Operating a Business

flag Malawi Malawi: Operating a Business

In this page: Setting Up a Company | The Active Population in Figures | Working Conditions | Cost of Labour | Social Partners


Setting Up a Company

Private limited liability companies
Number of partners: maximum fifty
Capital (max/min): no minimum capital requirement; however, a minimum investment capital of USD 50,000 is a prerequisite for an investment certificate
Shareholders and liability: the liability of its members is limited to the amount of shares respectively held by them
Companies limited by guarantee
Number of partners: maximum fifty
Capital (max/min): No minimum capital requirement
Shareholders and liability: Each member of the company commits to contribute to the firm's assets in case it is dissolved.
The Competent Organisation
The Department of the Registrar General is the competent organisation that handles the incorporation procedure.
Setting Up a Company Malawi Sub-Saharan Africa
Procedures (number) 7.0 7.5
Time (days) 37.0 21.3

Source: Doing Business.

Business Setup Procedures
Consult Doing Business Website to know about procedures to start a business in Malawi.

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The Active Population in Figures

Labour Force 7,798,3298,040,4778,205,369

Source: International Labour Organization, ILOSTAT database

Total activity rate 77.82%77.59%77.31%
Men activity rate 81.82%81.38%80.87%
Women activity rate 74.00%73.97%73.91%

Source: International Labour Organization, ILOSTAT database


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Working Conditions

Legal Weekly Duration
An employee’s normal working hours are set out in the employment contract. An employer may not require or permit any employee to work for more than 48 hours during a week, excluding overtime (with some exceptions, like in the case of guards). For employees, the daily hour limit is 12 hours for 5-day work week and eight hours for a six-day work week. A temporary exemption from normal working hour limits can be granted. In case of overtime, a worker must be compensated with compensatory rest (of at least equivalent hours) and premium pay for overtime hours.
Retirement Age
According to the Pension Act of 2010, the retirement age ranges between 50 (minimum) to 70 (maximum) years, with at least 20 years of service or contribution required.
Working Contracts
According to the Employment act n. 6 of 2000, employment contracts may be oral or in writing, expressed or implied. However, every employer shall give to each employee a written statement of particulars of employment (art. 27).
Working contracts can be for a specified or unspecified period of time, or for a specific task.
Labour Laws
Consult Doing Business Website, to obtain a summary of the labor regulations that apply to local entreprises.

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Cost of Labour

Minimum Wage
The minimum wage per day is MWK 962 (around USD 1.3).
Average Wage
Gross average monthly nominal wage: MWK 27,541 (source: ILO, 2009)
Social Contributions
Social Security Contributions Paid By Employers: Up to 10% for the National Pension Scheme (NPS)
Social Security Contributions Paid By Employees: An employer is allowed to deduct his or her contribution to an approved pension fund (the maximum contribution is 15% of the employee’s salary).

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Social Partners

Social Dialogue and Involvement of Social Partners
The Constitution guarantees the right to freedom of association which includes right to form and join trade unions. The Labour Relations Act 1996 prohibits discrimination on the ground of trade union membership or trade union activities, and a trade union membership (or lack of it) shall not be a condition for gaining or maintaining employment.
A collective agreement is binding upon the parties to the agreement. The terms of the collective agreement must be incorporated into the employment contract of each employee who is covered by such collective agreement.
Labour Unions
Malawi Congress of Trade Unions
Unionisation Rate
The Malawi Congress of Trade Unions (MCTU) is a federation of 20 trade unions and it has approximately 45,000 workers affiliated.
Labour Regulation Bodies
Ministry of Labour

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Latest Update: May 2024