Economy Profile 2015 Doing Business 2015

 
Economy Profile 2015 Doing Business 2015
Doing Business 2015    Madagascar

                      Economy Profile 2015
                        Madagascar
Economy Profile 2015 Doing Business 2015
Doing Business 2015                   Madagascar                                                              2

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ISBN (paper): 978-1-4648-0351-2
ISBN (electronic): 978-1-4648-0352-9
DOI: 10.1596/978-1-4648-0351-2
ISSN: 1729-2638
Cover design: Corporate Visions, Inc.
Doing Business 2015                          Madagascar                                                                                     3

CONTENTS

Introduction .................................................................................................................................. 4
The business environment .......................................................................................................... 6
Starting a business ..................................................................................................................... 16
Dealing with construction permits ........................................................................................... 23
Getting electricity ....................................................................................................................... 31
Registering property .................................................................................................................. 37
Getting credit .............................................................................................................................. 44
Protecting minority investors ................................................................................................... 51
Paying taxes ................................................................................................................................ 61
Trading across borders .............................................................................................................. 66
Enforcing contracts .................................................................................................................... 71
Resolving insolvency .................................................................................................................. 78
Labor market regulation ........................................................................................................... 81
Distance to frontier and ease of doing business ranking ...................................................... 88
Resources on the Doing Business website .............................................................................. 91
Doing Business 2015                  Madagascar                                                                    4

INTRODUCTION
Doing Business sheds light on how easy or difficult it is     1, 2014 (except for the paying taxes indicators, which
for a local entrepreneur to open and run a small to           cover the period January–December 2013).
medium-size business when complying with relevant
                                                              The Doing Business methodology has limitations. Other
regulations. It measures and tracks changes in
                                                              areas important to business—such as an economy’s
regulations affecting 11 areas in the life cycle of a
                                                              proximity to large markets, the quality of its
business: starting a business, dealing with construction
                                                              infrastructure services (other than those related to
permits, getting electricity, registering property, getting
                                                              trading across borders and getting electricity), the
credit, protecting minority investors, paying taxes,
                                                              security of property from theft and looting, the
trading across borders, enforcing contracts, resolving
                                                              transparency       of      government      procurement,
insolvency and labor market regulation.
                                                              macroeconomic conditions or the underlying strength of
In a series of annual reports Doing Business presents         institutions—are not directly studied by Doing Business.
quantitative indicators on business regulations and the       The indicators refer to a specific type of business,
protection of property rights that can be compared            generally a local limited liability company operating in
across 189 economies, from Afghanistan to Zimbabwe,           the largest business city. Because standard assumptions
over time. The data set covers 47 economies in Sub-           are used in the data collection, comparisons and
Saharan Africa, 32 in Latin America and the Caribbean, 25     benchmarks are valid across economies. The data not
in East Asia and the Pacific, 26 in Eastern Europe and        only highlight the extent of obstacles to doing business;
Central Asia, 20 in the Middle East and North Africa and      they also help identify the source of those obstacles,
8 in South Asia, as well as 31 OECD high-income               supporting policy makers in designing regulatory reform.
economies. The indicators are used to analyze economic
                                                              More information is available in the full report. Doing
outcomes and identify what reforms have worked, where
                                                              Business 2015 presents the indicators, analyzes their
and why.
                                                              relationship with economic outcomes and presents
This economy profile presents the Doing Business              business regulatory reforms. The data, along with
indicators for Madagascar. To allow useful comparison, it     information on ordering Doing Business 2015, are
also provides data for other selected economies               available on the Doing Business website at
(comparator economies) for each indicator. The data in        http://www.doingbusiness.org.
this report are current as of June
Doing Business 2015                  Madagascar                                                                   5

CHANGES IN DOING BUSINESS 2015

As part of a 2-year update in methodology, Doing             Finally, the name of the employing workers indicator set
Business 2015 incorporates 7 important changes. First,       has been changed to labor market regulation, and the
the ease of doing business ranking as well as all topic-     scope of this indicator set has also been changed. The
level rankings are now computed on the basis of              indicators now focus on labor market regulation
distance to frontier scores (see the chapter on the          applying to the retail sector rather than the
distance to frontier and ease of doing business ranking).    manufacturing sector, and their coverage has been
Second, for the 11 economies with a population of more       expanded to include regulations on labor disputes and
than 100 million, data for a second city have been added     on benefits provided to workers. The labor market
to the data set and the ranking calculation. These           regulation indicators continue to be excluded from the
economies are Bangladesh, Brazil, China, India,              aggregate distance to frontier score and ranking on the
Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian     ease of doing business.
Federation and the United States. Third, for getting
                                                             Beyond these changes there are 3 other updates in
credit, the methodology has been revised for both the
                                                             methodology. For paying taxes, the financial statement
strength of legal rights index and the depth of credit
                                                             variables have been updated to be proportional to 2012
information index. The number of points has been
                                                             income per capita; previously they were proportional to
increased in both indices, from 10 to 12 for the strength
                                                             2005 income per capita. For enforcing contracts, the
of legal rights index and from 6 to 8 for the depth of
                                                             value of the claim is now set at twice the income per
credit information index. In addition, only credit bureaus
                                                             capita or $5,000, whichever is greater. For dealing with
and registries that cover at least 5% of the adult
                                                             construction permits, the cost of construction is now set
population can receive a score on the depth of credit
                                                             at 50 times income per capita (before, the cost was
information index.
                                                             assessed by the Doing Business respondents). In addition,
Fourth, the name of the protecting investors indicator set   this indicator set no longer includes the procedures for
has been changed to protecting minority investors to         obtaining a landline telephone connection.
better reflect its scope—and the scope of the indicator
                                                             For more details on the changes, see the “What is
set has been expanded to include shareholders’ rights in
                                                             changing in Doing Business?” chapter starting on page
corporate governance beyond related-party transactions.
                                                             24 of the Doing Business 2015 report. For more details
Fifth, the resolving insolvency indicator set has been
                                                             on the data and methodology, please see the “Data
expanded to include an index measuring the strength of
                                                             Notes” chapter starting on page 114 of the Doing
the legal framework for insolvency. Sixth, the calculation
                                                             Business 2015 report. For more details on the distance to
of the distance to frontier score for paying taxes has
                                                             frontier metric, please see the “Distance to frontier and
been changed. The total tax rate component now enters
                                                             ease of doing business ranking” chapter in this profile.
the score in a nonlinear fashion, in an approach different
from that used for all other indicators (see the chapter
on the distance to frontier and ease of doing business
ranking).
Doing Business 2015                  Madagascar                                                                    6

