Madagascar Establishment

Madagascar Establishment

By Property-Madagascar.

Madagascar Establishment

Madagascar Establishment

Madagascar Establishment. Real Estate Madagascar.

Diana and Mahajanga real estate agencies


Tananarive capital 1.5 million inhabitants
Population: 21 281,844 inhabitants
Surface: 587.041km ²
Currency: Ariary (MGA)
GDP: 9.94 Mds $ the World Bank (2011)

To whom is addressed this guide?

Madagascar Establishment: This guide is addressed to all the carriers of projects: company founders, potential investors, transferees of companies, in short, all those who have the role to carry out economic affairs in Madagascar.

Madagascar Establishment: It aims to inform them on the Support Facilities which exist in favour of the entrepreneurs, and the administrative and private structures which can accompany them within the framework of the realization of their project.

Madagascar Establishment: It was carried out in close collaboration with the Economic and commercial Service of the Embassy of Madagascar in Paris.

Madagascar Establishment: For a promoter whatever he is (national or foreign), nothing is more difficult than the search for information. This guide proposes to help it there.



Madagascar Establishment. The company founder or the promoter whatever he is, before launching out must check that the clients that he discount really exist and that there are nonsatisfied identified needs. The market study is thus the most important stage to study the feasibility of the project.

In France
. The Economic and Commercial council of the Embassy of Madagascar in Paris is one of the sources where you will be able to have the first informations on the nature of the market: Evolution these last years in volume and foreseeable evolution.

This service is equipped with means of promotion and necessary information to support the centers of Malagasy and French business in their searchs of exchange and partnership.

. The House of Africa in Paris: it places at your disposal an updated file of 2500 French and African companies, identification of the markets, analyzes competition and systems distribution. For these last years, this organization has published “files country” with macro-economic vocation.

. The CIAN (Council of the French Investors in Africa)
Ithastheaimofpromotingtheinterestsandtheinvestmentsoftheprivate sectorinAfrica,nearthegovernmentsoftheAfricanStatesandtheAfricanprofessional organizations.Bymaintainingapermanent connectionwiththeseorganizations,theCIANhasagoodknowledgeoftheAfricanmarket.

. The French Center of Foreign trade (CFCE)
The CFCE provides information of a commercial nature on various products and more particularly the African countries. The reference library is opened to the public on this subject. Monographs per country are sold there.

. The MEDEF (Confederation of French employers, in the past CNPF National council of French Employers)
The MEDEF develops its action in favour of the SMEs. It publishes in particular the directory of the trade association adhering to MEDEF. Its international branch has studies relating to certain markets, in particular African.
. Africa department of CCFI.This department of the Chamber of commerce resorts to series of consultants specialized in the key sectors of the economic activity (agriculture, agro-alimentary, wood, transport.) in Africa.

. Other information sources.: The NGOs for projects in social  and /or associative matter.

They have a competence in the field of set up of projects of professional reintegration by the activity creation. It is the case of: the AFRIDA, the GRDR, the CCFD, the Solidarity Water Program, Migration Development Association.

In Madagascar

Whatever the nature of your project and the investments which it could induce, the competition of the various administrations will be requested.

. The Chamber of commerce, Industry and Agriculture of Madagascar.
It has the quantitative and qualitative information in nearly all sectors and will be able to provide you with useful informations to your project.

. The Economic Expansion’s Post of the Embassy of France inTananarive. This post concerns the Department of the Foreign Economic Relations (DREE) and is directed by a sales representative specialized by branches of activity. It has in general economic information on the interior market.

.Other Sources
Agencies of council in publicity and communication of a private nature can intervene in the development of your marketing program.


It is the Law of the August 13th, 1996 to repeal the Code of the Investments which fixed the general guarantees of the investments in Madagascar. There exists from now on in the country two possibilities of investing for the foreigners and the nationals:

The investment under the common right
The investment in Free zone

The investment under the common right

– Tax provisions
The companies which invest in Madagascar can profit from a reduction of imposition on the profits corresponding to 50% of the amount of the realized investment. This tax is calculated at the rate of 35% (income tax rate on the companies). The General Tax Code does not envisage anymore a complete exoneration of the importation tax and value added tax (VAT) on the productive apparatuses (equipment, materials, building materials; accessories of factories…)

Financial provisions
Under its adhesion in article 8 of the IMF statutes, Madagascar carries out a liberalization policy of the exchanges and transfers. That’s how for example the current transfers, salaries of the expatriates, incomes of the placement in capital, fees of technical assistance, royalties are done from now on on simple banking declaration, and the dividends of the companies are not subjected any more to preliminary supporting evidence.

– Social provisions

It is assured an equal treatment of the investors on the national plan. Subject to measurement of reciprocity between States, inexistence of system for double taxation. The staff management is carried out within the framework of the Labor Code and the Code of social Welfare. The Ministry of Labour grants to the expatriates a work permit for 3 years maximum renewable under certain conditions.

– Land provisions
An emphyteutic lease is authorized on request for a duration higher than 18 years and not having to exceed 99 years. The acquisition of real properties by the foreigners is subjected to the prior approval of the Ministry for the Interior.

