Want to do business in Madagascar? You have come to the right place. Here are some of the best business ideas in Madagascar that anyone can take advantage of.
With its expanding economy, young and skilled labor force and affordable salary level, Madagascar is becoming an increasingly interesting business destination for foreign investors.
If you want to do business in Madagascar, but you are not sure where to start – this article is for you.
In this article, we will discuss some the best business ideas in Madagascar right now. We will continue to update this list regularly to keep you up-to-date with the latest and best business opportunities in Madagascar.
Table of Contents
- Real Estate Development
- Real Estate Agency
- Agribusiness
- Tourism
- Import
- Export
- Education
- Online Business
Real Estate Development
According to us, real estate is one of the most interesting long-term business ideas here in Madagascar
What makes real estate such a great business opportunity?
As the economy of Madagascar improves, the middle class is growing larger and wealthier.
The many people now entering the middle and upper classes are looking for both quality and affordable housing, as well as upscale housing. Apartments and villas are in increasingly high demand.
There is a regular real estate boom happening in Madagascar, and this situation may very well continue over the next 30-50 years as the middle class continues to grow and demand better access to housing.
Investors looking to take part in this amazing opportunity can tap into the growing real estate market in several ways.
One of the easiest ways to get started is by simply purchasing existing real estate in Madagascar.
This requires a pretty significant upfront investment (although Madagascar real estate remains very affordable compared to developed countries) – but there is a great potential for profits.
Buying up properties and renting them out or renovating and reselling them won’t make you rich overnight, but it’s a good, long term business opportunity.
Another way to make money in real estate is through construction.
Undeveloped properties can be acquired in the up-and-coming outskirts of Tana at very affordable prices (€10-20 per square meter).
Investors can buy smaller plots and build single family housing, or larger plots and subdivide the land into smaller parcels.
A word of caution: do not venture into the world of real estate in Madagascar unprepared. There are plenty of pitfalls. You must team up with the right people to make sure you get the best advice when starting a real estate business in Madagascar.
Here at Madagascar Invest, we have years of experience buying and developing properties in Madagascar. We remain at your disposal, should you require any advice about property development.
Real Estate Agency
As a property market, Madagascar remains underdeveloped, and so there is a lack of reliable, professional, and trustworthy real estate agents in Madagascar.
The few real estate agents that operate in the country do a very poor job.
Now, to be fair, this is also because the local population do not use real estate agents when looking to buy or rent a property – they use middlemen, or “mpanera”.
However, international expats coming to Madagascar and looking for properties may not be aware of the local customs. They naturally go searching for a real estate agent when wanting to source a property. Only to find that the real estate agents in Madagascar are both slow and unreliable.
Real estate agents overprice their properties, they show up late for appointments (if they even show up), they display properties that have already been sold, they have no online presence, and they often don’t speak English (can’t communicate with clients).
In summary: there is a need for professional real estate agents in Madagascar.
Anyone starting a reliable real estate agency targeting foreign buyers would effectively be able to corner a big part of the market.
Agribusiness
If you are looking to start a business in Madagascar, you may want to start an agribusiness.
What is an agribusiness?
An agribusiness is a business that revolves around growing and selling agricultural products such as fruits, vegetables, and so forth.
Starting an agribusiness venture in Madagascar is a great opportunity, because the barrier to entry is so low – anyone can do it.
Anyone can buy or rent a small piece of land and start growing food. Madagascar has so much farmland available at very low prices.
Furthermore, Madagascar is blessed with an abundance of different landscapes and climate zones, making it perfectly suited for growing a large variety of fruits, vegetables, herbs, nuts, spices, and more.
Some of the most interesting products you could grow are:
- Rice
- Litchi
- Mangos
- Avocados
- Vanilla
- Beans
- Cloves
- And more
Investors wishing to start an agribusiness in Madagascar can grow food for either the expanding domestic market, or for the enormous and insatiable international market.
Within Madagascar itself, the demand for staple foods such as rice, potatoes and other common vegetables and fruits is huge.
At the international level, there is a steadily growing demand for agricultural products from Madagascar.
Products like litchi and vanilla (of which Madagascar is the world’s largest producer) are popular around the world, and sell at a premium on the international market.
Use farming equipment to improve productivity
Madagascar may be large, but the amount of food being grown in Madagascar is no where close to capacity. This is because there is a lack of sophisticated farming methods and equipment in the country.
Adding a level of sophistication to the farming process by using farming equipment or tools would give the investor a clear advantage and help maximise profits.
If you are a budget investor and cannot afford to invest in farming equipment, a good solution is to take advantage of the affordable and highly skilled farming labor force in Madagascar.
This will allow you to get your agribusiness started at almost any budget.
Tourism
Tourism is one of Madagascar’s most important industries.
Although the Malagasy tourism industry pales in comparison to destinations like Thailand or the Philippines, tourism actually accounts for more than 15% of Madagascar’s GDP.
And even though the number of annual tourists is still relatively low at around 500,000 visitors per year, this number is expected to grow substantially over the next 5-10 years as Madagascar develops as a tourist destination.
Of course, the coronavirus put a temporary stick in the wheel of this development.
The virus and the ensuing global pandemic devastated the tourism sector in Madagascar, as it did in large parts of the world.
Many local tour operators and smaller hotels were forced to go out of business due to a sudden and complete lack of customers.
Many small businesses in Madagascar did not have the liquidity to survive for very long without customers.
