Employer of Record in Madagascar: A Comprehensive Guide for 2026

Introduction

Employment in Madagascar is governed by the Labour Code, Law No. 2024-014, which took effect in August 2024 and applies to any contract performed in the country regardless of the nationality of either party.

Hiring through an Employer of Record in Madagascar means employing under that Code, with a written contract required at the point of hiring and the employer withholding Impôt sur les Revenus Salariaux et Assimilés (IRSA) alongside contributions to the Caisse Nationale de Prévoyance Sociale (CNaPS) and an occupational health service, all remitted monthly.

The obstacle for a foreign company is reaching the point of employing at all. Direct hiring requires registering with the tax administration, the statistics office, the commercial registry, and CNaPS before anyone starts, and online registration is currently unavailable. Foreign hires then need a contract visa and a work permit, each of which requires a local employer to sponsor them.

This is the gap an EOR closes. It holds the Madagascar entity already, so hiring can begin without building the local structure first. This guide covers contract types, statutory leave, contractor classification, termination and severance, work permits, payroll and tax, and incorporation.

Madagascar at a glance

Population: 33.59 million

Currency: Malagasy Ariary (MGA)

Capital: Antananarivo

Languages: Malagasy and French.

GDP: 19.62 billion

How does employment regulation work in Madagascar?

Employment in Madagascar is governed by the Labour Code, Law No. 2024-014, promulgated on 14 August 2024. It replaced the previous Code of 2004, adding provisions on teleworking, workplace harassment, migrant workers, and paternity leave that the earlier law did not contain.

The Code applies to any employer and any worker whose contract is performed in Madagascar, whatever the form of the contract or the nationality of either party.

What are the types of employment contracts in Madagascar?

Madagascar recognises indefinite and fixed-term contracts. Every hire must be recorded in writing at the point of engagement, stating at minimum the role, professional category, classification index, salary, and start date.

The contract is drafted in Malagasy and/or French as the parties prefer, in two copies, one given to the worker immediately after signature. The Ministry of Labour publishes model contracts for each contract type, and either party may submit a contract to the Labour Inspector for a compliance check.

Indefinite contracts run until either party terminates with notice.

Fixed-term contracts must be in writing and are restricted to work outside the establishment's normal and permanent activities, defined projects, temporary surges in workload, or urgent safety work. Three limits matter:

• Duration runs from 01 month to 02 years
• A contract may be renewed twice, with the total including renewals capped at 06 years
• It converts automatically to an indefinite contract after two successive renewals, and re-hiring the same worker to the same post after a break of three months or less counts as a renewal

A fixed-term contract that fails these conditions is treated as indefinite.

Two arrangements new to the 2024 Code matter for foreign employers. Teleworking is now regulated, agreed either in the contract or by amendment, with the parties setting equipment provision, working time controls, and contact hours.

Portage salarial is formally recognised: a three-party arrangement where a portage company employs the worker and places them with a client company, with the portage company remaining the legal employer.

What are the employment entitlements in Madagascar?

In Madagascar, every hire has to be recorded in writing at engagement, and an unwritten relationship that is later proven is treated as an indefinite contract by default. The entitlements that follow weigh more than the contract itself: annual leave, split-funded maternity leave, paid nursing breaks, and family leave that all accrue and track from day one.

Skuad's Manage platform helps you keep the contract in one place, supporting employment contract generation across 160+ countries aligned with local labor laws and statutory requirements.

Leave tracking, contract amendments, renewals, and probation records stay with employee documentation, and onboarding workflows help get the required elements in before day one.

What are the paid public holidays in Madagascar?

Madagascar observes 12 national public holidays in 2026. Public holidays and bridge days are non-working and paid, and holidays cannot be counted within paid annual leave. Two holidays fall on a Sunday in 2026, and Islamic dates depend on moon sightings.

What is the difference between contractors and full-time employees in Madagascar?

A worker or full-time employee is someone who places their professional activity under the direction and authority of another person, in exchange for remuneration. A contractor supplies a service under a commercial agreement and keeps control over how the work is done.

Contractors suit defined project scopes, specialist input, and short engagements. Employment is the right structure for ongoing roles you direct day-to-day, and the synthetic tax advantage sits with the contractor rather than with you.

Madagascar's test is broader than most. The Code treats piece-rate and task-paid workers as workers without requiring proof of a legal subordination link, and regardless of who owns the premises, materials, or tools.

