banking, tax and customs advantages.
Statute kept for the companies directed towards export, and under certain conditions.
– VAT at 0%
– According to the activity, from two to five years of exemption of corporation tax, then rate at 10% (instead of 24%) the following years.
– Exemption of customs duties and import tax for all the equipment and raw materials.
– Freedom of the contributions and repatriations of capital. Freedom of movement of funds, etc
– No social advantage.

to also note that the tax security scheme of the employees is particularly advantageous. They do not pay almost anything.
It is the employer who takes the tax at the source and carries out the payment near the tax services.

In addition, the social contributions (payroll expenses + employer’s contribution) account for 21% of the grosses (21,5% in Tana).
The SMIC is of 70,025.40 Ariary (approximately 28 Euros) since January 1st, 2008. The price of a rice bag… But who would have the idea to pay somebody to the SMIC? it is justt a reference.

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