So, why is tourism such a great business idea in Madagascar in 2023?
Well, while it is tragic that many businesses have been forced to shut down, the bright side is that this has freed up lots of space in the otherwise competitive Madagascar tourism market.
As a prospective tourism operator, you can get in now and fill a void that’s been left in the market.
In other words, 2023 is the perfect year to start a tourism business in Madagascar.
COVID hasn’t changed global tourism as much as one could have feared, and for Madagascar the fundamentals remain unchanged: the red island is set to become a major tourist destination over the coming years.
This means that the country will need everything from restaurants to hotels, bed and breakfasts, tour operators, rental companies, guides, cars, boats, you name it.
Starting a business within any of these areas could prove highly profitable.
Now, it’s important to remember that you probably won’t see instant returns when starting a business in the tourism industry. After all, it will take some time for tourism to reach previous years levels – let alone reach new record levels.
So an investment into the Malagasy tourism industry is a long-term play that will require patience, hard work and dedication.
But if you decide to give it a shot, and if you invest during this time of limited competition, you have a unique opportunity to become an established player in the industry.
Export
Despite being a small economy, Madagascar has an abundance of unique and interesting products that you can export to the world.
The most popular products to export from Madagascar are consumer goods. This includes food items such as agricultural products (think beans, vanilla, nuts and more).
Besides agricultural products, Madagascar also has plenty of locally processed food items you can export. There are too many to name, but some good examples include rum, juice, tea, coffee, spices, cheese, wine, jam, essential oils, and much more.
Another interesting export opportunity are textiles. Madagascar is becoming a local powerhouse in the textile manufacturing industry, due to its low wages.
Exporting products from Madagascar is a great way to support the local economy while promoting Malagasy products to the world.
To sell Malagasy products abroad, you can reach out to established retailers in your home country.
Alternatively, you can set up your own store (either a physical store or an ecommerce store) and sell products from Madagascar directly to consumers.
Import
Importing products to Madagascar from other countries is another great business opportunity.
Madagascar imports a wide variety of different items, including cars, electronics, food, and much more.
Many goods that are widely available in developed countries can be difficult to find in Madagascar. This presents a great opportunity for investors who are willing to import products to Madagascar.
In our experience, consumer electronics such as laptops and smartphones are especially expensive in Madagascar due to the high demand and low supply.
So importing consumer electronics and selling them in the domestic market is a very interesting business opportunity.
The relatively small price of consumer electronics means that this business can be started even by investors on a limited budget.
The best way to get started selling consumer goods in Madagascar is by selling directly to the consumer and avoiding any established retailers or middlemen.
Renting retail space and setting up your own shop instead of selling through another retailer will give you much higher profit margins.
Alternatively, if you are on a limited budget, another way to get started with very low overhead is to sell your goods on Facebook.
Facebook businesses are huge in Madagascar, as a large part of the population is accustomed to buying goods through Facebook.
Importing food items
Other things that are commonly imported include rice and other food items.
Malagasy people consume a lot of rice, and a large part of the country’s arable land is devoted to rice cultivation, however, Madagascar does not produce enough rice to satisfy the domestic demand.
Therefore, rice is imported in great quantities, especially from countries like Pakistan and India.
There are plenty of other items which can be imported to Madagascar. The list is too long to mention here. But as an aspiring entrepreneur, the best thing you can do is to identify which products are in high demand and import those products to Madagascar.
Education
If you want to start a business that helps people in a real and tangible way, you should look into starting an education business in Madagascar.
Public schools in Madagascar are underfunded and poorly equipped, making it impossible for them to teach students anything beyond the most basic skills. This leads people to seek out education on their own, through private schools and learning facilities.
The people of Madagascar are hungry for education, and you can make a business out of providing people with education, while supporting the development of the country at the same time.
There are a number of ways to start an education business. For example, you can either start a private school for children, or a school where adults can take courses in different subjects.
One segment of the population which are especially interested in education are young adults.
Young adults understand that education is the key to developing in Madagascar.
Some of the subjects that are in high demand among young adults in Madagascar are foreign languages, programming, entrepreneurship, and more.
Such skills may help Malagasy people obtain a well-paying job in a local company, or find a job abroad. This is why education is in such high demand.
Online Business
An online business is a type of business that sells services through the internet to customers around the world.
An online business can come in many forms, and the types of services which you can sell range from content writing to graphic design, customer support, social media marketing, web development and much more.
With its highly skilled yet affordable workforce, Madagascar is the perfect place to start an online business.
You can start an online business within any industry of your choice, hire talent locally and sell it to clients anywhere in the world.
Madagascar is made up of great programmers, great graphic designers, marketers and writers. You have all the talent available here to start a successful online business.
Digital services refers to services that are sold or offered to clients online. Some popular examples of digital services include:
- Digital marketing
- Social media management
- Content writing
- Graphic Design
One potential business idea would be to open a digital agency in Madagascar that sells any of the above mentioned services to clients all over the world.
In Madagascar you will find plenty of young and skilled people and you will have no shortage of options when it comes to hiring qualified workers.
These digital services are in demand all over the world, and you can start a company right here in Madagascar that has the entire world as its marketplace.
Start your business in Madagascar today
Now that you are familiar with some of the best business ideas in Madagascar, there’s only one thing left to do: act now and open your business in Madagascar!
Madagascar Invest is here to help you turn your business idea into reality. If you require any help setting up a business in Madagascar, do not hesitate to contact us.