The investment in Free zone

The Law on the system of free zone (law n°89-027 modified and supplemented by law 91-020) applies to the investments realized by national or foreign promoters, or in association of both, in activities turned towards export.
It offers to the investor:

– A tax system reduced and at low level, with, initially a complete exoneration of income taxes for a period ranging from 2 to 15 years following the categories of companies and a fixed rate of 10% for the following years;
– A custom system ensuring an exemption of all rights and taxes on import and export;

– A financial system ensuring a free availability of the currencies and a freedom of transfer abroad;
– The possibility of creating frank companies apart from the geographically delimited free zones;
– The possibility of putting in and managing private free zones;
– The easing of the regulations concerning the job, the granting of entry and stay visa;
In complement of the incentives set up, Madagascar has a certain number of comparative advantages including:
– Important potentialities in very varied fields (agriculture, breeding, mines…) ;
– A labour very competitive, industrial, very easy to form if necessary, just as well formed executives;
– Accessibility to various exterior markets by the means of international agreements of which Lomé Convention;
– Adhesion at the Multilateral Agency of Investment protection (against the noncommercial risks)…

Description and scope

The companies of free zone consist of four categories:
1 – companies of promotion-exploitation (EPE)
They are charged on the one hand of execution of renovation and construction work, and on the other hand of management and promotion of the industrial free zones (ZFI) which are respectively entrusted to them; they can subcontract the necessary renovation and construction work under their responsibility;

2– Industrial companies of transformation (EIT);
3 – Service industries (ES);
4 – Companies of basic intensive production (EPIB);

As stipulated above, the EIT, the ES and the EPIB can profit from the free zone system, even outside the free zones especially developped and geographically delimited. Such a company is known as “frank company “. She has the same rights, advantages and obligations that the industrial companies of the free zones delimited to the same category; its surface of establishment must be materially delimited.

Rights and Obligations
Any company of free zone is bound by the public order, the rules of hygiene and healthiness, to protect the environment, fauna, the flora, the national heritage and, generally, to conform to the laws and regulations in force on the national territory.


The applicationfo approval is to be addressed at the Office of Administrative Coordination, accompanied by a file established according to a plan-type appearing in the application decree.

Madagascar Establishment


To profit from the Free zone system, the investments must obligatorily be carried out in the activities turned towards export:

– Sales abroad of goods and services originating or coming from Madagascar. The production must be exported to a total value of 95% (tolerance of 5% of the goods distributed on the local market).
– Direct sales to the companies beneficiaries of the Industrial Free zone.

The list published in the decree on application decree indicates the eligible branches of industry:

– The EIT (Industrial companies of Transformation)
Example: industries of manufacturing food substances and drink, processing industries on agricultural products and halieutics; industries of the textiles, clothing and leather…

– The ES (Service industries)
. production of cinematographic films and video;
. data processing of electronic database;
. technical tests and analyses, certification of products.

– the EPIB (Companies of basic intensive production)
. Agriculture Sector
– any agricultural and horticultural production exclusively intended for export to the exclusion of amazing plants;
– any agro-industrial unit which asks for a system of frank company for the transformation part;
. Sector Breeding and Fishing resources:
– breeding of high performance dairy cows and dairy production;
– intensive breeding of small ruminants;
– beekeeping;
– culture, conditioning and/or transformation of shellfish….

Tax compliances and customs provisions
The system of free zone offers permanent and provisional tax exemptions in various fields.
– This statute comprises a complete exoneration of the customs duties and taxes hitting the imported products, including the raw materials.                                                                          – The tax on the salary of the expatriates is limited (35% of the taxable amount) and the transfers are free.
– The income tax of Companies (IBS) is perceived at the rate of 10%. The companies are exonerated from it, according to the category to which they belong, for a duration of 2 to 15 years.

Social provisions
The staff management is subjected to the Labor Code and to the Code of Malagasy Social Welfare.
The Ministry of Employment grants to the expatriates a work permit for 3 years maximum renewable under certain conditions, a visa and a residence permit throughout work contract.

Land provisions
For the foreigners, the grounds intended for the installation of the ZFI or for the installation of frank company are subjected to a lease for a duration, fixed agreement, parts, going from 20 to 50 years renewable.

The companies of free zone are subjected to administrative control to check the conformity of their activities to the provisions of the Law on the system of free zone. They are in particular subjected to monitoring and surveillance measures exerted by the Customs and Excise and the other agents elected by the Office of administrative coordination.
No person is authorized to reside in the ZFI.

Any company wishing to carry on an economic, commercial or industrial activity must do it within the framework of a company of Malagasy right whose head office is in Madagascar.

Two forms of companies are offered to the choice of the investors:

Limited Liabilty Company (LLC)
Limited company (LTD)

The Limited liability Company (LLC)

Its social object can relate to any object, except the activities of insurance and capitalization.
– The minimum capital required is of 500,000 MGF or Malagasy franc (1FFR=960 MGF in December 1998)
– A minimum of two associates are needed.
– The subscribed shares must be released immediately.
– The bodies of constitution are formed:
. of one or more managers, associated or not, paid or not;
. of supervisory board if there is more than 20 associates;
. of the Parliament, nonobligatory for the small LLC, obligatory for the great (group decision).

– The necessary formalities are:

. private agreement or deed drawn up by a notary ;
. recording and declaration of existence at the Office of the Companies;
. deposit of the final statutes at the Clerk’s office of the Bankruptcy court;
. registration at the Service of the Statistics;
. publicity in the newspapers;
. permanent publicity on any trade paper;
. declaration at the Tax services: professional tax, income tax, taxes on value added tax (VAT);
. Adhesion at the savings bank (CNP) and the inter-companies health agencies.