If a contractor works under your direction, on your schedule, and integrated into your operation, the relationship can be treated as employment, whatever the agreement says. Absent a written contract, the existence of a work relationship may be proved by any means, and any proven relationship without a written contract is deemed to be an indefinite-term contract.

The consequences attach retroactively: unpaid CNaPS contributions and IRSA, accrued leave, and on exit the full termination procedure. A dismissal found abusive gives rise to damages assessed by the competent court, and the party that ended the contract must prove the termination was legitimate.

Routing work through a subcontractor does not transfer the liability. Where a subcontractor is not registered in the commercial or trades register and becomes insolvent, the principal substitutes for them in settling workers' entitlements and social charges, and the affected workers have direct action against the principal before the Labour Court.

The synthetic tax rate makes contracting cheaper on the worker's side, which is often what pulls the arrangement that way. If the relationship is later read as employment, the cost lands on you retroactively.

Skuad supports both hiring models from a single platform:

EOR for full-time employees

• Acts as the legal employer across 160+ countries, so you can hire without setting up a local entity
• Supports employment contract generation aligned with local labor laws across supported markets
• Facilitates statutory contribution workflows covering applicable social security and pension obligations
• Supports payroll processing in 70+ currencies with tax withholding and statutory deductions
• Helps administer statutory benefits, paid leave, and parental entitlements in line with local requirements
• Assists with termination and offboarding, including notice periods and severance calculations as required locally

Contractor management

• Helps onboard contractors with locally compliant agreements that reduce misclassification exposure
• Supports invoice generation, approval workflows, and payment processing
• Helps flag classification risk early with built-in worker classification checks
• Facilitates multi-currency payouts across 70+ currencies
• Helps maintain contractor records, agreements, and payment history alongside full-time employees in one dashboard

Full-time or contractor, Skuad supports both. Compare pricing for your Madagascar hires.

What are the key things to know about hiring in Madagascar?

According to the laws in Madagascar, the employer must issue a written record at the point of hiring, stating at minimum the role, professional category, classification index, salary, and start date.

The contract is drafted in Malagasy and/or French as the parties prefer, in two copies, with one given to the worker immediately after signature. Monetary values should be in Malagasy Ariary, since salary must be paid in full in Madagascar in legal tender.

The Ministry of Labour publishes model contracts for each contract type, and either party may submit a contract to the Labour Inspector for a compliance check before or after signing.

• PortalJob Madagascar
• Offre Emploi Madagascar
• Option Carrière Madagascar
• LinkedIn

A female candidate is not required to declare that she is pregnant, except for work legally prohibited to pregnant women or carrying a recognised risk. Asking as a matter of routine creates exposure.

Every worker must be affiliated to an approved occupational health service within 15 days of starting. Hiring a foreign national additionally requires a pre-employment medical examination arranged by the employer, covered in the work permit section.

Candidate CVs, ID copies, and reference checks are personal data in Madagascar, with health and other sensitive categories carrying stricter conditions, and a routine question about pregnancy creates exposure on its own.

Skuad supports background checks as part of the hiring workflow, covering identity verification, employment history, criminal records, and education credentials, so you have a clearer picture of who you are onboarding before contracts are signed.

What are the probation and termination rules in Madagascar?

Madagascar's 2024 Labour Code sets a defined probation ceiling and a structured dismissal regime. Termination needs a legitimate reason, written notice, and, for economic exits, severance on a fixed formula.

What is the probation period in Madagascar?

A trial period must be agreed in writing and state its duration. It cannot exceed 06 months, including any renewal, and the maximum for each professional category is fixed by decree; thus, a senior role and an unskilled one have different limits.

During the trial, either party may end the relationship without notice or compensation, except that pregnancy cannot ground a trial-period termination. Once the worker is confirmed, service counts from the start of the trial, so the probationary months feed into seniority for leave and severance.

How does termination of employment work in Madagascar?

An indefinite contract ends by resignation, dismissal, or retirement. A dismissal requires a legitimate reason connected to the worker's capacity or conduct, or to the operational needs of the business. A termination without a legitimate reason is abusive and exposes the employer to damages.

Two categories of workers carry extra protection. A pregnant employee cannot be dismissed except for a legitimate reason unrelated to the pregnancy, and dismissing a staff representative requires prior authorisation from the Labour Inspector.

