Operating a Business

flag Madagascar Madagascar: 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

Limited Liability Company (SARL)
Number of partners: minimum one shareholder and one director (which may be of any nationality), maximum 100. It must have a resident representative.
Capital (max/min): No minimum capital required.
Shareholders and liability: liability is limited to the shares
Limited Company (SA)
Number of partners: minimum one shareholder and one director, which may be of any nationality. It must have a resident representative.
Capital (max/min): MGA 10 million (MGA 2 million in case of a singe shareholder)
Shareholders and liability: liability is limited to the extent of the shareholders contributions
Single Member Limited Company
(SA Unipersonnelle)
Number of partners: one natural person
Capital (max/min): No minimum capital required.
Shareholders and liability: liability is unlimited
The Competent Organisation
The creation of a company in Madagascar benefits of a unique office, the Guichet Unique, a service offered by the Economic Development Board of Madagascar (EDBM).
Company Directories
Companies' Register
 
Setting Up a Company Madagascar Sub-Saharan Africa
Procedures (number) 5.0 7.5
Time (days) 8.0 21.3

Source: Doing Business.

 
Business Setup Procedures
Consult Doing Business Website, to know about procedures to start a Business in Madagascar.

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The Active Population in Figures

201820192020
Labour Force 13,408,23913,818,21213,850,442

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 87.38%87.26%87.15%
Men activity rate 90.01%89.81%89.61%
Women activity rate 84.79%84.75%84.72%

Source: International Labour Organization, ILOSTAT database

 
For Further Statistics
World Bank
For Further Information About the Labour Market
NationMaster

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Working Conditions

Legal Weekly Duration
The legal employment’s duration is forty hours per week.
A rest day per week is mandatory (generally on Sunday), and it has to consist of at least 24 consecutive hours (art. 80 of the Labour Code).
Retirement Age
Age 60 (55 for merchant seamen) with at least 15 years of coverage, including at least 28 quarters of contributions in the last 10 calendar years.
For partial pension, the legal age is 60 (55 for merchant seamen) with at least 60 quarters of contributions if the insured has less than 28 quarters of contributions in the last 10 calendar years.
The insured may continue to work up to five years after the legal retirement age to meet the contribution requirements.
Working Contracts
According to art. 7 of the Labour Code, working contracts must be in written and include the tasks, the professional category, the salary and the date of start of the contract. In case the contract is not in written, the working relationship can be proved by any means.
Working contracts are exempted from stamp duties.
Labour Laws
Consult the Labour Code, to obtain a summary of the labour regulations that apply in Madagascar

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Cost of Labour

Minimum Wage
The minimum wage was MGA 200,000 per month in 2019 (ILO, latest data available).
However, the vast majority of the population is active in the informal sector, so does not necessarily benefit from the legal minimum salary.
Average Wage
Salaries in Madagascar differ drastically between different jobs. Visit VotreSalaire.org to consult the average wages for the type of profession (in French).
Social Contributions
Social Security Contributions Paid By Employers:

18% of monthly salary of which:

  • 13% for the National Pension Fund (capped to a monthly maximum of 13% of eight times the legal minimum salary)
  • 5% for the statutory health organization

Social Security Contributions Paid By Employees: 2% of the monthly salary of which:

  • 1% to the National Pension Fund
  • 1% to the statutory health organization

Both capped at a monthly maximum of 1% of eight times the legal minimum wage.

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Social Partners

Social Dialogue and Involvement of Social Partners
The law in Madagascar allows public and private sector workers to establish and join labour unions of their choice, without prior authorization or particular requirements (nevertheless, essential workers, including police, military, and firefighters, may not form unions; and civil servants have a different labour code). Formally, unions operate independently from government and political parties.
Workers in the private sector have the right to bargain collectively. However, more than 80% of workers are engaged in agriculture, fishing, and forestry at a subsistence level, and therefore have no access to unions.
In general, collective bargaining rights are more readily exercised and respected in larger international firms, whereas in smaller local companies employees tend to be more reluctant to make demands for fear of reprisals.
Unions
Christian Confederation of Malagasy Trade Unions (SEKRIMA - Confédération chrétienne des syndicats malgaches)
United Autonomous Unions of Madagascar (USAM - Union des Syndicats Autonomes de Madagascar)
Confederation of Malagasy Workers (FMM - Fivondronamben'ny Mpiasa Malagasy)
Unionisation Rate
Less than 10%, although no official figures are available.
Labour Regulation Bodies
Ministry of Public Function and Labour (Ministère de la Fonction Publique, de la Réforme de l'Administration, du Travail et des Lois Sociales)

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Latest Update: April 2022