– The minimal value of the partnership share is of 1.0000 MGF. The shares are freely transferable, except in the event of transfer to thirds where the agreement of the majority of the associates is necessary.
– The tax regime is the corporation taxes’. The responsibility for the manager or the associates is limited to the contributions.
N.B The status of one-person limited company (EURL) does not exist in Madagascar.
The individual Entrepreneur (having declared a private industry) is thus responsible without any limit for the liability of his company (committed personal goods).
Its tax regime can be that of the fixed price or full assessment.

Limited company

– The minimum capital required is also of 500,000 MGF. The actions must be at least of 1,000 MGF, Seven shareholders at least are necessary. The board of directors comprises from 3 to 12 members. An auditor is obligatory as well as a General Assembly of the shareholders.

The formalities are same as those necessary for the formation of a liability partnership.

– The minimum face value of the actions in a limited company is of 10,000 MGF. The actions are freely transferable.
– The tax regime is that of the corporation taxes.
– The responsibility of the leaders is limited to the contributions.
– The ¼ of the capital must be versed at the time of the subscription and the ¾ ought to be in a period of 5 years.


The creator of a private industry carries out the constitutive formalities for the legal implementation of his company.
For a LLC or LTD, it is advised to the promoter to resort to an Office of the Councils or a specialized Legal advisor.
For the constitution of limited company, the intervention of a notary is essential.



Minimum capital 500,000 MGF500,000 MGMF except financial LTD
K>5millions MGF

Private industryLimited liability company (LLC)Limited company (LTD)
Social ObjectAny object, except insurances and capitalization activitiesAny object, except insurances and capitalization activities
Minimum capital500,000 MGF500,000 MGMF except financial LTD
K>5millions MGF
Social share/ ActionMinimum Face value:
1,000 MGF
Minimum Face value:
10,000 MGF
Transfer of the sharesFreely transferable, except in case of transfer to third parties: agreement of the the associates majorityFreely transferable
Tax regimeRegime of the fixed price or full assessmentCorporation taxesCorporation taxes
Responsibility of the leader or the associatesTotal, including on staffsLimited to the contributionsLimited to the contributions
AssociatesIndividual entrepreneur onlyBetween 2 and 50At least 7
BodyIndividual entrepreneur onlyManagement
More than 20 associates: Supervisory board
Board of directors Chief executive officer Auditor
Subscription and paymentEntirely at the time of the constitution¼ of the capital to the subscription ¾ of the capital before 5 years

Madagascar Establishment


The Private industry
Limited Liability Company (LLC)
Limited company (LTD)

     1 – The Private industry

Required documents

. Certified photocopies of the national identity card or the passport or the foreign identity card of the creator in 4 copies,
. Form of declaration of licence: 2 copies (to search at the service of the Direct taxation),
. Certificate of residence in Madagascar of the creator: 1 copy (Office of Fokontany),
. Declaration of registration form (model A): 3 copies (to search at the Government Printing Office),
. the tax registration form : 1 copy (Companies Controls Tax Center)
Phase of Constitution
1. Tax declaration and recording – Place: Direct taxes office
2. Payment of the franchise or professional tax- Principal perception of the head office
3. Statistical registration- National institute of Statistics (INSTAT), Anosy
4. Tax registration- Companies Controls Tax Center, Amparibe in Antana
5. Registration at the Register of Trade- Commercial Court Clerk’s Office
6. Delivery of the professional ID card- Direct Taxes office
7. Legal notice- Government Printing Office works 3 months of time to carry out the announcement
8. Opening of a bank account- a commercial bank
N.B.: The following ones are necessary:
(Certificate of registration to the Trade register, the statistical map, the business card, presentation of the official ID card, payment amount for opening the account)

  1. Declaration of recruitment (if necessary) – Ministry of Labour
    10. Affiliation in the Social savings banks Ampefiloha for Antananarivo
    11. Adhesion at an inter-companies medical organization- OSTIE for Antananarivo.

2 – Limited Liability Company (LLC)

Edition of the Statutes

The mentions required for the edition of the statutes are:
. the company name
. the legal form
. the associates or shareholders
. the civil status of the associates or the shareholders
. the address of the head office
. lifetime of the company
. the amount and the distribution of the capital between the associates or the shareholders
. designation and the evaluation of the contributions in kind or in industry
. the number of partnership shares or actions
. the face value of a social or action share
. principal leader nomination.

N.B.: The non-residents foreigners associates can establish a procuration and a delegation of signature.
– Each contribution in kind is evaluated in view of a report annexed to the statutes and established by a commissioner to the contributions appointed unanimously by the associates/shareholders. The contributions in kind are then integrated into the capital of the company.
– The contributions in industry do not relate to the formation of the capital but entitle to the percentage of the benefit of the credit net, responsible for contributing to the losses.

Required documents

. Drafting and Edition of the statutes of the company in 10 copies
. Edition of the group decision of the associates designating the manager(s) if they (he) are (is) not statutory in 6 copies                                                                                                                                                . Certified photocopy of the national identity card or the passport or the foreign identity card of the managers in 4 copies
. Certificate of residence in Madagascar of the manager(s) in 2 copies – (Office of Fokontany)
. Form of declaration of existence for purposes of registration (Model B): 3 specimens to be bought with National Printing works
. Form of declaration of existence at the Office of the Companies: 4 copies (in Mandrosoa-Ambohijatovo for Antananarivo)
. Form of declaration of licence: 2 copies (Office of the Licences at Faravohitra for Antananarivo).