Termination requires written notice stating the reason. The notice period is set by decree according to professional category and length of service and cannot be waived in advance, running from 8 days for the shortest-serving up to several months for senior staff. During the notice period, the worker is entitled to paid time off to look for new work.

What does dismissal cost?

Economic dismissals carry an extra process. The employer must justify the economic grounds, consult staff representatives, and notify the Labour Inspectorate before proceeding, with an order of selection that weighs skills, seniority, and family responsibilities.

What happens if the dismissal is challenged?

Where a worker disputes the dismissal, the party that ended the contract must prove the termination was legitimate. The employer bears the burden of proof, making written notice that clearly states the reason essential.

A dismissal found to be abusive gives rise to damages assessed by the court, in addition to any notice and severance owed. On exit, the employer owes a final settlement of all sums due and a certificate of employment stating the dates and roles held.

Every route out in Madagascar runs back to one thing: if it is challenged, you are the one proving the exit was legitimate, and the documentation you kept along the way is what decides it. Skuad helps with employment risk and compliance monitoring through the Shield platform, so your team has support tracking procedural requirements.

Here is what Skuad helps with:

• Termination and offboarding support aligned with local labor requirements across supported markets
• Notice period and severance calculation support based on applicable local rules
• Documentation support across the exit process, including written notice and evaluation records
• Ongoing monitoring of regulatory changes across supported markets
• Worker classification checks that help surface misclassification exposure before it escalates

Why use an EOR in Madagascar for hiring?

An Employer of Record already holds a Madagascar entity and employs your hire on your behalf. You direct the work; the EOR carries the legal employer obligations.

Registration itself is quick on paper, with a nominal timeline for business registration within 3 to 5 days through the Economic Development Board of Madagascar. The challenge comes from the surrounding requirements: online business registration is not currently operational, the process runs in French, and the ongoing compliance load lands monthly.

What are the benefits of hiring through an EOR in Madagascar?

• No entity and no multi-agency setup. Direct hiring means registering across the Tax Administration, the National Statistics Agency (INSTAT), and the Ministry of Justice at minimum, then CNaPS and an occupational health service, but an EOR removes the lot.
• Payroll, IRSA, and social contributions handled at source. CNaPS contributions are mandatory and shared between employer and employee, and workers must be affiliated to an occupational health service within 15 days of starting. An EOR absorbs the monthly filing cycle.
• Compliant contracts from day one. A written contract is required at hiring, and an unwritten but proven relationship is deemed an indefinite contract. An EOR issues contracts that already meet the statutory floor.
• Work permit sponsorship through an existing entity. Foreign hires need a contract visa plus a work permit, both requiring a local employer. An EOR sponsors through its own entity.
• Termination risk carried by the EOR. A dismissal found abusive exposes the employer to court-set damages, with the burden of proving legitimacy on the party that ended the contract. An EOR holds that exposure.

An EOR fits early-stage hiring and small teams. Building your own entity is worth the overhead once you are hiring at scale, need to hold assets, or bill Malagasy customers directly.

Skuad acts as the legal employer across 160+ countries, so your company can hire, onboard, and pay employees without entity setup.

Here is what Skuad helps with:

• Employment contract generation across 160+ countries, aligned with local labor laws and statutory requirements
• Statutory contribution workflows across supported markets, covering applicable social security and pension obligations
• Payroll processing in 70+ currencies with tax withholding and statutory deductions
• Work permit and visa support for foreign nationals joining your team
• Termination and offboarding support aligned with local labor requirements across supported markets
• Background verification covering identity, employment history, and criminal records before onboarding

What are the types of visas in Madagascar?

Madagascar issues two categories of visa: non-immigrant and immigrant. The distinction decides whether someone can work.

A non-immigrant visa covers short stays of up to 90 days for tourism or business travel. It cannot be transformed into an immigrant visa and does not allow its holder to work in Madagascar, so it suits meetings and site visits but not employment.

An immigrant visa is the route for anyone staying more than 90 days for investment, business, work, study, or similar purposes. It cannot be issued at the airport and must be arranged in advance.

For an employee, the immigrant route runs in two steps:

1. Apply at a Malagasy embassy for a one-month visa, extendable and transformable to a long-term visa, known as the transformable visa.
2. After arrival, the holder applies for a long-term visa and a resident card at the Immigration and Emigration Service, presenting the original documents shown at the embassy.

