Madagascar Company Merger

How to Carry Out a Company Merger in Madagascar

A Legal Guide by Cosmos Legal

Introduction

A company merger in Madagascar is a regulated corporate restructuring process through which two or more companies combine their assets, liabilities, and business operations into a single legal entity. As a jurisdiction influenced by civil law principles but operating outside the OHADA system, Madagascar maintains its own corporate and regulatory framework. The country offers growing investment opportunities, particularly in mining, agriculture, energy, and infrastructure, while requiring careful legal planning for mergers.
Cosmos Legal, an international law firm with extensive experience in Malagasy corporate and investment law, provides comprehensive legal support for company mergers in Madagascar.

Legal Framework Governing Company Mergers in Madagascar

Company mergers in Madagascar are governed by:

• The Commercial Code of Madagascar

• Law No. 2003-036 on Commercial Companies

• Investment and Competition Regulations

• The Economic Development Board of Madagascar (EDBM)

• The Commercial Registry (Registre du Commerce et des Sociétés – RCS)

• The Malagasy Tax Administration

Strict compliance with these laws is essential to ensure the legal validity of a merger.

Types of Company Mergers in Madagascar

Malagasy law recognizes several forms of mergers, including:

1. Merger by Absorption – One company absorbs another, which is dissolved

2. Merger by Consolidation – Two or more companies merge to form a new legal entity

3. Horizontal Mergers – Between companies operating in the same sector

4. Vertical and Conglomerate Mergers

Cosmos Legal advises clients on the most appropriate merger structure based on legal, regulatory, and commercial considerations.

Step-by-Step Company Merger Process in Madagascar

1. Legal and Financial Due Diligence

Before initiating a merger, comprehensive due diligence must be conducted to assess:

• Corporate documentation and ownership structure

• Assets, liabilities, and material contracts

• Employment and social security obligations

• Regulatory licenses and sector-specific permits

• Tax compliance and financial exposure

Cosmos Legal conducts thorough due diligence to identify risks and ensure transaction readiness.

2. Preparation of the Merger Project

A formal Merger Project (Projet de Fusion) must be prepared, outlining:

• Legal form and valuation of the merging companies

• Share exchange ratio or merger consideration

• Transfer of assets and liabilities

• Treatment of employees

• Proposed effective date

This document must comply with Malagasy company law requirements.

3. Management and Shareholder Approval

• The management bodies approve the merger project

• Shareholders approve the merger through extraordinary general meetings

• Resolutions must be duly recorded and notarized

4. Registration and Publication

Once approved:

• The merger is registered with the Commercial Registry (RCS)

• Statutory notices are published in the official legal gazette

• Corporate documents and articles of association are updated

The merger becomes legally effective upon registration.

5. Tax and Regulatory Compliance

Key tax considerations include:

• Corporate income tax implications

• Registration duties and stamp taxes

• Potential tax incentives under investment legislation

Cosmos Legal coordinates tax compliance and liaises with authorities to ensure legal certainty.

Post-Merger Obligations

Following completion, the merged entity must:

• Integrate business operations and corporate governance

• Transfer employees and social security registrations

• Update licenses, permits, and bank mandates

• Notify contractual partners and public authorities

Effective post-merger integration is essential for long-term success.

Why Choose Cosmos Legal?

Cosmos Legal provides:

• Strong expertise in Malagasy corporate and investment law

• Cross-border M&A experience in East and Southern Africa

• Comprehensive legal, regulatory, and tax advisory services

• Practical, investor-focused legal solutions

Clients rely on Cosmos Legal for secure, efficient, and compliant company mergers in Madagascar.

Conclusion

A company merger in Madagascar offers valuable opportunities for growth and market consolidation when properly structured and executed. Given the country-specific legal framework and regulatory requirements, expert legal guidance is essential.
With Cosmos Legal as your trusted legal partner, company mergers in Madagascar can be completed smoothly, transparently, and with full legal certainty.