How to Register a Sole Proprietorship (Entreprise Individuelle) in Madagascar

In Madagascar, establishing yourself as an independent contractor or sole proprietor offers a practical and flexible way to operate a business without forming a company. The process is generally straightforward, though it involves navigating several administrative steps across tax, statistical, and local authorities.

While some bureaucracy remains, the requirements are less onerous than for incorporated entities. Entrepreneurs should be prepared to manage documentation, register with multiple agencies, and comply with ongoing tax and social obligations.

Despite these challenges, operating as a sole proprietor provides notable advantages, including full control over business decisions, low setup and maintenance costs, and the ability to scale gradually as opportunities grow.

Disclaimer: This article is for informational purposes only and is not a substitute for legal advice. Please always check official sources or seek professional guidance before taking action.

What is a sole proprietorship in Madagascar?

In Madagascar, a sole proprietorship is officially called an entreprise individuelle. In everyday language, it may also be referred to as:

• sole trader
• self-employed worker
• independent contractor

These terms all describe the same business model: one person legally running a business without forming a separate legal entity.

How does a Sole Proprietorship (Entreprise Individuelle) work in Madagascar?

Entreprise individuelle vs. other business structures in Madagascar

There are alternative business structures in Madagascar (such as a limited liability company — SARL or partnerships). Below is a comparative overview of these structures to help you decide which is more appropriate for your circumstances.

Step-by-step guide: How to register a sole proprietorship in Madagascar

Step 1: Check your eligibility

Citizens of Madagascar must be legal adults and hold a valid national identity card to register as sole proprietors. Residents with legal status can also register, provided they present official identification such as a national ID or passport. Foreign nationals are likewise eligible, but may need to obtain additional permits such as a residency permit or the Carte d’Identité Professionnelle des Étrangers Non-Salariés (CIPENS), which is a professional identity card required for self-employed foreign nationals. Non-residents are generally taxed only on income earned within Madagascar.

Step 2: Choose your business name

You can operate under your legal name or a chosen trade name. To avoid name conflicts, verify that no one else is already registered under your intended trade name. Use the Registre National du Commerce et des Sociétés de Madagascar (RNCS-CM) to check existing business names on the commercial registry.

Step 3: Gather required documents

You’ll need to prepare:

• Valid identification (ID card or passport)
• Proof of residence or a local address certificate
• Documentation of your business address (e.g., utility bills)
• The statistical registration form via INSTAT (form A1)
• For foreign nationals, the CIPENS from the Ministry of Industry, Trade, and Handicrafts
• A local “plan de situation” or location plan approved at the level of the Fokontany (local administrative unit)

Step 4: Register with the authorities

In Madagascar, registration for sole proprietorships (entreprises individuelles) is completed in person at the Economic Development Board of Madagascar (EDBM) in Antaninarenina, Antananarivo. Applicants must submit the required documents, pay registration fees, and complete formalities with the tax authority (DGI), statistics office (INSTAT), and commercial registry (RCS) through the EDBM’s one-stop service. During this process, each business is assigned a Numéro d’Identification Fiscale (NIF)—a tax identification number issued by the DGI that must be maintained and used on all invoices, tax filings, and business correspondence. Company registrations (such as SARL and SA) can be processed both in person and online through the government’s Orinasa platform, where users can fill out forms, upload documents, and generate certain legal papers online before final validation at the EDBM.

Step 5: Pay registration and deposit fees

You must pay the administrative fees associated with registering your activity. Although there is no formal minimum capital, there are commonly set registration or deposit fees (e.g., small fixed sums for administrative processing). Budget also for advisory or notary services if you use them. These costs depend on locality and business sector.

Step 6: Fulfill post-registration obligations

Once your entreprise individuelle is active, you must issue invoices that comply with Malagasy legal requirements, maintain proper accounting records, submit annual tax returns on time, remit social contributions if relevant, and notify authorities of any changes (address, business activity, cessation). Adherence to these obligations helps keep your enterprise in good standing with authorities.

