Madagascar

Population

Population Projections (millions)

Source: United Nations Population Division, Department of Economic and Social Affairs.

Population Residing in Urban Areas (%)

Source: United Nations Population Division, Department of Economic and Social Affairs.

Youth Literacy Rates (2017, %)

Source: United Nations Educational, Scientific and Cultural Organization, UNESCO Institute of Statistics.

Labour

Unemployment (2018, % of Total Labour Force)

Source: World Bank, World Development Indicators 2019.

Labour Force (2017, % of Ages 15+, Modeled ILO Estimate)

Source: World Bank, World Development Indicators 2019.

Economy Overview

GDP

Source: World Bank, World Development Indicators 2019.

Value Added by Sector (% of GDP)

Source: AFDB Socio Economic Database.

Trade Profile

Import Partners (Imported Value, thousands, USD)

Source: International Trade Center COMTRADE Statistics.

Export Partners (Exported Value, thousands, USD)

Source: International Trade Center COMTRADE Statistics.

Madagascar’s Top Import Products (USD ‘000)

Source: COMSTAT database

Madagascar’s Top Export Products (USD ‘000)

Source:: COMSTAT database

Investment Profile

FDI Inflows (millions of USD)

FDI Outflows (millions of USD)

FDI Inward Stock (millions of USD)

FDI Outward Stock (millions of USD)

FDI Inflows Main Source Countries (in terms of number of projects)

France, India, UK, United States, Canada, Germany, Mauritius, China, Japan, and Kuwait.

Source: Financial Times, fDi Markets, 2018

FDI Inflows Main Sectors (in terms of number of projects)

Financial Services, Communications, Metals, Business Services, Food & Tobacco, Transportation, Chemicals, Coal, Oil and Natural Gas, Minerals, and Real Estate.

Source: Financial Times, fDi Markets, 2018

FDI Inflows Main Companies (in terms of number of projects)

MicroCred Bank Madagascar, Airtel Madagascar, Symrise, Rio Tinto Group, CMA CGM, Verizon Communications, Forever Living Products International, Bank of India (BOI), Broll Property Group, and Vanco Energy.

Source: Financial Times, fDi Markets, 2018

Doing Business

Overall Doing Business Ranking

Source: World Bank, Doing Business, 2020

Starting a Business

*GNI per capita used: USD 440
Source: World Bank, Doing Business, 2020

Paying Taxes

Paying Taxes

Source: World Bank, Doing Business, 2020

Trading Across Borders

Assumptions

• It is assumed that shipment travels from a warehouse in the largest business city of the exporting economy to a warehouse in the largest business city of the importing economy.
• It is assumed that each economy imports a standardized shipment of 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed that each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product.
• A shipment is a unit of trade. Export shipments do not necessarily need to be containerized, while import shipments of auto parts are assumed to be containerized.
• Shipping cost based on weight is assumed to be greater than shipping cost based on volume.
• If government fees are determined by the value of the shipment, the value is assumed to be $50,000.
• The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, airport or land border crossing.
• Time is measured in hours, and 1 day is 24 hours.
• Costs do not include tariffs.

Source: World Bank, Doing Business, 2020

Investment Regime

Legal Framework

Investment Code – Law N. 2007-036 of the 14th of January 2008.

Key guarantees in terms of investment protection include:

• Any natural person or legal entity, Malagasy or foreign, is free to invest and settle down on the national territory, in accordance with the laws and regulations in force.
• Foreign and Malagasy investors are equally treated.
• Foreign and Malagasy investors are free to hold up to 100% of the shares or stocks of the company.
• The state guarantees that the individual or collective patent rights are respected.
• Foreign or local investors are authorised to freely transfer abroad without prior authorisation all profits after full payment of taxes, dividends, miscellaneous payments and repayments

Source: Economic Development Board of Madagascar (EDBM)

Investment Incentives

• Preferential regime of FTZs, exclusively for activities directed towards export. This includes:
  • EPZ firms benefit from an exemption from corporate income tax and of the Minimum Perception during the first fifteen (15) fiscal years from the fiscal year during which the effective operation
  • EPZ firms are exempt from customs duty and any import
  • Exports of goods and services are subject to VAT at the rate of zero percent (0%).
    • For the transactions carried out between EPZ firms and common law companies, EPZ firms are authorized to obtain the refund of the VAT credit resulting from the excess of deductible VAT over the collected The VAT credit granted for reimbursement can be used by the Tax Administration in tax settlement.
  • Measures to lift restrictions on foreign current payments, which are established in the Exchange
• Construction materials and accessories, construction site rolling stock, vehicles intended for the transport of goods, factory equipment, raw materials, semi-finished products, packaging, spare or spare parts, teaching materials, furniture, materials computer and office automation as well as office supplies, intended for the preparation, the development and operation of EPZ firms are exempt from customs and any import
• Importation of equipment good by EPZ firms is exempted from VAT

Special Incentives:

• Companies investing in renewable energy, tourism, industrial, civil work and construction, and transformation: Companies investing in renewable energy, tourism, industrial, civil work and construction, and transformation can benefit from ans income tax reduction equal to the tax calculated on 50% of the amount of investment that they realized during the related tax year.
• Big Investment Mining (Investing more than $50 million):
  • Income tax exepmtions :
    • 25% for operations (contractors and subcontractors)
  • Exports of the holder and the transformation entity are imposed VAT at the rate of zero (0%).
  • Materials, goods and equipment to be imported by the investor are annexed to the investment They are exempt from customand importation duties.
• Petroleum code : Materials, equipment and specific products, directly used in the execution of prospecting, research and exploration of hydrocarbons, benefit the regime of temporary admission with suspension of duties and taxes

Sources: Economic Development Board of Madagascar,