All applicants need a passport valid for at least 6 months with 2 to 3 blank pages. A visa alone does not authorise work: the transformable visa is paired with a work permit, covered in the next section.

What is the work permit process in Madagascar?

A foreign national needs two things to work in Madagascar: a visa that permits entry for employment, and authorisation to perform the work itself.

The Labour Code requires that a foreign worker's employment contract carries a visa from the Labour Inspectorate, and that the worker holds a work permit issued by the Minister in charge of labour stating their identity, professional category, the permit's validity, and the workplace.

The employer is responsible for this obligation, and a local employer is required, which is why hiring foreign nationals without an entity means using an EOR.

What are the steps to get a work permit in Madagascar?

1. The employer secures the contract visa from the Labour Inspectorate, which reviews the employment contract for compliance with the Labour Code before the worker starts.
2. The worker applies at a Malagasy embassy for the one-month visa, extendable and transformable to a long-term visa.
3. After arrival, the worker applies for a long-term visa and a resident card at the Immigration and Emigration Service, presenting the original documents.
4. The Minister in charge of labour issues the work permit, tied to the specific employer, role, and workplace named on it.

A migrant worker must pass a medical examination before starting work, arranged by the employer, so build that into the schedule. The permit is workplace-specific, meaning a change of employer or location requires a fresh application rather than a transfer.

Four sequential steps- a pre-employment medical and a permit locked to one employer and one workplace add real lead time to a foreign hire, and every step of it needs a local employer to sponsor.

Skuad's global immigration platform helps support work permit and visa applications for foreign nationals joining your team, so your HR team has support across the process. Here is what Skuad helps with:

• Helping coordinate visa documentation with relevant local immigration authorities
• Assisting with residence or work permit conversions as required by local immigration law
• Helping track documentation requirements and deadlines across the full permit lifecycle
• Helping keep your team aligned with requirements as permits come up for renewal

How do payroll and taxes work in Madagascar?

Madagascar runs payroll withholding at source. The employer withholds IRSA and remits it with social contributions, and the law holds the employer accountable for calculating, declaring, and paying the lot, including the employee's own share. Declarations and payments run monthly, due by the 15th of the following month.

Before running payroll, an employer registers for a tax identification number, then with CNaPS and an approved health organisation once the first employee starts.

What are the income tax rates in Madagascar?

IRSA is charged on total taxable remuneration including salary, allowances, and benefits in kind. The scale runs progressively, and the 2026 Finance Act added a sixth band.

Whatever the calculation produces, the minimum salary income tax payable is MGA 3,000 per month. The 25% band was added by the 2026 Finance Act and applies only to the portion of monthly income above MGA 4,000,000, so it mainly affects senior managers, executives, and higher-paid offshore roles.

What social security contributions do employers pay in Madagascar?

Employer contributions total 19% of gross salary on top of pay, against the employee's 2%. All three are capped at eight times the legal minimum salary per employee, so contributions on high earners stop rising above that ceiling.

The employee's 2% is deducted from salary, and the employee's CNaPS share reduces their IRSA taxable base. Budgeting a hire here means more than reading the headline salary. Skuad helps you model total employment cost across supported markets using the employee cost calculator.

Estimate your total cost of hiring in Madagascar.

What other taxes apply to employers in Madagascar?

Neither corporate tax nor VAT arises when hiring through an EOR, since the EOR's entity carries them.

How to set up a subsidiary in Madagascar?

Most subsidiaries take the form of a SARL (Société à Responsabilité Limitée), the limited liability company, or an SA (Société Anonyme) for larger ventures.

Madagascar has its own national company-law framework. A single shareholder can establish a Société à responsabilité limitée unipersonnelle (SARLU), or single-member limited liability company, while a foreign parent may register a branch.

Registration runs through the Economic Development Board of Madagascar (EDBM), the one-stop shop and technical body for company registration, which coordinates the tax, statistics, and registry steps in one place.

What are the steps to incorporate a subsidiary in Madagascar?

1. Reserve the company name and draft the statutes. The bylaws must comply with Madagascar’s company law and cover the corporate purpose, management structure, and share capital.
2. Deposit the share capital in a Malagasy bank account opened in the company's name.
3. File at the EDBM. The process begins at the front office to apply for a tax identification number (NIF) and verification of the documents, then runs through the one-stop shop.
4. Collect the registration numbers. The EDBM issues the NIF, the INSTAT statistics number, and the RCS number (Registre du Commerce et des Sociétés) from the Trade and Companies Registry, which together give the company legal personality.
5. Register for social security and health cover. Registration with CNaPS is required, along with a health organisation, where Organisation Sanitaire Inter-Entreprises Tananarivienne (OSTIE) registration is free of charge.
6. Notify the Labour Inspectorate. New companies must submit a declaration of start of activities to the Labour Inspectorate.

