How to start a business in Madagascar as a foreigner (2026)
Starting a business in Madagascar as a foreigner: moderate.
Madagascar permits 100% foreign ownership in most sectors and has designated EDBM as a one-stop shop capable of completing formal registration in 2-5 business days once documents are complete. However, the US State Department's 2025 Investment Climate Statement flags significant practical obstacles: large foreign investments frequently require unpredictable presidential-level approval that can remain pending for years, and foreign companies without local partners routinely face additional licensing scrutiny and unexplained delays.
Legal framework
Madagascar Investment Law 2023 (Loi sur l'Investissement); OHADA Uniform Acts for company law; Economic Development Board of Madagascar (EDBM) as statutory one-stop-shop
Key points: starting a business in Madagascar
Foreign Ownership Limits
The Investment Law 2023 affirms that any natural or legal person of foreign nationality is free to invest and that investors in comparable situations receive identical treatment regardless of nationality. The sole economy-wide sectoral cap is telecommunications, where foreign ownership is restricted to 66%. Artisanal mining and small-scale fishing are reserved for Malagasy nationals.
One-Stop Registration via EDBM
EDBM (Economic Development Board of Madagascar) is the statutory one-stop shop for all investment registration formalities, issuing the NIF (tax ID), RCS (commercial registry number), and statistical number. Once the dossier is complete, formal incorporation of a SARL takes approximately 2-5 business days.
Minimum Capital Requirements
For a SARL (Société à Responsabilité Limitée, the most common vehicle for foreign investors), the minimum share capital is MGA 1,000,000 (approximately USD 220). For an SA (Société Anonyme), the minimum is MGA 10,000,000 (approximately USD 2,200). No paid-up-in-advance requirement exists beyond these statutory minima.
Residency of Management
Within three months of company registration, at least one managing director must physically reside in Madagascar, whether Malagasy or an expatriate holding a valid residence visa or proof of a pending application. This is a mandatory ongoing compliance requirement.
Presidential Approval Bottleneck
The 2025 US State Department Investment Climate Statement explicitly warns that many large foreign investment projects require final approval from the Office of the President, with no predictable timeframe or standardised criteria. Several major projects have remained pending for years, representing the most significant practical barrier for sizeable foreign entrants.
Land Ownership Restriction
Foreign natural and legal persons cannot directly own land in Madagascar. They may, however, enter into long-term leases of up to 99 years without prior government authorisation, renewable under applicable legislation. This does not prevent business operations but requires planning for real-estate-intensive sectors.
Sources
- state.gov/reports/2025-investment-climate-statements/madagascar
- state.gov/wp-content/uploads/2025/09/638719_2025-Madagascar-Investment-Climate-
- investmentpolicy.unctad.org/investment-laws/laws/367/madagascar-madagascar-investment-law-2023
- worldbank.org/en/businessready/economy/madagascar
- worldbank.org/content/dam/sites/b-ready/documents/pdf/Madagascar.pdf
- edbm.mg/
- privacyshield.gov/ps/article?id=Madagascar-openness-to-foreign-investment
- expatmadagascar.com/en/company-formation-madagascar/
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