Phase of constitution

  1. Constitutive General Assembly of the associates at the head office or another place if authorized by the statutes
    N.B.: The authentification and the recording of the final statutes are carried out by private agreement.                                                                                                                                                              2. Subscription and payment of the capital
    3. Legalization of the signatures and certification of the photocopies
    (Deposits of the signatures of the manager and the associates, the copies of the statutes, the group decisions and the act of subscription to be legalized at the Town hall of the head office.
    4. Opening of the capital account of company, Place: Commercial bank
    5. Declaration of existence- Office of the Companies
    6. Publication of the creation of the company in a daily newspaper
    N.B: Mentions required: Denomination, Legal form, Capital, Object, Head office, Lifetime.
    7. Tax recording – Indirect Taxes office
    8. Tax declaration – Direct Taxes office
    9. Payment of the professional licence or tax: place on which the head office depends
    N.B.: For the preliminary evaluation, to ask for the assistance of a fiduciary cabinet or to see the Taxes General Code
    10. Registration at the Trade register at the Commercial Court Clerk’s office (Anosy for Antananarivo)
    11. Statistical registration at the National institute of Statistics (INSTAT) (Anosy for Antananarivo)
    12. Tax registration in the Companies Control Tax Center (Amparibe for Antananarivo)
    13. Delivery of the business card (Direct taxation)
    14. Legal notice (National Printing works)
    15. Opening an bank account (Commercial bank)
    16. Declaration of recruitment at Ministry of Labour, Office of Employment)
    17. Affiliation at the social savings bank
    18. Adhesion at an inter-company medical organization (OSTIE for Antananarivo)


3 – Limited company (LTD)

Edition of the statutes

The mentions required are the same ones as for the statutes of a LLC.

Required documents
. Drafting of the statutes in 12 specimens
. Project of statutes certified by the founder(s) accompanied by a mail of this one (those) addressed to the Clerk of the Bankruptcy court in 2 copies
. Form of declaration of licence: 2 copies
. Form of declaration for purposes of registration (Model B): 3 copies
. Form of declaration of existence: 4 copies
. Models of subscription form and paying-in slip (according to the number of shareholders)
. Certified photocopy of the national identity card or passport of the principal leaders, of the first administrators and of the auditor(s): 4 copies
. Certificate of residence of the Board of directors President and the Chief executive officer: 2 copies.

Phase of constitution
1. Deposit of the project of statute at the Clerk’s office of the Bankruptcy court
2. Subscription and payment of the capital
3. Opening of the capital account of company (Commercial bank)
4. Constitutive General Assembly
N.B.: Agenda:
. Approval of the statute
. Election of the board of directors
. Nomination of the statutory account(s)
. Deliberation on the contributions in kind or in industry with the assistance of registrar                      5. Réunion of the Board of directors
N.B.: Agenda: Election of the President of the Board of directors and the Administrators.
6. Legalization of the signatures and certification of the photocopies
(Deposit of the signatures of the shareholders, photocopies of identifications in 4 copies, official reports of the constitutive GA, p.v of deliberation on the contributions in 6 copies, legalization of the act of subscription and payment, statute in 12 copies (Town hall on which the head office depends)
7. Authentification of the acts by a notary
8. Declaration of existence (recording at the Office of the Companies) in Mandrosoa-Ambohijatovo for Antananarivo

– Legalized statutes stamped and authenticated in 11 copies                                                                            – Fee on the recording of the statutes:

. If capital <50 million MGF, fee = 2% of the registered capital

. If capital between 50 million and 500 million, fee = 2% for the 50 million and 1% for the rest of the capital

. If capital > 500 million, fee= 2% for the 50 million, 1% for the bracket between 50 and 500 million and 0.5% for the rest of the capital

– Reports and constitutive GA, report of the sales legalized, stamped and authenticated in 5 copies each one
–Fee on the recording of the report: from 5,000 to 10.0000 MGF each report
– Legalized constitutive act, stamped and authenticated in 5 copies
– Legalized act of subscription and payment, stamped and authenticated in 5 copies
– P.V of deliberation on the contributions stamped and authenticated in 5 copies                                   – Declaration of existence (form) in 4 copies

  1. Publication of the creation in a daily newspaper
    10. Tax recording: registration for obtaining the number of the tax file at the Indirect Taxes office
    11. Tax declaration at the Direct Tax office
    12. Payment of the licence to the Perception on which the head office depends
    13. Registration at the Trade register at the Clerk’s office of the Bankruptcy court
    14. Statistical registration at the National institute of Statistics (INSTAT)
    15. Tax registration at the Companies Center Control
    16. Delivery of the business card at the Direct Tax office
    17. Legal notice at the National Printing works
    18. Opening of a bank account in a commercial bank
    19. Declaration of recruitment – Ministry of Labour – Office of Work
    20. Affiliation at the social savings bank Office of CNAPS OSTIE for Antananarivo).