THE BUSINESS ENVIRONMENT
For policy makers trying to improve their economy’s
regulatory environment for business, a good place to start     ECONOMY OVERVIEW
is to find out how it compares with the regulatory
environment in other economies. Doing Business provides
an aggregate ranking on the ease of doing business
                                                               Region: Sub-Saharan Africa
based on indicator sets that measure and benchmark
regulations applying to domestic small to medium-size          Income category: Low income
businesses through their life cycle. Economies are ranked
from 1 to 189 by the ease of doing business ranking. This      Population: 22,924,851
year's report presents results for 2 aggregate measures:
the distance to frontier score and the ease of doing           GNI per capita (US$): 440
business ranking. The ranking of economies is determined
by sorting the aggregate distance to frontier (DTF) scores.    DB2015 rank: 163
The distance to frontier score benchmarks economies
with respect to regulatory practice, showing the absolute      DB2014 rank: 157*
distance to the best performance in each Doing Business
                                                               Change in rank: -6
indicator. An economy’s distance to frontier score is
indicated on a scale from 0 to 100, where 0 represents the
                                                               DB 2015 DTF: 49.25
worst performance and 100 the frontier. (See the chapter
on the distance to frontier and ease of doing business).       DB 2014 DTF: 48.91
The 10 topics included in the ranking in Doing Business
2015: starting a business, dealing with construction           Change in DTF: 0.34
permits, getting electricity, registering property, getting
credit, protecting minority investors, paying taxes, trading   * DB2014 ranking shown is not last year’s published
across borders, enforcing contracts and resolving              ranking but a comparable ranking for DB2014 that
insolvency. The labor market regulation indicators             captures the effects of such factors as data
(formerly employing workers) are not included in this          corrections and the changes in methodology. See
year’s aggregate ease of doing business ranking, but the       the data notes starting on page 114 of the Doing
data are presented in this year’s economy profile.             Business 2015 report for sources and definitions.
The aggregate ranking on the ease of doing business
benchmarks each economy’s performance on the
indicators against that of all other economies in the Doing
Business sample (figure 1.1). While this ranking tells much
about the business environment in an economy, it does
not tell the whole story. The ranking on the ease of doing
business, and the underlying indicators, do not measure all
aspects of the business environment that matter to firms
and investors or that affect the competitiveness of the
economy. Still, a high ranking does mean that the
government has created a regulatory environment
conducive to operating a business.
Doing Business 2015              Madagascar

      THE BUSINESS ENVIRONMENT
      Figure 1.1 Where economies stand in the global ranking on the ease of doing business

      Source: Doing Business database.
Doing Business 2015                    Madagascar

 THE BUSINESS ENVIRONMENT
 For policy makers, knowing where their economy                regional average (figure 1.2). The economy’s rankings
 stands in the aggregate ranking on the ease of doing          (figure 1.3) and distance to frontier scores (figure 1.4)
 business is useful. Also useful is to know how it ranks       on the topics included in the ease of doing business
 relative to comparator economies and relative to the          ranking provide another perspective.

Figure 1.2 How Madagascar and comparator economies rank on the ease of doing business

Note: The rankings are benchmarked to June 2014 and based on the average of each economy’s distance to frontier (DTF) scores
for the 10 topics included in this year’s aggregate ranking. The distance to frontier score benchmarks economies with respect to
regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s
distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier.
For the economies for which the data cover 2 cities, scores are a population-weighted average for the 2 cities.
Source: Doing Business database.
Doing Business 2015                    Madagascar                                                                         9

THE BUSINESS ENVIRONMENT

Figure 1.3 Rankings on Doing Business topics - Madagascar
(Scale: Rank 189 center, Rank 1 outer edge)

Figure 1.4 Distance to frontier scores on Doing Business topics - Madagascar
(Scale: Score 0 center, Score 100 outer edge)

Note: The rankings are benchmarked to June 2014 and based on the average of each economy’s distance to frontier (DTF) scores
for the 10 topics included in this year’s aggregate ranking. The distance to frontier score benchmarks economies with respect to
regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s
distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier.
For the economies for which the data cover 2 cities, scores are a population-weighted average for the 2 cities.
Source: Doing Business database.
Doing Business 2015                    Madagascar                                                                            10

THE BUSINESS ENVIRONMENT
Just as the overall ranking on the ease of doing business tells      Doing Business introduced the distance to frontier score. This
only part of the story, so do changes in that ranking. Yearly        measure shows how far on average an economy is from the
movements in rankings can provide some indication of                 best performance achieved by any economy on each Doing
changes in an economy’s regulatory environment for firms,            Business indicator.
but they are always relative.
                                                                     Comparing the measure for an economy at 2 points in time
Moreover, year-to-year changes in the overall rankings do            allows users to assess how much the economy’s regulatory
not reflect how the business regulatory environment in an            environment as measured by Doing Business has changed
economy has changed over time—or how it has changed in               over time—how far it has moved toward (or away from) the
different areas. To aid in assessing such changes,                   most efficient practices and strongest regulations in areas
                                                                     covered by Doing Business (figure 1.5).

Figure 1.5 How far has Madagascar come in the areas measured by Doing Business?

Note: The distance to frontier score shows how far on average an economy is from the best performance achieved by any economy on
each Doing Business indicator since 2010, except for getting credit, paying taxes, protecting minority investors and resolving insolvency
which had methodology changes in 2014 and thus are only comparable to 2013. The measure is normalized to range between 0 and 100,
with 100 representing the best performance (the frontier). See the data notes starting on page 114 of the Doing Business 2015 report for
more details on the distance to frontier score.
Source: Doing Business database.
Doing Business 2015                                Madagascar                                                                                                                                                       11

THE BUSINESS ENVIRONMENT
The absolute values of the indicators tell another part of                                           regulation—such as a regulatory process that can be
the story (table 1.1). The indicators, on their own or in                                            completed with a small number of procedures in a few
comparison with the indicators of a good practice                                                    days and at a low cost. Comparison of the economy’s
economy or those of comparator economies in the                                                      indicators today with those in the previous year may
region, may reveal bottlenecks reflected in large numbers                                            show where substantial bottlenecks persist—and where
of procedures, long delays or high costs. Or they may                                                they are diminishing.
reveal unexpected strengths in an area of business

