This information is derived from the State Department's Office of Investment Affairs' Investment Climate Statement. Any questions on the ICS can be directed to EB-ICS-DL@state.gov
Last Published: 11/7/2016

WTO/TRIMS

According to the Ministry of Commerce, the government has not notified the WTO of any measures that are inconsistent with the requirements of the WTO’s Trade Related Investment Measures (TRIMs) obligations.

Investment Incentives

Madagascar extends certain incentives for investment, outlined in domestic legislation and regulations, particularly under the Free Zone Company regime and in the mining sector under the Law for Large Scale Mining Investments. See above under "Industrial Promotion" and below under “Free zones” for a description of these investment incentives. Free Zone companies operate under relaxed labor regulations, particularly regarding overtime provisions, and some allege that this results in abuses (also see Section 15 – Labor).

Research and Development

U.S. and other foreign firms are eligible to participate in government-financed and/or subsidized research and development programs according to Malagasy law. Despite the relative paucity of such programs, U.S. entities have participated in projects in the health, education, and agricultural sectors.

Performance Requirements

The Malagasy government does not, in general, mandate local employment. However, the government does require that priority for hiring be given to Malagasy workers with similar skills and qualifications in the mining sector, under the provisions of the Law on Large Scale Mining Investments. In all other sectors, the Investment Law provides that companies are free to hire or fire specialized expatriate employees as it sees fit for the good operation of its business.

There is no requirement restricting the mobility of foreign investors. The regime for visas, residence, and work permits is neither discriminatory nor excessively onerous.

There are no government-imposed conditions on permission to invest, and Madagascar's tariffs adhere to WTO guidelines. There are no requirements in place regarding the use of local content in goods or technology.

The only performance requirements in place are those that mandate foreign investors have a company representative resident in Madagascar within three months of company creation, and that authorization for access to land is contingent upon commencement of the business activity within six months of receiving the lease title. Additionally, in order to maintain eligibility for the Free Zone regime, companies must continue to meet the requirement to export 95 percent of their output.

Data Storage

Regulation of the local IT sector is embryonic, and there are no requirements for foreign IT providers to turn over source code and/or provide access to surveillance (backdoors into hardware and software or turn over keys for encryption).

There are no current mechanisms to enforce any rules on maintaining a certain amount of data storage within the country. The IT Industry Association (GOTICOM) is actively working with the relevant authorities on updating the legislative and regulatory framework governing the sector.

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