Local payroll and social security compliance in Madagascar

Madagascar employs within a French-speaking legal culture but with its own currency, the ariary, whose value moves. A foreign company budgeting Malagasy remuneration therefore works in local currency and carries the exchange risk, unlike in a franc-zone country.

Malagasy is the official language; French remains the language of business and of the economic administration. Contracts are most often drafted in French, sometimes bilingually, and the question of which version binds the employee is best settled at drafting stage rather than in front of a court.

Social protection rests with the Caisse Nationale de Prévoyance Sociale (CNaPS, the national social welfare fund). It is not a CNSS, and the confusion with other French-speaking African countries regularly leads employers to ask for documents that do not exist. Occupational medicine is provided by inter-company health bodies which the employer joins separately. As for the accounting profession, the Ordre des Experts-Comptables et Financiers de Madagascar (OECFM, the institute of chartered accountants) protects the title and reserves statutory audit, but payroll preparation is not a closed activity: unregistered management firms handle it routinely.

Registration with CNaPS and membership of an inter-company medical service go together. Omitting the second becomes apparent at the first inspection, and each employee is then declared individually and receives an insured person's number.

Whether the company exists in the eyes of the administration turns on three documents: the extract from the trade and companies register, the statistical card and the tax card, all issued by the one-stop shop of the Economic Development Board of Madagascar. Without them the company barely exists, and they are the precondition for employing in your own name.

The occupational grade and the applicable collective agreement, set out in the written contract, then drive the payslip calculation. Check the language chosen, the particulars the payslip must show, and the treatment of overtime, which is frequently mishandled when payroll is run from abroad.

Wage and assimilated income tax is withheld by the employer and paid to the Direction Générale des Impôts on its own calendar, while contributions follow the fund's. Ask how often social returns fall due before fixing your closing timetable, and confirm who keeps the personnel records on site, since the inspectorate expects to find them locally.

Termination, finally, calls for advance analysis: grounds, procedure, notice, severance and any involvement of the labour inspectorate.

The statistical card and the tax card are renewed annually, whereas the register extract follows a different rhythm. A company can therefore hold a valid extract alongside two expired cards, a situation that immediately blocks day-to-day formalities and surprises head offices that only checked the register.

The export processing regime, widely used in textiles and in exported services, brings rules of its own, notably on working time and on the agreements that apply. It cannot be inferred from the corporate form and has to be verified case by case, on the licence itself.

Access to information, finally, remains awkward. Malagasy official portals are difficult to consult from abroad and several certificate titles cannot be checked online: direct contact with the relevant administration is the safest method here, and often the fastest.