Charter of the environment

– A National Policy of Environment envisages in its general principles the actions for a durable social and economic development.
– The Setting of Accounting of Investments, emanation of the National Policy of Environment defines the procedures of environmental evaluation to which must be subjected the investment projects taking into account their technical nature, their width and the sensitivity of their establishment environment.
– The Environmental Impact Statement (EIS) relates to all the projects defined previously and those which require a preliminary administrative authorisation. It includes a description of the investment project and its incidence on the environment, an analysis of the environmental system of the site, a prospective analysis of the direct and indirect impacts and a description of the modifications made while taking account of the compensatory measures.
References: Law n° 90-033 Decree n° 95-377 on the MECIE

Industrial property

Following the adhesion of the Malagasy State to the Worldwide organization of the Industrial property (WIPO), a public corporation in administrative matter charged to manage the industrial property is created since 1992. It is the Malagasy Office of industrial property (OMAPI)
Reference: Decree n° 94-257 of the 4/19/94

Single point of contact office
It has as a role to accommodate the investors, to inform these ones on the global environment, to receive and inform the request files of approval under the system of exception (system of free zone), to notify the act of approval and to ensure the follow-up of the approved companies.
Reference: Decree n° 92-994 of the 12/2/92

Chamber of commerce, of Industry and of Agriculture (CCIA)

They intervene primarily in the informational field. A project concerning their reorganization is in study on the level of the competent jurisdictions.
Reference: Decree n° 93-021 of the 5/4/93

National council of Industry            

It is a structure of dialogue and permanent reflection between the private industrial sector and the Administration in order to promote the industrial sector.
Reference: Decree n° 94-792 of the 12/6/94

Regulation of the Imports
– The Importation of the goods and products is free and does not require prior approval nor import licence.
Reference: Decree n° 92-424 of the 4/3/92

. The importation unceasingly of currency is prohibited
Reference: Decree n° 94-134 of the 2/22/94

. The banking domiciliation is obligatory

. The system of control and inspection of the goods whose FOB value is higher than 1,000 US remains obligatory. (Office VERITAS/BIVAC)
Reference: Decree n° 3537/95

Regulation of exports
– Export of goods and services are free, except those being the object of legislative and lawful restrictions or rising from international conventions signed by Madagascar
Reference: Ordinance: n°88-015 of the 9/1/88

The exporters must repatriate their export earnings in a 90 days maximum delay (except regime of exception).

– The transfer on the Interbank Market of Currencies is done in the following way:

Repatriation of the currencies after loading of the goodsPart to be yielded on the Interbank Market of Currencies


Part to be kept in an account in foreign currencies


30 days

60 days

90 days







The chapters presented concern inter alia:
Presentation of the Malagasy customs


The Malagasy system of taxation includes: income tax (companies and people and natural people), the VAT and the other taxes.

Under the mode of the Common Right, the provisions in force are the following ones:

The Companies profit tax
This tax is perceived to a total value of 35% annually on the benefit of any nature carried out by the companies in Madagascar.

Income tax of the Movable Capital is fixed at the rates of 25%

The General Tax on Incomes on the natural people

– Paid General Tax on Incomes: Imposition on the salaries, remuneration and various allowances, imposition of the advantages in kind.
– Nonpaid General Tax on Incomes: Imposition of private industries, realized income tax coming from the exercise of an independent profession, on the income realized in company and nonliable to the Companies profit tax, on the remuneration of the associates, majority managers of the LLC.

Tax of incorporation: occasional tax perceived during the incorporation of the benefit or the reserves to the capital

Contractual tax on the transfers: Due tax because of the payments or transfers carried out to the profit of anybody being abroad and not imposed to Madagascar the taxes on the legal people, the incomes and the Professional tax.

Tax on the real capital gain : This tax sat on the capital gain of transfer subject to payment of goods or real-estate fees.

Professional taxes:
– Professional tax : This tax comprises a fix duty (dependent on the activity and its importance and a proportional duty (according to the rental value). *

– Tax of Licence: Professional tax due on the manufacturing and the sale of the alcoholic products.

Tax on the property:
–Land tax on Grounds: Tax on the estimated value of the ground, according to the practised culture.
– Land tax on the Built Property: Annual tax on the built property based on the rental value.

Registration fee: Fee during the recording, or involving the transmission of property, usufruct and enjoyment of property; changes and affected conventions of condition precedents. (fixed, proportional, progressive or decreasing duties.

– Tax on the goods, the products and services: VAT on the transactions at the rate of 20% (recoverable)
– Transaction tax (on the transactions not subjected to VAT at the rate of 5% (nonrecoverable)
– Excise duty (DA): fee charged on certain products manufactured or imported such as: drinks, alcoholic liquids, tobacco, cosmetic preparation, mining products according to the tax regime of the company.
– Royalties: Levy on the products of monopoly: tobacco, matches, alcohol, flour.


In Madagascar, it is certain an equal treatment of the investors. There is the insurance of a free operation of the company in accordance with its statutory rules.
As regards the staff management, there exists a free staff management within the framework of the Labor Code and the Code of Social Welfare.

– The work permit
It is obtained, in theory without too many difficulties, insofar as the companies of production installed in Madagascar are not subject to a limited number of work permits for the foreigners (this is especially true for the frank companies).                                                                         The procedure for obtaining a work permit is initiated by the employer near the Ministry for the Civil service, Work and Social legislation, on presentation of work contract. It is recommended to initiate the procedures of obtaining the authorization of employment before the entry on the Malagasy territory (valid 3 years maximum according to the duration of the work contract.)


In Madagascar as in most Francophone African countries, the emergence of the private sector at the end of the Eighties, gave rise to the creation of private commercial banks.

The adoption of the new banking law of February 22nd 1998, authorizing the participation of the private, both domestic and foreign in the capital of the banks and financial institutions created a climate of confidence. This law brought innovations in the Malagasy banking system (liberalization of the banking rates in order to stimulate the growth, creation of the interbank Market of currencies, modification of the credit control system within the framework of a greater empowerment of the banks.

