WHAT ARE THE LEGAL CONDITIONS FOR FOREIGNERS ACQUIRING PROPERTY?

Foreigners looking to acquire property in Madagascar have two primary legal pathways to consider, each with distinct requirements and implications:

1. Establishing a Company: Foreigners can form a company in Madagascar, typically as a "Société à Responsabilité Limitée" (SARL), which is akin to a limited liability company. This requires registration with the Madagascar commercial office and mandates at least one Malagasy partner holding more than 50% of the shares. This structure allows the company to own land directly and is a common method for foreigners to engage in business and real estate ventures within the country.
2. Long-Term Lease Agreements (Emphyteutic Lease): This is a simpler and more prevalent approach where foreigners enter into long-term lease agreements, ranging from 30 to 99 years, with the option for extension. Such leases can be arranged directly with the landowner, or through the transfer or subleasing from existing lessees. All emphyteutic leases must be registered at the Madagascar land registry office to be legally binding and effective.

Fees and Taxes: In both cases, foreigners are responsible for all associated notarial, legal, and registration fees, as well as any taxes and other charges that arise from the transaction. These costs can vary based on the complexity of the transaction and the value of the property involved.

Strategic Considerations: Each method comes with strategic considerations. Forming a company offers more control and potentially broader business opportunities but requires dealing with corporate governance and finding a reliable local partner. Leasing is straightforward and may be less costly upfront but doesn't provide property ownership, only rights to use.

Legal and Bureaucratic Environment: The legal environment in Madagascar, particularly concerning land ownership and property rights, is complex and can be challenging to navigate without adequate local legal advice. Potential foreign investors and property owners should consult with local experts and legal advisors to fully understand the implications of property acquisition and ensure compliance with all local laws and regulations.

To ensure a smooth, secure property acquisition process and compliance with local regulations, our Nobilis Group team collaborates with experienced lawyers and local notaries. Their expertise allows us to address all questions related to the purchasing process, providing our clients with peace of mind and assurance that all formalities are handled in accordance with applicable regulations.