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Madagascar Business Report
General information
Source: The World Factbook - Central Intelligence Agency
Population
25,683,610 (July 2018 est.)GDP (PPP)
$39.85 billion (2017 est.)Agriculture, including fishing and forestry accountis for more than 25% of GDP and employs roughly 80% of the population. Madagascar produces around 80% of the world’s vanilla and relies on this commodity for most of its foreign exchange.
GDP growth rate
4.2% (2017 est.)Madagascar lost duty-free access to the US market (AGOA) in 2010, erasing most of its thriving textile industry. It regained access in 2015 but ensuing growth has been slow and fragile.
GDP (PPP) per capita
$1,600 (2017 est.)The population is predominantly rural and poor; chronic malnutrition is prevalent, and large families are the norm.
Local currency
Malagasy ariary (MGA)The currency experience a sharp depreciation since 2014, losing roughly 40% of its value.
Financial stability (Public debt)
36% of GDP (2017 est.)Medium. An ongoing IMF program aims to strengthen financial and investment management capacity.
Inflation
8.3% (2017 est.)High.
Language
French (official), Malagasy (official), EnglishThe 2007 Constitution indicated English as one of the official languages of the country, but its status was withdrawn during the 2010 referendum. English remains the major foreign language and it is understood especially in urban areas.
Corruption perception index (Source: Transparency International)
152/180Extremely high level of corruption.
Duties and tax
Source: PwC World Tax Summaries 2017-2018
VAT
20%VAT is applicable to all transactions realised in Madagascar by a VAT vendor. Services are considered to be performed in Madagascar if such services are used in Madagascar or invoiced to a taxpayer established in Madagascar.
Corporate Tax
20%Revenue of foreign businesses providing services to a Madagascar taxpayer that do not have a permanent establishment (PE) in Madagascar is subject to WHT at a rate of 10% of any income realised in Madagascar.
Duties
N/AThe importation of goods is subject to payment of customs and import tax payable to the customs office. In addition, Gasynet fee, corresponding to 0.5% of the cost, insurance, and freight (CIF) value of goods, is applicable on importation of goods.
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