 Table 1.1 Summary of Doing Business indicators for Madagascar

                                                                                                                                                                                             Best performer globally
                                                                                                                             Mozambique DB2015

                                                                                                                                                                 South Africa DB2015
                             Madagascar DB2015

                                                 Madagascar DB2014

                                                                                                          Mauritius DB2015
                                                                     Comoros DB2015

                                                                                                                                                 Rwanda DB2015
  Indicator
                                                                                      Kenya DB2015

                                                                                                                                                                                             DB2015
  Starting a Business
                                  37                  33              173              143                   29              107                 112                 61                  New Zealand (1)
  (rank)

  Starting a Business (DTF
                             92.02               92.10               57.65            74.02              92.47               82.96               81.66           89.43                 New Zealand (99.96)
  Score)

  Procedures (number)            4.0                 4.0                8.0           10.0                  5.0                9.0                8.0              5.0                 New Zealand (1.0)*

  Time (days)                    8.0                 8.0             15.0             30.0                  6.0              13.0                 6.5            19.0                   New Zealand (0.5)

  Cost (% of income per
                             13.5                12.9                114.0            42.7                  2.1              17.1                52.3              0.3                    Slovenia (0.0)
  capita)

  Paid-in min. capital (%
                                 0.0                 0.0             226.7               0.0                0.0                0.0                0.0              0.0                 112 Economies (0.0)*
  of income per capita)

  Dealing with
                                                                                                                                                                                         Hong Kong SAR,
  Construction Permits         177                 175                   31               95              117                   84                 34                32
                                                                                                                                                                                            China (1)
  (rank)

  Dealing with
                                                                                                                                                                                         Hong Kong SAR,
  Construction Permits       46.68               44.37               81.92            71.02              67.17               73.29               81.55           81.65
                                                                                                                                                                                          China (95.53)
  (DTF Score)
Doing Business 2015                                  Madagascar                                                                                                                                                      12

                                                                                                                                                                                            Best performer globally
                                                                                                                           Mozambique DB2015

                                                                                                                                                                South Africa DB2015
                            Madagascar DB2015

                                                 Madagascar DB2014

                                                                                                       Mauritius DB2015
                                                                      Comoros DB2015

                                                                                                                                                Rwanda DB2015
Indicator

                                                                                        Kenya DB2015

                                                                                                                                                                                            DB2015
                                                                                                                                                                                       Hong Kong SAR,
Procedures (number)         13.0                 12.0                 11.0                 8.0         13.0                11.0                 10.0            16.0
                                                                                                                                                                                         China (5.0)

Time (days)                123.0                161.0                113.0             125.0           245.0              144.0                 77.0            48.0                   Singapore (26.0)

Cost (% of warehouse
                            20.8                 21.9                    1.0               9.3           0.7                 4.4                 4.1              0.9                    Qatar (0.0)*
value)

Getting Electricity
                              189                  188                    81             151              41               164                    62            158                     Korea, Rep. (1)
(rank)

Getting Electricity (DTF
                           16.67                16.67                76.46             58.85           83.74              54.65                79.48            55.74                 Korea, Rep. (99.83)
Score)

Procedures (number)             6.0                  6.0                 3.0               6.0           4.0                 7.0                 4.0              5.0                 12 Economies (3.0)*

Time (days)                450.0                450.0                120.0             158.0           84.0               107.0                 34.0            226.0                 Korea, Rep. (18.0)*

Cost (% of income per
                           8,583.3              9,050.2              2,127.9           1,020.2         277.0              2,484.8              3,073.9          729.5                     Japan (0.0)
capita)

Registering Property
                              153                  152                 105               136              98               101                    15                97                    Georgia (1)
(rank)

Registering Property
                           51.72                51.63                63.83             56.88           66.00              64.51                89.20            66.02                   Georgia (99.88)
(DTF Score)

Procedures (number)             6.0                  6.0                 4.0               9.0           4.0                 6.0                 3.0              7.0                 4 Economies (1.0)*

Time (days)                 74.0                 74.0                 30.0              72.0           14.0                40.0                 32.0            23.0                  3 Economies (1.0)*

Cost (% of property
                            10.2                 10.3                 10.4                 4.3         10.6                  6.9                 0.1              6.2                 4 Economies (0.0)*
value)

Getting Credit (rank)         180                  178                 131               116              36               131                       4              52                 New Zealand (1)

Getting Credit (DTF
                            5.00                 5.00                30.00             35.00           65.00              30.00                90.00            60.00                 New Zealand (100)
Score)

Strength of legal rights
                                     1                    1                  6                7              6                    1               11                    5             3 Economies (12)*
index (0-12)
Doing Business 2015                                Madagascar                                                                                                                                                   13

                                                                                                                                                                                       Best performer globally
                                                                                                                      Mozambique DB2015

                                                                                                                                                          South Africa DB2015
                           Madagascar DB2015

                                               Madagascar DB2014

                                                                                                   Mauritius DB2015
                                                                   Comoros DB2015

                                                                                                                                          Rwanda DB2015
Indicator

                                                                                    Kenya DB2015

                                                                                                                                                                                       DB2015
Depth of credit
                                    0                   0                 0               0              7                   5                 7                  7              23 Economies (8)*
information index (0-8)

Credit registry coverage
                               0.2                 0.2                0.0              0.0         71.9                 5.7                2.4              0.0                   Portugal (100.0)
(% of adults)

Credit bureau coverage
                               0.0                 0.0                0.0              4.9           0.0                0.0               15.7            55.4                  23 Economies (100.0)*
(% of adults)

Protecting Minority
                                87                  84              122              122              28                 94               117                 17                  New Zealand (1)
Investors (rank)

Protecting Minority
                           53.33               53.33               45.83            45.83          65.00              51.67               46.67           67.50                 New Zealand (81.67)
Investors (DTF Score)

Extent of conflict of
interest regulation            5.7                 5.7                4.7              4.7           7.3                6.3                6.3              8.0                   Singapore (9.3)*
index (0-10)

Extent of shareholder
governance index (0-           5.0                 5.0                4.5              4.5           5.7                4.0                3.0              5.5                     France (7.8)*
10)

Strength of minority
investor protection            5.3                 5.3                4.6              4.6           6.5                5.2                4.7              6.8                  New Zealand (8.2)
index (0-10)

                                                                                                                                                                                United Arab Emirates
Paying Taxes (rank)             65                  60              167              102              13              123                   27                19
                                                                                                                                                                                        (1)*