Registration through the EDBM is quick once the file is complete, but the entity still needs statutes that comply with Madagascar’s company law, share capital deposited in a local bank account, CNaPS and health cover registration, and a start-of-activities declaration to the Labour Inspectorate.

For teams that want to hire in Madagascar without that commitment, Skuad acts as the legal employer, so you can onboard employees without incorporating a local entity first.

What is a Professional Employer Organization (PEO) in Madagascar?

A PEO acts as a co-employer, managing payroll, benefits, and tax compliance while the employment contract stays between you and the employee. An EOR hires the worker through its own Madagascar entity and becomes the legal employer instead of your company.

Madagascar also recognises a local version of the EOR model, portage salarial, where a portage company is the legal employer and places the worker with a client.

What is the difference between a PEO and an EOR in Madagascar?

A PEO only works if you already have a Madagascar entity, since your company stays the legal employer. That means you are responsible for registrations with the EDBM, tax authority, statistics office, commercial registry, and CNaPS, as well as all employer contributions.

Dismissal exposure stays with you too: an abusive dismissal gives rise to court-set damages, with the burden of proving the termination legitimate on the employer.

For most companies hiring their first employees in Madagascar, an EOR is the better fit. It removes the entity requirement and carries the employer liability rather than leaving it with you.

Employer of Record in Madagascar: hire without an entity

Madagascar rewrote its Labour Code in 2024, and that puts the risk on the employer. Hire without a written contract and the law treats the relationship as permanent. Engage a contractor who works under your direction, and a court can reclassify it as employment, with back pay, unpaid contributions, and accrued leave owed from day one.

Dismiss anyone, and you have to prove the exit was legitimate, or pay court-set damages. Building your own entity does not reduce that exposure, since your company remains the legal employer. Shifting it requires a different legal employer.

An Employer of Record in Madagascar takes that role, so the contract, the monthly filings, and the burden of proof at exit run through its entity.

Skuad acts as the legal employer across 160+ countries, helping you issue compliant contracts, process payroll in 70+ currencies with the right deductions applied, support work permits, and document exits properly.

Book a demo to see how Skuad supports your first Madagascar hire.

FAQs

1. What is an Employer of Record in Madagascar?

An employer of record in Madagascar is a provider that holds a local entity and acts as the legal employer under the 2024 Labour Code, Law No. 2024-014. It issues the written contract, withholds IRSA, files CNaPS and occupational health contributions monthly, and carries the compliance obligations.

2. How much does an Employer of Record in Madagascar cost?

Pricing typically has two parts: a provider fee per employee per month, and statutory employer on-costs fixed by law. In Madagascar, those on-costs run to roughly 19% of gross salary across CNaPS, health cover, and the training fund, so ask for a combined per-hire estimate.

3. Can a foreign company hire in Madagascar without a local entity?

Foreign companies can generally hire through an EOR without registering, since the provider holds the entity. Direct hiring requires setting up with the tax authority, statistics office, commercial registry, and CNaPS before anyone starts, and online registration is not currently operational, which adds real delay.

4. What happens if a contractor is reclassified as an employee in Madagascar?

Reclassification generally attaches retroactively, pulling in unpaid CNaPS contributions, IRSA, and accrued leave. Madagascar's test is unusually broad: a proven work relationship without a written contract is deemed indefinite by default, and routing work through an unregistered subcontractor can push their liability back onto you.

5. What is the difference between an EOR and a PEO in Madagascar?

A PEO usually administers payroll while your company stays the legal employer, so you need a Madagascar entity first. An EOR generally employs the person through its own entity. Madagascar also recognises portage salarial, a local arrangement where a portage company holds the employment relationship.

6. How long does it take to onboard an employee in Madagascar through an EOR?

Onboarding a local hire typically takes around two weeks, covering contract drafting, CNaPS registration, and occupational health affiliation within 15 days of starting. Foreign nationals usually take longer, since the contract visa, work permit, and a pre-employment medical each have to be arranged in sequence.