Financial and tax obligations for sole proprietors in Madagascar

You're responsible for:

• Corporate / business income tax: In Madagascar, entrepreneurs may be taxed under a “synthetic tax” regime if turnover is below a threshold MGA 400 million. This is calculated as 5% of 70 % of turnover, subject to minimum tax floors between MGA 16,000 and MGA 150,000. If your turnover exceeds the threshold, you fall under the standard corporate income tax regime, which levies 20 % on net profit. Returns are filed annually, and provisional installments may be required during the year.
• VAT (TVA): The standard rate is 20% in Madagascar. Exports of goods and services are zero-rated (0%). Some goods may be taxed at a reduced rate (e.g., 10%), depending on the category and applicable laws. Businesses whose annual turnover is ≥ MGA 400 million must register for VAT (assujettissement). VAT returns are generally filed monthly, and businesses may deduct input VAT on eligible purchases (i.e., their taxable costs).
• Social security contributions: As a sole proprietor, especially if you hire staff, you must engage with Caisse nationale de prévoyance sociale (CNaPS) for pension, workplace risk, and health contributions.
• Record-keeping: Maintain accurate records of invoices, receipts, bank statements, expense documentation, ledgers, and any inventory if relevant. These must sufficiently support your revenue and expenses in case of an audit. Malagasy authorities may request access to records going back up to three years.
• Invoicing: Each invoice must include your NIF, your business name and address, client name and address, invoice number (sequential), date, descriptions of goods or services, unit and total amounts, and the VAT component where applicable. Madagascar is also progressing toward mandatory e-invoicing in 2025 to modernize compliance.

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FAQs

What is the minimum capital required to start an entreprise individuelle in Madagascar?
There is no legally required minimum capital.

Do entreprises individuelles need to register for VAT?
Yes, if your activity is subject to VAT and your turnover exceeds the threshold limits. If you stay under thresholds and deal in exempt categories, you may remain outside VAT registration.

How much are standard social or tax contributions?
As a guideline, low turnover enterprises under the synthetic tax pay 5% of 70% of turnover (if turnover is below MGA 400 million). Higher turnover enterprises are taxed 20% on net profit. Social security contributions include healthcare and a pension. If you hire employees, you must also contribute to Social Security (CNaPS) and health insurance.

Can an entreprise individuelle hire employees?
Yes. If you hire staff, you must register them with CNaPS, withhold tax on salaries (0%–20%), i.e., Impôt sur les Revenus Salariaux et Assimilés (IRSA), and pay employer social contributions.

How long does it take to register as an entreprise individuelle in Madagascar?
Typically, registration takes anywhere from several days to a few weeks, depending on processing at tax, statistical, and local offices.

Can foreign nationals register as an entreprise individuelle in Madagascar?
Yes, foreigners may register, though additional documentation like residency permits or CIPENS may be required.

Do entreprises individuelles need a separate business bank account?
It is not legally mandatory in all cases, but strongly recommended for clarity, audit readiness, and separation of personal and business finances.

What happens if I stop working as an entreprise individuelle?
You must deregister with the tax authorities, file a final tax return, and settle any outstanding taxes or contributions. Then formally notify INSTAT or other relevant offices of business cessation.

Are there government incentives or reduced rates for new enterprises individuelles?
On occasion, localized incentives, reduced registration fees, or tax breaks may be offered in special zones or sectors. Always monitor announcements from the Malagasy government or trade authorities.

Can I use Deel as an entreprise individuelle to get paid by international clients?
Yes. Deel supports sole proprietors (entreprises individuelles) to receive payments globally, offering multi-currency payouts, transparent fees, and compliance support.

Does Deel generate compliant invoices for entreprises individuelles?
Yes. Deel can automatically generate invoices meeting the legal requirements in Madagascar, helping you stay compliant with tax law.

Can Deel help me with taxes as a sole proprietor in Madagascar?
Yes. Deel provides downloadable tax reports, transaction histories, and payment records to facilitate your filings. While Deel is not a substitute for a local accountant, it simplifies bookkeeping and compliance.

Does Deel offer contracts for freelancers and enterprises individuelles?
Yes. Deel offers contract templates adapted to local laws, which help you safely work with clients in Madagascar and elsewhere.

Can I access benefits through Deel as an entreprise individuelle?
Yes. Deel offers optional benefits like health insurance, retirement savings, and other perks to help freelancers obtain protections typically reserved for employees.