Paying Taxes (DTF                                                                                                                                                               United Arab Emirates
                           77.78               77.46               47.37            71.49          91.92              66.85               85.79           88.73
Score)                                                                                                                                                                                (99.44)*

Payments (number per                                                                                                                                                              Hong Kong SAR,
                           23.0                23.0                33.0             30.0             8.0              37.0                17.0              7.0
year)                                                                                                                                                                               China (3.0)*

Time (hours per year)      183.0               183.0               100.0            201.5          152.0              230.0               107.0           200.0                  Luxembourg (55.0)

Trading Across Borders
                             109                 110                144              153              17              129                 164             100                       Singapore (1)
(rank)

Trading Across Borders     68.98               68.17               59.33            54.49          87.74              64.76               44.67           71.05                   Singapore (96.47)
Doing Business 2015                                 Madagascar                                                                                                                                                       14

                                                                                                                                                                                            Best performer globally
                                                                                                                          Mozambique DB2015

                                                                                                                                                                South Africa DB2015
                           Madagascar DB2015

                                                Madagascar DB2014

                                                                                                      Mauritius DB2015
                                                                     Comoros DB2015

                                                                                                                                               Rwanda DB2015
Indicator

                                                                                       Kenya DB2015

                                                                                                                                                                                            DB2015
(DTF Score)

Documents to export
                                    5                    5                  9                8              4                    7                  7                   5                 Ireland (2)*
(number)

Time to export (days)      22.0                 22.0                 31.0              26.0           10.0                21.0                 26.0             16.0                  5 Economies (6.0)*

Cost to export (US$ per
                          1,195.0              1,195.0              1,295.0           2,255.0         675.0              1,100.0              3,245.0          1,830.0                Timor-Leste (410.0)
container)

Cost to export (deflated
                         1,195.0               1,303.7              1,295.0           2,255.0         675.0              1,100.0              3,245.0          1,830.0
US$ per container)

Documents to import
                                    9                    9                  8                9              5                    9                  9                   6                 Ireland (2)*
(number)

Time to import (days)      21.0                 21.0                 24.0              26.0             9.0               25.0                 27.0             21.0                    Singapore (4.0)

Cost to import (US$ per
                        1,555.0                1,555.0              1,295.0           2,350.0         710.0              1,600.0              4,990.0          2,080.0                Singapore (440.0)
container)

Cost to import (deflated
                         1,555.0               1,696.5              1,295.0           2,350.0         710.0              1,600.0              4,990.0          2,080.0
US$ per container)

Enforcing Contracts
                             146                  145                 177               137              44               164                    62                 46                  Singapore (1)
(rank)

Enforcing Contracts
                          45.91                45.91                33.20             48.96           66.22              39.81                63.94            66.14                  Singapore (89.54)
(DTF Score)

Time (days)               871.0                871.0                506.0             465.0           519.0              760.0                230.0            600.0                  Singapore (150.0)

Cost (% of claim)          42.4                 42.4                 89.4              47.2           25.0               119.0                 82.7             33.2                     Iceland (9.0)

Procedures (number)        38.0                 38.0                 43.0              44.0           34.0                30.0                 23.0             29.0                  Singapore (21.0)*

Resolving Insolvency
                             129                  127                 189               134              43               107                  101                  39                    Finland (1)
(rank)

Resolving Insolvency
                          34.43                34.43                 0.00             33.31           62.81              40.75                41.77            64.51                    Finland (93.85)
(DTF Score)
Doing Business 2015                                   Madagascar                                                                                                                                                   15

                                                                                                                                                                                           Best performer globally
                                                                                                                           Mozambique DB2015

                                                                                                                                                               South Africa DB2015
                               Madagascar DB2015

                                                   Madagascar DB2014

                                                                                                        Mauritius DB2015
                                                                        Comoros DB2015

                                                                                                                                               Rwanda DB2015
 Indicator

                                                                                         Kenya DB2015

                                                                                                                                                                                           DB2015
                                                                         no
 Time (years)                      2.0                 2.0                                  4.5           1.7                5.0                2.5              2.0                    Ireland (0.4)
                                                                       practice

                                                                         no
 Cost (% of estate)            30.0                30.0                                  22.0           14.5                 9.0               29.0            18.0                     Norway (1.0)
                                                                       practice

 Outcome (0 as
 piecemeal sale and 1 as                0                   0                  0               1              1                   0                 0                  0
 going concern)

 Recovery rate (cents on
                               11.7                11.7                    0.0           27.1           67.4               17.6                19.5            35.7                     Japan (92.9)
 the dollar)

 Strength of insolvency                                                  no
                                   9.0                 9.0                                  6.0           8.5              10.0                10.0            14.5                  5 Economies (15.0)*
 framework index (0-16)                                                practice

Note: DB2014 rankings shown are not last year’s published rankings but comparable rankings for DB2014 that capture the effects of such
factors as data corrections and changes to the methodology. Trading across borders deflated and non-deflated values are identical in
DB2015 because it is defined as the base year for the deflator. The best performer on time for paying taxes is defined as the lowest time
recorded among all economies in the DB2015 sample that levy the 3 major taxes: profit tax, labor taxes and mandatory contributions, and
VAT or sales tax. If an economy has no laws or regulations covering a specific area—for example, insolvency—it receives a “no practice”
mark. Similarly, an economy receives a “no practice” or “not possible” mark if regulation exists but is never used in practice or if a
competing regulation prohibits such practice. Either way, a “no practice” mark puts the economy at the bottom of the ranking on the
relevant indicator.
* Two or more economies share the top ranking on this indicator. A number shown in place of an economy’s name indicates the number
of economies that share the top ranking on the indicator. For a list of these economies, see the Doing Business website
(http://www.doingbusiness.org).
Source: Doing Business database.
Doing Business 2015                        Madagascar                                                                  16

STARTING A BUSINESS
Formal registration of companies has many                                WHAT THE STARTING A BUSINESS
immediate benefits for the companies and for
business owners and employees. Legal entities can                        INDICATORS MEASURE
outlive their founders. Resources are pooled as
several shareholders join forces to start a company.                     Procedures to legally start and operate a
Formally registered companies have access to                             company (number)
services and institutions from courts to banks as well
                                                                          Preregistration (for example, name
as to new markets. And their employees can benefit
                                                                          verification or reservation, notarization)
from protections provided by the law. An additional
benefit comes with limited liability companies. These                     Registration in the economy’s largest
limit the financial liability of company owners to their                  business city1
investments, so personal assets of the owners are not
                                                                          Postregistration (for example, social security
put at risk. Where governments make registration
                                                                          registration, company seal)
easy, more entrepreneurs start businesses in the
formal sector, creating more good jobs and                               Time required to complete each procedure
generating more revenue for the government.                              (calendar days)