Bank financing
Financial institutions

Abstract and alternative sources of financing
Financing at the International level

Bank financing

The Malagasy banking system is composed of half a dozen commercial banks:
Central Bank of Madagascar (BCM)
National Bank of Investment (Lyons BNI-Credit)
Bank for sale improvement (BFV)
Bank of farmer-producers (BTM)
Malagasy Bank of the Indian Ocean (BMOI) subsidiary of BNP
Union Commercial Bank (UCB) subsidiary MCB-SBSA-BFCOI

Financial institutions

Various financial institutions bring their support to the SMEs/SMIs which have difficulties in reaching the classical funding sources while setting up, either the guarantee funds, or the financial competitions.

FIARO (Investment finance ARO)

Financial institution, it takes minority financial participation in the capital of in creation or existing companies.                                                                                                                    It brings its competition:
. by participations in the capital of the future company,
. while making profit from its experiment for the legal and financial assemblies,
. while contributing in search of complementary financings.

SIPEM (Investment company for the Promotion of the Companies in Madagascar)

She proposes to bring a financial support to a dozen projects a year, either in the form of acquisition of holdings, or in the form of loans in current account.
The SIPEM ensures the study of the projects, the advices to the small entrepreneurs and the follow-up of management.

EAM (To undertake in Madagascar)

This organization in the creation and the development of the SMEs/SMIs which have difficulties in reaching the classical funding sources while setting up, either the guarantee funds, or financial competitions.

Abstract and alternative sources of financing

The banks are not interested in small firms just because they are imperceptible and do not present guarantees. However these small companies need capital to launch out and finance their development: in two thirds of the cases, it is thanks to personal capital contribution that they are created.
However, other cases can be considered. The supplier credit, for example which is regarded as an abstract source of financing because based on personal relations and capital confidence that create or allow classical commercial links between an entrepreneur and his suppliers. This practice is current in the field of the small company.
Loans can also be contracted in the family in the broad sense.

The collective savings, the tontine, reunites a certain number of people who freely co-opted themselves, and subscribe on fixed date a variable sum (from 25 francs CFA to 1 million according to the tontines) every month, every week, the market days.
Each member receives the contributions in turn and is held to the strict compliance of the rules of the tontine. Any failure means “the social death” of the contravener.

It is a form of rotating savings which gather friends or people bound by a public interest. The tontine is an efficient way to save between friends and especially to start a project (the tradesmen for their starting capital, the women who sell on the markets can use it well).

Financing at the International Level

Various organizations can intervene to finance creation, development and reorganization projects in Madagascar.

– The Agency of the Francophony. “FFS-SME” Program (Francophone Funds of Support for SMEs), finances the micro-enterprises with local strong added value, of the sectors identified like priority (building and construction, textile, agro-alimentary.). The agency can also financially intervene via the Francophone Funds of Development to answer the productive activities of the professional and co-operative associative groupings.

The International Finance Corporation (SFI) subsidiary of the World Bank Funds projects in very diverse sectors: agro-industry, tourism.

– The French Agency of Development (AFD and its Proparco subsidiary). This organization has many financial products covering the whole of the steps of a project, from financing of the prior study to that of the investments (loans in the medium and long term for the very small entreprises).

There also exists Funds of Private Projects Preparation (F3P) managed by the AFD. This funds is intended to finance the studies for creation, development and diversification or privatization projects to the profit of companies of production or of services in a competitive context favourable to the development of the country.

The European Development Funds finances any project or programs contributing to economic, social or cultural development of the ACP countries (Africa Caribbean and the Pacific) within the framework of Lomé Convention.

The Center for Industrial development (CDI) the CDI is an intermediary. It connects the entrepreneurs of the ACP countries and those of the Member States of the European Union bringing their technology and their know-how. It also plays a part of interface between the companies partners and the financial institutions likely to finance development projects.

– The European Investment Bank (EIB)
The EIB informs the requests of financing for projects or programs concerned with the industry, the mines, the tourism, the energy, the transport, the telecommunications, the agriculture. It contributes to the economic and industrial development of the ACP countries.
Functioning on a nonlucrative basis, the EIB offers advantageous financial conditions (interest rates are in general on low enough levels). It also engages, more and more, like direct partner in local funds of investment using very gravitational venture capital.

– The African development Bank (AfDB)
The AfDB is a financial institution of regional development. It finances the long-term investments of public and private enterprises. These investments can be covered by outside credit lines.


Embassy of Madagascar in Paris
4, Raphaël Avenue, 75016 Paris–Tel.:–Fax:



APCE (Agency for the Creation of Companies)                                                                                      14, Delambre Street, 75014 Paris – Tél. Fax :
Internet :
The APCE is charged on national plan to ensure the diffusion of the entrepreneurship by the promotion of creation, the transmission and the development of start-up companies. It has a role of proposals’ source near the public authorities.                                                           Within the framework of its action, it searches and develops products (handy guides, file-guides, professional cards…) and servers (Minitel 3615 APCE, Professional Kiosk-Microphone and Internet servers). It can transfer its know-how.

The House of Africa in Paris
2, Viarmes Street, 75001 Paris – Tel.: 01.55 65.35.51 – Fax: .91
It ensures the promotion of the economies of the Francophone countries of Africa while working for a better knowledge of their economies. It publishes an economic file on each one of these countries.

Africa department of the CCIP (Chamber of Commerce and Industry of Paris)
2, Viarmes Street, 75001 Paris – Tel.: .98 – Fax: .40
It is the window of the CCIP in Africa. This department exerts expert’s operational missions near the companies which make of it the request in as various fields as the search for local partners (African or French), market study and commercial approach.

