Business incentives

Laws have been promulgated to improve business climates in Madagascar: Law 2007-036 of 14 January 2008 on investment Investment Law based on the principle of freedom:

  • freedom of investment for all nationalities and sectors
  • freedom to transfer profits, dividends, wages, savings
  • freedom to recruit and dismiss foreign employees
Foreign investors may freely hold up to 100% of the shares (except for telecommunications where shares for foreigners are limited at 66%) in the company. Law 2007-037 of 14 January 2008 on free zone and companies Exporting at least 95% of production Income tax rate :
  • 5-year exemption for industrial firms engaged in processing and intensive production, then 10%
  • 2-year exemption for service sector companies, then 10%
  •  15-year exemption for all other types of free zone company, then 10% Exemptions from custom tax and VAT on imports on all inputs (equipments, raw materials, construction materials, …)
Law 98-032 of 22 December 1998 on the reform of the Electricity sector Any companies may carry out a self-generation of electricity provided that at least 70% of the electricity produced is consumed for their own purposes, they may sell the remains under conditions determined by the Regulatory Body. General Tax Code Tax exemption for the import and sale of agricultural inputs, agricultural and renewable energy materials and equipment. Law No. 2001-031 of 8 October 2002 on Large Mining Investments This law supplements the Mining Code and establishes a special regime for exchange, taxation, customs, as well as law, for major mining investments. Beneficiaries of this plan are the Investors, the Holder and the Transformation Entity  which make large investments in the mining sector more than 50 billion Ariary, whose eligibility is certified in accordance with the established provisions.