What do the indicators cover?                                             Does not include time spent gathering
                                                                          information
Doing Business measures the ease of starting a
business in an economy by recording all procedures                        Each procedure starts on a separate day (2
officially required or commonly done in practice by                       procedures cannot start on the same day).
an entrepreneur to start up and formally operate an                       Procedures that can be fully completed
industrial or commercial business—as well as the                          online are recorded as ½ day.
time and cost required to complete these procedures.                      Procedure completed once final document is
It also records the paid-in minimum capital that                          received
companies must deposit before registration (or
within 3 months). The ranking of economies on the                         No prior contact with officials
ease of starting a business is determined by sorting                     Cost required to complete each procedure
their distance to frontier scores for starting a                         (% of income per capita)
business. These scores are the simple average of the
distance to frontier scores for each of the component                     Official costs only, no bribes
indicators.                                                               No professional fees unless services required
To make the data comparable across economies,                             by law
Doing Business uses several assumptions about the                        Paid-in minimum capital (% of income
business and the procedures. It assumes that all                         per capita)
information is readily available to the entrepreneur
and that there has been no prior contact with                              Deposited in a bank or with a notary before
officials. It also assumes that the entrepreneur will                      registration (or within 3 months)
pay no bribes. And it assumes that the business:
      Is a limited liability company, located in the                    Has a start-up capital of 10 times income per
       largest business city and is 100% domestically                     capita.
       owned1.
                                                                         Has a turnover of at least 100 times income per
      Has between 10 and 50 employees.                                   capita.
      Conducts general commercial or industrial                         Does not qualify for any special benefits.
       activities.
                                                                         Does not own real estate.

1
    For the 11 economies with a population of more than 100 million, data for a second city have been added.
Doing Business 2015                    Madagascar                                                                           17

STARTING A BUSINESS

Where does the economy stand today?
What does it take to start a business in Madagascar?              largest business city of an economy, except for 11
According to data collected by Doing Business, starting a         economies for which the data are a population-weighted
business there requires 4.0 procedures, takes 8.0 days,           average of the 2 largest business cities. See the chapter
costs 13.5% of income per capita and requires paid-in             on distance to frontier and ease of doing business
minimum capital of 0.0% of income per capita (figure              ranking at the end of this profile for more details.
2.1). Most indicator sets refer to a case scenario in the

Figure 2.1 What it takes to start a business in Madagascar
Paid-in minimum capital (% of income per capita): 0.0

Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the
total time calculation. For more information on the methodology of the starting a business indicators, see the Doing Business
website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter.
Source: Doing Business database.
Doing Business 2015                  Madagascar                                                              18

STARTING A BUSINESS
Globally, Madagascar stands at 37 in the ranking of 189      average ranking provide other useful information for
economies on the ease of starting a business (figure 2.2).   assessing how easy it is for an entrepreneur in
The rankings for comparator economies and the regional       Madagascar to start a business.

Figure 2.2 How Madagascar and comparator economies rank on the ease of starting a
business

Source: Doing Business database.
Doing Business 2015                    Madagascar                                                                     19

STARTING A BUSINESS
Economies around the world have taken steps making it             they often are part of a larger regulatory reform
easier to start a business—streamlining procedures by             program. Among the benefits have been greater firm
setting up a one-stop shop, making procedures simpler             satisfaction and savings and more registered businesses,
or faster by introducing technology and reducing or               financial resources and job opportunities.
eliminating minimum capital requirements. Many have
                                                                  What business registration reforms has Doing Business
undertaken business registration reforms in stages—and
                                                                  recorded in Madagascar (table 2.1)?

Table 2.1 How has Madagascar made starting a business easier—or not?
By Doing Business report year from DB2010 to DB2015

DB year            Reform

                    Madagascar made starting a business easier by streamlining
DB2010              procedures at the one-stop shop and eliminating the stamp
                    duty and the minimum capital requirement.
                    Madagascar eased the process of starting a business by
                    eliminating the minimum capital requirement, but also made it
DB2012
                    more difficult by introducing the requirement of obtaining a
                    tax identification number.
                    Madagascar made starting a business easier by allowing the
DB2013              one-stop shop to deal with the publication of the notice of
                    incorporation.
                    Madagascar made starting a business more difficult by
DB2014              increasing the cost to register with the National Center for
                    Statistics.
Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports
for these years, available at http://www.doingbusiness.org.
Source: Doing Business database.
Doing Business 2015                   Madagascar                                                                 20

STARTING A BUSINESS

What are the details?
Underlying the indicators shown in this chapter for
                                                             STANDARDIZED COMPANY
Madagascar is a set of specific procedures—the
bureaucratic and legal steps that an entrepreneur
must complete to incorporate and register a new               Legal form: Socièté a Responsabilité Limitée
firm. These are identified by Doing Business through          (SARL)
collaboration with relevant local professionals and
the study of laws, regulations and publicly available         Paid in minimum capital requirement: MGA 0
information on business entry in that economy.                City: Antananarivo
Following is a detailed summary of those procedures,
along with the associated time and cost. These                Start-up Capital: 10 times GNI per capita
procedures are those that apply to a company
matching      the    standard     assumptions      (the
“standardized company”) used by Doing Business in
collecting the data (see the section in this chapter on
what the indicators measure).
Table 2.2 Summary of time, cost and procedures for starting a business in Madagascar
                                                                                    Time to
 No.    Procedure                                                                               Cost to complete
                                                                                   complete
       Obtain a provisional fiscal identification number

       Prior to registration of the company, the entrepreneur has to obtain a
       provisional fiscal identification number. In order to do so, the
       entrepreneur has to apply online and then submit the registration form
   1   together with other documents to the EDBM fiscal.                            1 day          no charge

       Agency: Tax registration - NIFONLINE

       Deposit registered statutes, apply for license (carte
       professionnelle), obtain a final fiscal identification number, and
       obtain statistical identifications

