Investment Law in Madagascar

The main text governing the area of investments in Madagascar is Law No 2007-036 of 14 January 2008 relating to investments in Madagascar (the « Investment Law« ). This framework law was enacted in order to facilitate and foster investment activities in Madagascar.

The Economic Development Board of Madagascar (or EDBM), an autonomous body acting on behalf of the Malagasy State and previously established by Decree No. 2006-382 of 31 May 2006, was assigned the role of facilitator and promoter of investments in Madagascar. This body has created a « single window » or « guichet unique », in which the various government ministries and authorities responsible for issuing visas, permits, licenses and/or authorizations necessary for the implementation of investments or the incorporation of companies are represented (including formalities such as the registration with the Trade and Companies Registry, the allocation of tax or statistical identifiers, or the issuance of the business visas or entry or residence visas necessary as part of the realization of the relevant investment).

The Investment Law contains, in particular, provisions relating to:

(i) freedom of investment in Madagascar, for any domestic or foreign natural or legal person (subject to the application of specific regulations for certain regulated activities, such as banking activities, insurance activities, or mining and oil activities…),
(ii) the principle of an equal treatment between domestic and foreign investors (which can, for instance, hold up to 100% of the shares in the company through which they exercise their activities – subject, here again, to the application of specific regulations in the case of a regulated activity -),
(iii) the free transfer abroad of certain funds (for instance, dividends, profits after tax, wage income, expatriates benefits and savings),
(iv) the access of foreign investors to real property, provided that the acquisition is realized through a company incorporated under Malagasy law, and subject to obtaining prior authorization from the EDBM and only if the concerned real estate is exclusively and continuously assigned to commercial activities (such as industrial activities, tourism activities or services activities) or an agricultural or fishing activity. The purchase of real estate for speculative purposes is therefore excluded.

In the area of dispute resolution, disputes between domestic investors and the Malagasy State concerning the application and interpretation of the Investment Law are subject to the jurisdiction of Malagasy courts. As to disputes between foreign investors and the Malagasy State, they are subject to a dispute resolution 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. In this regard, Madagascar has entered into such bilateral investment treaties with Belgium and Luxembourg, Germany, Switzerland, Sweden, France, China and South Africa.

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Bilateral Investment Treaties (source : :