Options for registering companies in Madagascar
As the world’s fourth-largest island and located strategically in the Indian Ocean, Madagascar offers significant opportunities, in sectors related to its vast natural resources, including mining, agriculture and eco-tourism.
The country benefits from a streamlined administrative process through its Economic Development Board of Madagascar (EDBM) one-stop shop and provides a legal framework designed to attract and protect both domestic and foreign investment.
Madagascar offers international companies the following legal structures for establishing a presence:
Limited liability company (Société à Responsabilité Limitée - SARL)
- The SARL is the most widely adopted and flexible corporate structure for small and medium-sized enterprises (SMEs) in Madagascar.
- The entity requires a minimum of one shareholder and one manager (director), who can be of any nationality.
- The liability of the shareholders is limited to their capital contribution.
- While the statutory minimum capital is low (US$1 or MGA 1), a local resident officer (manager or co-manager) and a legal auditor must be appointed for ongoing compliance.
Branch office (Succursale)
- The Malagasy branch office is considered a non-independent legal entity that operates as an extension of the foreign parent company (Société de Droit Étranger).
- The branch's main role is to execute commercial activities on behalf of the parent company and its business scope is limited to that of the head office.
- The foreign head office assumes full legal and financial liability for all the branch's operations within Madagascar.
- Registration generally involves filing notarised parent company documents and appointing a local corporate agent.
Free zone company (Entreprise Franche - EPZ company)
- Companies that conduct activities entirely geared towards export (such as textiles, IT services, or agribusiness) can apply for Free Zone (EPZ) status to receive substantial tax and customs benefits.
- Key incentives include an exemption from corporate income tax (CIT) for an initial period (often two to five years), followed by a 20% rate thereafter.
- They also benefit from exemption from customs duties and Value Added Tax (VAT) on imported inputs.
- The entity must be incorporated as a Malagasy legal structure, usually an SARL or SA and obtain approval from the relevant authority to operate under the EPZ regime.
To help you choose the right structure, we have created an 'at a glance' summary table for the common company types that outlines key differences in formation processes, requirements and timelines. It serves as a valuable resource for foreign companies looking to set up or expand a business in Madagascar.
Comparison of the common types of companies in Madagascar
Information verified against Economic Development Board of Madagascar (EDBM)