       The k-bis, statistical card, tax registration confirmation, commercial
       registration number, and professional card (carte professionelle) can be
       obtained in about 2 days. Owing to reforms, a notice of publication is
       no longer needed to obtain the k-bis. Since 2007, the one stop-shop
       (Guichet Unique, GUIDE) sends the company the certificate for the            4 days        see comment
   2
       deposit of statutes (certificat de dépôt d'actes). When filing all
       documents needed to obtain the k-bis, the company must provide
       GUIDE with a stamped envelope. The company can continue with
       subsequent procedures in the meantime.
       The firm's management also needs to file forms for each employee with
       the National Social Security Fund (Caisse Nationale de Prevoyance
       Sociale). The required forms, the registration application (demande
       d'immatriculation) and the application for workers affiliation (demande
       'affiliation travailleur) must be filed along with the corporate
Doing Business 2015                     Madagascar                                                             21

                                                                                    Time to
  No.    Procedure                                                                            Cost to complete
                                                                                   complete
        registration certificate and notarized copies of each employee’s
        passport and birth certificate, if under age 18.
        To file for health insurance, the company promoters must file two
        copies of an application form (bulletin d'adhesion nouveau membre)
        along with a list of names of all employees and their identity cards.
        According to ""Nouvelles N°1534 du 21 mars 2009"" it is possible to
        register at the one stop shop (at the EDBM) for the Caisse Nationale de
        Prevoyance Sociale and the Organization Sanitaire Tananarivienne
        InterEntreprise.
        It takes on average 4 to 8 days to get registered with the EDBM. Then it
        takes about 2 days to publish the notice of constitution.

        Fee schedule:
        • Commercial registration fee: MGA 15,500.
        • Deed registration costs: MGA 2,000.
        • K•bis: MGA 2,000.
        • Institut National de la Statistique Malgache (INSTAT) (see Decree
        2005-380, dated June 22, 2005): MGA 40,000.
        • Registration fees: 0.5% of the share capital.
        • Fee to publish a notice of constitution in a daily newspaper:
        approximately MGA 23,500.
        In addition, the following fees need to be paid:
        • 0.2% of the lease
        • Payment of the income tax (accompte de l' impot sur le revenu): MGA
        320,000

        Agency: EDBM

        File a notice of constitution to be published in a French newspaper

        Entrepreneurs must publish a legal notice of constitution in a
        newspaper which can be completed within 2 days. The published
        extract is also submitted together with the company’s application for       2 days       no charge
   3
        registration at the one-stop shop (EDBM).

        Agency: EDBM

        Register employees with Social Security

        The company must register its employees with the National Social
        Security Fund (Caisse Nationale de Prevoyance Sociale), and file two
        copies of an application form (bulletin d'adhesion nouveau membre)
   4    along with a list of names of all employees and their identity cards to     1 day        no charge
        enroll for health insurance.

        Agency: EDBM

* Takes place simultaneously with another procedure.
Note: Online procedures account for 0.5 days in the total time calculation.
Source: Doing Business database.
Doing Business 2015   Madagascar   22
Doing Business 2015                   Madagascar                                                                23

DEALING WITH CONSTRUCTION PERMITS
Regulation of construction is critical to protect the      WHAT THE DEALING WITH CONSTRUCTION
public. But it needs to be efficient, to avoid excessive
                                                           PERMITS INDICATORS MEASURE
constraints on a sector that plays an important part in
every economy. Where complying with building
regulations is excessively costly in time and money,        Procedures to legally build a warehouse
many builders opt out. They may pay bribes to pass          (number)
inspections or simply build illegally, leading to            Submitting all relevant documents and
hazardous construction that puts public safety at risk.      obtaining all necessary clearances, licenses,
Where compliance is simple, straightforward and              permits and certificates
inexpensive, everyone is better off.                         Submitting all required notifications and
What do the indicators cover?                                receiving all necessary inspections

Doing Business records the procedures, time and cost         Obtaining utility connections for water and
for a business in the construction industry to obtain        sewerage
all the necessary approvals to build a warehouse in          Registering the warehouse after its
the economy’s largest business city, connect it to           completion (if required for use as collateral or
basic utilities and register the warehouse so that it        for transfer of the warehouse)
can be used as collateral or transferred to another         Time required to complete each procedure
entity.                                                     (calendar days)
The ranking of economies on the ease of dealing with         Does not include time spent gathering
construction permits is determined by sorting their          information
distance to frontier scores for dealing with
                                                             Each procedure starts on a separate day.
construction permits. These scores are the simple
                                                             Procedures that can be fully completed online
average of the distance to frontier scores for each of
                                                             are recorded as ½ day.
the component indicators.
                                                             Procedure considered completed once final
To make the data comparable across economies,                document is received
Doing Business uses several assumptions about the
business and the warehouse, including the utility            No prior contact with officials
connections.                                                Cost required to complete each procedure (%
The business:                                               of warehouse value)
                                                             Official costs only, no bribes
       Is a limited liability company operating in
        the construction business and located in                Will have complete architectural and
        the largest business city. For the 11                    technical plans prepared by a licensed
        economies with a population of more than                 architect or engineer.
        100 million, data for a second city have
                                                                Will be connected to water and sewerage
        been added. Is domestically owned and
                                                                 (sewage system, septic tank or their
        operated.
                                                                 equivalent). The connection to each utility
       Has 60 builders and other employees.                     network will be 150 meters (492 feet) long.
The warehouse:                                                  Will be used for general storage, such as of
                                                                 books or stationery (not for goods requiring
       Is valued at 50 times income per capita.
                                                                 special conditions).
       Is a new construction (there was no
                                                                Will take 30 weeks to construct (excluding all
        previous construction on the land).
                                                                 delays due to administrative and regulatory
                                                                 requirements).
Doing Business 2015                    Madagascar                                                                         24

DEALING WITH CONSTRUCTION PERMITS
Where does the economy stand today?
What does it take to comply with the formalities to build        business city of an economy, except for 11 economies for
a warehouse in Madagascar? According to data collected           which the data are a population-weighted average of the
by Doing Business, dealing with construction permits             2 largest business cities. See the chapter on distance to
there requires 13.0 procedures, takes 123.0 days and             frontier and ease of doing business ranking at the end of
costs 20.8% of the warehouse value (figure 3.1). Most            this profile for more details.
indicator sets refer to a case scenario in the largest

Figure 3.1 What it takes to comply with formalities to build a warehouse in Madagascar

Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the
total time calculation. For more information on the methodology of the dealing with construction permits indicators, see the
Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the
end of this chapter.
Source: Doing Business database.
Doing Business 2015                Madagascar                                                                   25

DEALING WITH CONSTRUCTION PERMITS
Globally, Madagascar stands at 177 in the ranking of 189   other useful information for assessing how easy it is for
economies on the ease of dealing with construction         an entrepreneur in Madagascar to legally build a
permits (figure 3.2). The rankings for comparator          warehouse.
economies and the regional average ranking provide

Figure 3.2 How Madagascar and comparator economies rank on the ease of dealing with construction permits

Source: Doing Business database.
Doing Business 2015                    Madagascar                                                                   26

DEALING WITH CONSTRUCTION PERMITS
Smart regulation ensures that standards are met while             an effort to ensure building safety while keeping
making compliance easy and accessible to all. Coherent            compliance costs reasonable, governments around the
and transparent rules, efficient processes and adequate           world have worked on consolidating permitting
allocation of resources are especially important in sectors       requirements. What construction permitting reforms has
where safety is at stake. Construction is one of them. In         Doing Business recorded in Madagascar (table 3.1)?

