Knowing How To Company Incorporate in Madagascar

Located off Africa’s southeastern coast, Madagascar offers plenty of entrepreneurial opportunities. With a population of over 27 million, the Malagasy people create a welcoming environment with a large consumer base. Being the world’s fourth-largest island, Madagascar has abundant natural resources, including mineral reserves and biodiversity, which have potential for agriculture, mining, and eco-tourism. This, coupled with its favourable regulatory environment and government incentives for foreign investment and business, positions Madagascar as a promising hub for business expansion.

 

Why Choose Madagascar?

With its stunning landscapes and wildlife, tourism presents a growing market for eco-tourism and adventure travel. As for the country’s agricultural resources, coffee, vanilla, and cloves provide prospects for farming, processing, and export. Madagascar’s rich mineral reserves like nickel and cobalt attract interest in the mining sector. The growing manufacturing industry also offers textiles, garments, and electronics production potential.

The government’s efforts to streamline business registration procedures and create an attractive investment climate have attracted interest from local and international businesses. If you are considering starting a business here, there are a few things you need to company incorporate in Madagascar.

 

Starting Your Business Right

Entrepreneurs exploring these opportunities in Madagascar’s vibrant economy must conduct thorough research and embrace innovation to succeed in this promising market. Below are the steps for company incorporate in Madagascar:

Choose the Proper Business Structure

There are multiple types of business structures in Madagascar. See more below:

Public Limited Company (PLC)	Also known as Société Anonyme (SA) Minimum of one partner One director and one shareholder Three weeks to set up The minimum capital is 800 USD
Limited Liability Company (LLC)	Also known as Société à Responsabilité Limitée (SARL) Minimum of one partner One director and one shareholder Two weeks to set up The minimum capital is 1 USD
Free Zone LLC	One director and one shareholder Three weeks to set up To qualify for EPZ incentives, the company must export more than 95% of their production The minimum capital is 1 USD
Branch	One director and one shareholder Four weeks to set up Must appoint an ordinarily resident in Madagascar Must have a registered office The minimum capital is 1 USD
Representative office	One director and one shareholder Four weeks to set up Can be fully foreign-own  Cannot carry out income-generating activities  The purpose has to be to promote the parent company Must appoint an ordinarily resident in Madagascar The minimum capital is 1 USD

 

All of the entities above do not necessitate a resident shareholder. You also need to apply for a license called a “carte professionnelle” and get your company’s information recorded at the National Statistics Institute (INSTAT) via the Economic Development Board of Madagascar (EDBM).

Choose and Reserve a Business Name

Choose a business name that is clear, concise, and easy to remember and apply it at the EDBM. The business name should be unique and cannot be the same as the name of any other business registered in Madagascar. This procedure would take about a day.

Prepare the Articles of Association

The articles of association are the governing documents of your business. They set out the company’s objectives, structure, and governance. You need to prepare the articles of association and have them notarized. In Madagascar, the articles of association must be prepared in French and notarized. This means a notary public must sign them, a government official who authenticates documents.

Open a Bank Account

You need to open a bank account in the name of your business. This will allow you to deposit and withdraw funds from your business. The Malagasy government requires that all businesses have a bank account in the business’s name. This is to help track business transactions and ensure that taxes are paid correctly.

Opening a bank account in your business’s name can help protect your personal assets. Plus, many businesses in Madagascar will only do business with other businesses with a bank account. This is because it is easier for them to track payments and ensure they are paid on time.

Obtain a Tax Identification Number

The Tax Identification Number (TIN) application requires various documents, including your business registration certificate, articles of association, business name, address, and contact information. Additionally, you’ll need to pay the necessary application fee and await the issuance of your TIN. Once you have your TIN, it becomes essential for fulfilling your tax obligations, such as filing taxes and making timely tax payments.

Moreover, you must provide your TIN to other businesses with whom you conduct transactions. By adhering to these procedures and obtaining the required TIN, you can ensure your company operates legally and complies with Malagasy tax regulations. This procedure would take about a day.

 

Some Additional Details You Should Know…

Also, here are some fees you will incur:

Deed registration costs	MGA 2,000 (0.45 USD)
INSTAT registration costs	MGA 40,000 (8.88 USD)
Commercial registration fee	MGA 16 000 ( 3.6 USD)
Tax Authority registration cost (0.5% of share capital)	Conversion depends on your company’s share capital.
Provisional income tax	MGA 320,000 (71.94 USD)

 

After you have set up and paid the fees, you will receive a document known as K-Bis. This document will have a compilation of your company’s essential details, such as tax ID, registration number, etc. The official languages in Madagascar are Malagasy and French; with that said, there will be plenty of official documents that must be reported in French.

As for the tax, the corporate tax rate in Madagascar is considered somewhat lower compared to other African countries, at 20%. There are a few off-limit industries for foreigners, such as insurance, airlines, media and telecommunications. Foreigners still can own a certain percentage (usually 49%). This is to ensure the local Malagsy consumers’ and entrepreneurs’ interests are protected and not monopolised.

You are not physically required to be present when setting up a company in Madagascar. However, you still may need a visa to Madagascar even if you are not planning to travel to the country. This is because the Malagasy government may require you to have a visa in your passport in case you need to travel to Madagascar for work-related purposes.

 

How We Can Help You Get There…

Starting a business can be a lot of work. If you wish to skip the administrative tasks and focus on the core of building your business, we have a solution for you. We are 3E Accounting. For over a decade, we have been helping entrepreneurs globally to set up their businesses successfully.

So, whether you are a first-time business owner or a seasoned entrepreneur, we have everything it takes to help you ease the process. Our team comprises multidisciplinarian experts who can set up your business quickly and hassle-free. Even if you run into a problem, there is no need to worry because we are available 24/7 to help, so you can put your mind at ease and always fall back on us. For more information on how to get started, contact us.