Managers Without Border-Africa
24, Balmont Street, 95100 Argenteuil – Tel.: .45 – Fax: .84

The mission of this organization is to train future entrepreneurs to the technical and specific skills to carry out their projects in term (to create, manage and develop a company in touch with Africa).

2, Compiègne street, 75010 Paris – Tel. .86 – Fax .87

Organization of council, formation and development of projects on the Francophone Black Africa, AFRICADRE worked out a program whose objective is to support and to implement adequacies between the French and African SMEs/SMIs (for example to form managers out of work for French SMEs which wish to develop new markets in Africa….).

Office of the International Migrations (OMI)
44, Rue Bargue 75732 Paris Cedex 15 – Tel.: .70 – Fax: .69

The OMI intervenes in the migratory movement of return in the country of origin. It manages three procedures:
. Government aid to the reintegration
. Humane repatriation
. IQF device (Invitation To leave France). For the carriers of projects wishing to create a company in their country of origin. There exists a specific device.
D.R.E.E. (Direction of the Foreign Economic relations)
139, Bercy Street, 75572 Paris Cedex 12 – Tel.: .04

This direction which works under the authority of the Ministry for the Economy and Finances has the role of supporting the international expansion of the French companies by the promotion of exports.

French center of Foreign Trade (CFCE)
10, Iéna Avenue, 75783 Paris – Tel.: .00 – Internet:

The CFCE provides to the applicants for export legal and administrative, commercial, tax and customs information on the overseas markets. Moreover, it gives the companies of all the branches of industry, all the informations collected directly or via the French Economical Expansion Stations abroad.

Ministry for Foreign Affairs
Ministry Deleguated to the Co-operation and the Francophonie

20, Monsieur street, 75007 Paris – Tel.: .00 – Internet:

Development and cooperation agreement.

House of French people living abroad                                                                                       34, Pérouse street, 75116 Paris -Tél.: .79 – Fax: .03
Internet: http://

It receives, advises, informs, all those which plan to settle abroad to live there or work there.

The private sector unit
Club of the Sahel, 2, André Pascal, 75016 Paris, Cedex 16 – Tel.: .28

Support to the development onthe private sector and to the promotion of the investment.


Chamber of commerce, of Industry and of Agriculture
20, Paul Dussac street, B.P.166, 101 Antananarivo
Tel.: (261-20) 22-202.12 – Fax:  22-202.13

It has the role of promoting companies of all sectors in term of diffusions of economic and commercial information, of support to the creation of companies.

Grouping of the Companies of Madagascar
B.P.1338, Ambohijatovo – Tel.: (261-20) 22-238.41

Link body between the companies for specific sectors.

Association of Promotion of the Enterprises in Madagascar (APEM)
H. Rajakoba Augustin-Ankadivato Street, 101 Antananarivo
Tel.: (261-20) 22-217.63 – Fax: (261-20) .22-338.64

It has the role of promoting the entrepreneurship in Madagascar.

The Council for the Promotion of Small and medium-size companies (CPPME)
H. Rabesahala-Immeuble Madprint Street, B.P. 953,101Antananarivo
Tel.: (261-20) 22-225.36 – Fax: (261-20) 22-345.34

Technical and Economic information center
B.P.74, Ambatonakanga-Antananarivo, 101Madagascar
Tel.: (261.20) 22.253.86- Faxes: (261.20) 22.336.60

Organization of support information and documentation for the development of Madagascar. He gives access to bibliographical and sectoral databases but also to full texts of documents on the definite sectors.

National plan of Support to the Private sector managed by the Funds of Support to private sector (FASP)
Marbour building
Lalana Solombavambahoaka Frantsay 77
Antsahavola – Antananarivo (101)
Tel.: (261.20) 22.643.55/22.643.56 Fax: (261 20) 22.643.54

The funds used by the fasp result from a credit arrangement between the IDA (Bank) and the State of Madagascar

Young Economic Chamber (JEC)
Sarda n°5-Anjahana estate, B.P.5080, 101Antananarivo
Tel.: (261-20) 22-222.61/22-206.31 – Fax: (261-20) 22-337.30

Employers’ institution of the young heads of enterprises.

Young Employers of Madagascar (JPM)
65 bis, rue Pasteur Rabary-Antsahabe, 101 Antananarivo
Tel.: (261-20) 22-219.83

Employers’ federation.

Managers and Strategists Reunited (MASTER)
B.P.3, Samuel Stéphani-Ambatonankanga street, B.P.5072, 101 Antananarivo
Tel.: (261-20) 22-230.54 – Fax: 22-289.97

Organization of support.

Union of the Craftsmen of Madagascar (UAMA)
Artisanal city Mascar-Andravoahangy, B.P.7136, 101 Antananarivo
Tel.: (261-20) 22-207.53 – Fax: 22-257.31
Trade association.

Association of the Women Entrepreneurs of Madagascar (FEM)
13, Ratsimilaho-Antaninarenina street, B.P.62, 101 Antananarivo
Tel.: (261-20) 22-329.98/22-296.58 – Fax: (261-20) 22-338.32

Trade association

Grouping of the Enterprises of Madagascar (GEM)
MDRM place, Ambohijatovo, B.P.1338, 101 Antananarivo
Tel.: (261-20) 22-255.15 – Fax: 22-277.90

Trade association

National Industry Council (CNI)
Direction of Industry, B.P.527, 101 Antananarivo
Tel.: (261-20) 22-255.15 – Fax: 22-277.90

Administrative authority.