Table 3.1 How has Madagascar made dealing with construction permits easier—or not?
By Doing Business report year from DB2010 to DB2015

DB year            Reform

                    Madagascar made dealing with construction permits easier by
DB2015
                    reducing the time needed to obtain a building permit.
Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports
for these years, available at http://www.doingbusiness.org.
Source: Doing Business database.
Doing Business 2015                      Madagascar                                                                     27

DEALING WITH CONSTRUCTION PERMITS
What are the details?
The indicators reported here for Madagascar are
                                                                 BUILDING A WAREHOUSE
based on a set of specific procedures—the steps that
a company must complete to legally build a
warehouse—identified by Doing Business through                    Estimated cost of
information collected from experts in construction                                          MGA 49,937,712
                                                                  construction :
licensing, including architects, civil engineers,
construction lawyers, construction firms, utility
                                                                  City :                    Antananarivo
service providers and public officials who deal with
building regulations. These procedures are those               The procedures, along with the associated time and cost,
that apply to a company and structure matching the             are summarized below.
standard assumptions used by Doing Business in
collecting the data (see the section in this chapter on
what the indicators cover).
Table 3.2 Summary of time, cost and procedures for dealing with construction permits in Madagascar
                                                                                        Time to
  No.    Procedure                                                                                 Cost to complete
                                                                                       complete
        Obtain property registration certificates

        BuildCo must obtain two copies of all the property registration
        documents.                                                                      7 days        MGA 4,000
   1
        Agency: Land Administration Department (Service des Domaines)

        * Obtain official topographical plan of the plot

        Five copies of the official topographical plan for the property with
        coordinates are needed. The cost of each copy is MGA 1,000                      5 days        MGA 5,000
   2
        Agency: Topographical Services (Service Topographique)

        * Request an alignment permit from the Commune of
        Antananarivo

        The alignment permit is a mandatory document to obtain a building
        permit. The request for this permit is made on a standard form and is
        submitted by the owner, in duplicate, to the City Council (Commune
        d’Antananarivo), along with proof of ownership.

        The planning officer will prepare a sketch of alignment and a report
   3    (procès verbal) detailing the constraints of alignment with the road            1 day          no charge
        allowances of the Master Plan (delimitation of the unbuildable portion).
        The file is then sent to the Régional de l’Aménagement du Territoire et
        de la Ville, which verifies that the file is in conformity with the rules of
        urban planning and the provisions of the Master Plan of the Commune.
        The file is then returned to the Town Hall.

        A receipt showing that the request was made will be given back to
        BuildCo and at the same time, an appointment date will be provided for
        the site visit with the owner and 2 inspectors.
Doing Business 2015                     Madagascar                                                              28

                                                                                   Time to
No.    Procedure                                                                             Cost to complete
                                                                                  complete

      Agency: Commune of Antananarivo

      Receive inspection from SRAT

      The inspection is carried out by the Provincial Service of Land
      (Développement Aménagement du Territoire, SRAT) and the land
      owner. These inspections are necessary to obtain SRAT’s approval of
      the building permit. In addition to the first inspection before the start
      of construction work, SRAT may carry out several other random                5 days       no charge
4
      inspections. Technical directives for construction work include, among
      other things, a check of the center line of the street, the street
      boundaries, blind walls, and openings in walls.

      Agency: SRAT (Provincial Service of Land)

      Obtain the alignment permit from the Commune of Antananarivo

      The Urban Commune checks the design plans and supporting
      documents to ensure that no documents are missing.                          20 days      MGA 60,000
5
      Agency: Commune of Antananarivo

      Request and obtain the planning requirements from SRAT

      Once the alignment permit has been obtained, BuildCo must obtain the
      planning requirements (presciption d’urbanisme). This planning
      requirement document is obtained from the Service Regional de
      l'Amenagement du Territoire (SRAT) in one week. This document is
      necessary to show that the entrepreneur has the right to build on that
      land. The required documents are:

6     - Official plan of the land with laborde coordinates (1 copy)                7 days       no charge
      - Certificate of legal status that is less than 3 months old (1 copy)
      - Duly complete form to request the prescription d'urbanisme obtained
      at the City Hall Analakely (1 copy)
      - Alignment authorization (issued by the CUA)
      - Alignment Sketch (issued by the CUA)

      Agency: Service Regional de l'Amenagement du Territoire (SRAT)

      Request and obtain building permit

      The building permit is now completed in 3 steps:

7     (i) obtain the alignment permit                                             45 days    MGA 7,803,000
      (ii) obtain the planning permission certificate

      Once these two steps are completed, BuildCo may now request the
      building permit and submit all necessary documents. Only completed
Doing Business 2015                     Madagascar                                                               29

                                                                                    Time to
No.    Procedure                                                                              Cost to complete
                                                                                   complete
      applications are accepted at the Commune Urbaine d'Antananarivo
      (CUA- one-stop shop).
      The cost is calculated based on the volume of the building before SPAT
      issues its opinion. The cost can vary from MGA 1,000.00 to MGA
      2,000.00 per cubic meter.

