The Free Zones and Companies (“Zones et Entreprises Franches”) regime established in Madagascar is governed by Law No. 2007-037 of 14 January 2008 on Free Zones and Companies in Madagascar.
This regime applies to investments made by domestic or foreign promoters (or a combination of both), in export oriented activities (understood as sales abroad – or to other Free Zones and Companies – of goods or services originating from Madagascar).
Free Companies comprise three categories of companies, namely individual processing companies, service companies, and basic intensive production companies. In turn, Free Zones are materially defined areas within which are grouped several Free Companies.
The certificate of a Free Zone or Company is issued by the Economic Development Board of Madagascar (EDBM, www.edbm.gov.mg), an organization on which you can find more information on our page relating to Investment Law in Madagascar.
This regime, which excludes the application of any other exceptional investment regime in Madagascar, allows Free Zones and Companies to benefit from a preferential treatment in labor, tax or customs matters, among which the following measures (this list is not exhaustive):
1) In Labor matters:
2) In tax matters:
3) In Customs matters:
In the dispute resolution area, the provisions are similar to those provided by Law No. 2007-036 of 14 January 2008 on investments in Madagascar, namely (i) for disputes between domestic investors and the Malagasy State, the jurisdiction of the Malagasy courts (unless the parties agree on an alternative mode of dispute settlement) and (ii) for disputes between foreign investors and the Malagasy State, the application of a procedure arising from the application of either the Washington Convention of 1965 for the settlement of investment disputes between States and Nationals of other States (of which Madagascar is a signatory), or the application of a bilateral investment treaty between Madagascar and the State of origin of the investor, if any. These texts are available on our page relating to Investment Law in Madagascar.
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