Economic Expansion Station next to the Embassy of France
B.P.671, 3 Jean Jaurès Street-Ambatomena, 101 Antananarivo
Tel.: (261-20) 22-200.08/22-245.84 – Fax: (261-20) 22-250.00

It can provide much information of economic and financial order on Madagascar.


Central Bank of Madagascar (BCM)
Antininarenina, B.P.550, 101 Antananarivo
Tel.: (261-20) 22-217.51/22-217.34 – Fax: (261-20) 22-345.32

Bank of issue

Lyons BNI-credit
74 street of June 26th, 1960, B.P. 174.101 Antananarivo
Tel.: (261-20) 22-339.51/22-228.00 – Fax: (261-20) 22-337.49

Financing of SMEs of all branches of industry.

Bank for Sale Improvement (BFV)
14 Général Rabehevitra street, B.P.196, 101 Antananarivo
Tel.: (261-20) 22-206.91/22-264.24 – Fax: (261-20) 22-345.35
Financing of the marketing companies.

Bank of farmer- producers (BTM)
Place of the Independency- Antaninarenina, B.P.183, 101 Antananarivo
Tel.: (261-20) 22-202.52 22-236.41 – Fax: (261-20) 22-213.98

This bank has the role of financing the development of the rural field.

Malagasy Bank of the Indian Ocean-BNP (BMOI)
Vogue-Antaninarenina building, B.P.25 (a), 101 Antananarivo
Tel.: (261-20) 22-346.09 – Fax: 22-346.10

Financing of all branches of industry.

Union Commercial Bank (UCB)
B.P.197, Antsahavola 101 Antananarivo
Tel.: (261-20) 22-272.62 – Fax: 22-287.40

Commercial bank.

Investment Finance ARO (FIARO)
B.P.725, Solombavambahoaka Frantsay Street 77, 101 Antananarivo
Tel.: (261-20) 22-342.600 – Fax: 22-221.47

Company of minority acquisition of holdings in the capital of companies in creation or existing.

Investment Company for the Promotion of the Enterprises in Madagascar (SIPEM)
Batch II L 110, Jajakoba Augustin-Ankadivato street, 101 Antananarivo
Tel.: (261-20) 22 – 300.98 – Fax: 22-338.64

Company of acquisitions of holdings and financial support to the small projects of which it ensures the study, the council and the follow-up.


ARO Insurances
Solombavam- bahoaka Frantsay street, B.P.4, 101 Antananarivo
Tel.: (261-20) 22-201.54 – Fax: (261-20) 22-344.64

Risk hedging

NY Havana Insurances
Ny Havana Building, 67 ha, B.P.3881, 101 Antananarivo
Tel.: (261-20) 22-267.60 – Fax: 22-243.03

Risk hedging


Agency of Francophony (ACCT)
13, Quai André-Citroën, 75015 Paris
Tel.: .00 – Fax: .98 – Internet:

Financing of the SMEs/SMIs.

European Development Funds (FED)
Ny Havana Building-67Ha, 101 Antananarivo
Tel.: (261-20) 22-242.16 – Fax: 22-321-69

International financing

European Development Funds (EFD)
European Commission- DG VIII Development
200, Street of the Law B-1049 Brussels – Tel.: 00.322.743.06.00 – Fax: 00.322.735.55.72

International financing.

Industrial development centre (CDI)
52, Av. Hermann Debroux, B-1160 Brussels
Tel.: 00.322.679.18.11 – Fax:  00.322.675.26.03

Role of interface between the companies and the financial institutions which finance the development projects.

The World Bank subsidiary International Finance Corporation (IFC)
66, Av. of Iéna, 75116 Paris – Tel.: .60 – Fax: .71

Financing of the SMEs/SMIs.

Representation of the World Bank in Madagascar
1bis, P.Lumumba street Tsaralalana, B.P.4140, 101 Antananarivo
Tel.: (261-20) 22-289.17 – Fax: 22-329.02

International financing. International credits lines were open in order to help to the creation of companies.

French agency of Development (AFD) Proparco.
5, Roland Barthe Street, 75598 Paris Cedex 12 – Tel. .31 Fax .39

Financing of the SMEs/SMIs.

AFD Proparco in Madagascar
B.P.557, 101 Antananarivo – Tel.: (261-20) 22-200.46 – Fax: 22-223.18

Financing of the SMEs/SMIs.

European Investment Bank (EIB)
100 Bd Konrad Adenauer, L 2950 Luxembourg
Tel.: 19.352/43.79 – Fax: 19.352/43.77.04

International financing.

International Monetary Fund (the IMF)
9, Rainitovo street, B.P.4243, 101 Antananarivo
Tel.: (261-20) 22-289.35 – Fax: 22-.294.50

International institution

22, Rainitovo street B.P.1348, 101 Antananarivo
Tel.: (261-20) 22-34859/22-348.60 – Fax: (261-20) 22-347.96
International financial support in favour of the development.

Madagascar Establishment BIBLIOGRAPHY

– Guide of the Investor in Madagascar
– How to create its company in Madagascar
– Rules applicable to the industrial and commercial activities.
Documents carried out by the Economic Service of the Embassy of Madagascar in Paris, February 1999.
– To invest in Madagascar
Information on the website of the Management of the Foreign Economic relations (DREE) in France.

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