      Documents to be provided are:
      - Alignment permit issued by the CUA
      - Official survey plan of the land with laborde coordinates obtained
      from the Topographic Service Anosy (1 copy)
      - Proof of ownership that is less than 3 months old (1 copy)
      - Alignment with prescription planning permission (1 copy)

      Documents for the applicant:
      - Technical data sheet completed and signed by architect (1 copy)
      - Certified copy of the ID (carte d’identite nationale) (1 copy)
      - 2 stamped and addressed envelopes
      - Pictures of the land and its surroundings
      - All required plans including the site plan with the septic tank location
      clearly marked

      Agency: Commune of Antananarivo

      Receive final inspection at the end of construction by SRAT

      The final inspection and approval by SRAT are required to obtain the
      certificate of occupancy.                                                     1 day        no charge
8
      Agency: SRAT (Provincial Service of Land)

      Receive inspection by fire protection service

9                                                                                   1 day        no charge
      Agency: Fire Service (Pompiers)

      Obtain occupancy certificate

10                                                                                 15 days       no charge
      Agency: Commission

      * Apply for water connection

11                                                                                  1 day        no charge
      Agency: JIRAMA
Doing Business 2015                     Madagascar                                                          30

                                                                                 Time to
  No.    Procedure                                                                         Cost to complete
                                                                                complete
        JIRAMA inspects the building to prepare an estimate

        BuildCo receives the cost estimates 2 weeks after JIRAMA inspects the
        building and can pay them immediately and acquire the connection
  12    one week later.                                                          1 day        no charge

        Agency: JIRAMA

        Obtain water connection

        The fee for water connection is around MGA 2.5 million.
  13                                                                            21 days    MGA 2,500,000
        Agency: JIRAMA

* Takes place simultaneously with another procedure.
Note: Online procedures account for 0.5 days in the total time calculation.
Source: Doing Business database.
Doing Business 2015                      Madagascar                                                                 31

GETTING ELECTRICITY
Access to reliable and affordable electricity is vital for     WHAT THE GETTING ELECTRICITY
businesses. To counter weak electricity supply, many
firms in developing economies have to rely on self-            INDICATORS MEASURE
supply, often at a prohibitively high cost. Whether
electricity is reliably available or not, the first step for   Procedures to obtain an electricity
a customer is always to gain access by obtaining a             connection (number)
connection.
                                                                Submitting all relevant documents and
What do the indicators cover?                                   obtaining all necessary clearances and permits
Doing Business records all procedures required for a            Completing all required notifications and
local business to obtain a permanent electricity                receiving all necessary inspections
connection and supply for a standardized warehouse,
as well as the time and cost to complete them. These            Obtaining external installation works and
procedures include applications and contracts with              possibly purchasing material for these works
electricity utilities, clearances from other agencies           Concluding any necessary supply contract and
and the external and final connection works. The                obtaining final supply
ranking of economies on the ease of getting
electricity is determined by sorting their distance to         Time required to complete each procedure
frontier scores for getting electricity. These scores are      (calendar days)
the simple average of the distance to frontier scores           Is at least 1 calendar day
for each of the component indicators. To make the
data comparable across economies, several                       Each procedure starts on a separate day
assumptions are used.                                           Does not include time spent gathering
The warehouse:                                                  information

        Is owned by a local entrepreneur, located              Reflects the time spent in practice, with little
         in the economy’s largest business city, in             follow-up and no prior contact with officials
         an area where other warehouses are                    Cost required to complete each procedure
         located. For the 11 economies with a                  (% of income per capita)
         population of more than 100 million, data
                                                                Official costs only, no bribes
         for a second city have been added.
                                                                Excludes value added tax
        Is not in a special economic zone where
         the connection would be eligible for
         subsidization or faster service.                          Is to either the low-voltage or the medium-
                                                                    voltage distribution network and either
        Is located in an area with no physical
                                                                    overhead or underground, whichever is more
         constraints (ie. property not near a railway).
                                                                    common in the area where the warehouse is
        Is a new construction being connected to                   located. Included only negligible length in the
         electricity for the first time.                            customer’s private domain.
        Is 2 stories, both above ground, with a total             Requires crossing of a 10-meter road but all
         surface of about 1,300.6 square meters                     the works are carried out in a public land, so
         (14,000 square feet), is built on a plot of                there is no crossing into other people's
         929 square meters (10,000 square feet), is                 private property.
         used for storage of refrigerated goods
                                                                   Involves installing one electricity meter. The
The electricity connection:                                         monthly electricity consumption will be
                                                                    26880 kilowatt hour (kWh). The internal
        Is 150 meters long and is a 3-phase, 4-wire
                                                                    electrical wiring has been completed.
         Y, 140-kilovolt-ampere (kVA) (subscribed
         capacity) connection.
Doing Business 2015                      Madagascar                                                                              32

GETTING ELECTRICITY
Where does the economy stand today?
What does it take to obtain a new electricity connection             Most indicator sets refer to a case scenario in the largest
in Madagascar? According to data collected by Doing                  business city of an economy, except for 11 economies for
Business, getting electricity there requires 6.0 procedures,         which the data are a population-weighted average of the
takes 450.0 days and costs 8583.3% of income per capita              2 largest business cities. See the chapter on distance to
(figure 4.1).                                                        frontier and ease of doing business ranking at the end of
                                                                     this        profile        for        more         details.

Figure 4.1 What it takes to obtain an electricity connection in Madagascar

Note: Time shown in the figure above may not reflect simultaneity of procedures. For more information on the methodology of the
getting electricity indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected
here, see the summary at the end of this chapter.
Source: Doing Business database.
Doing Business 2015                  Madagascar                                                                  33

GETTING ELECTRICITY
Globally, Madagascar stands at 189 in the ranking of 189     average ranking provide another perspective in assessing
economies on the ease of getting electricity (figure 4.2).   how easy it is for an entrepreneur in Madagascar to
The rankings for comparator economies and the regional       connect a warehouse to electricity.

Figure 4.2 How Madagascar and comparator economies rank on the ease of getting electricity

Source: Doing Business database.
Doing Business 2015                      Madagascar                                                                         34

GETTING ELECTRICITY
What are the details?
The indicators reported here for Madagascar are based
                                                                       OBTAINING AN ELECTRICITY CONNECTION
on a set of specific procedures—the steps that an
entrepreneur must complete to get a warehouse
connected to electricity by the local distribution utility—                                          Jiro sy rano malagasy
                                                                       Name of utility:
identified by Doing Business. Data are collected from the                                            (JIRAMA)
distribution utility, then completed and verified by
electricity regulatory agencies and independent                        City:                         Antananarivo
professionals such as electrical engineers, electrical
                                                                    The procedures are those that apply to a warehouse and
contractors and construction companies. The electricity             electricity connection matching the standard
distribution utility surveyed is the one serving the area           assumptions used by Doing Business in collecting the
(or areas) in which warehouses are located. If there is a           data (see the section in this chapter on what the
choice of distribution utilities, the one serving the largest       indicators cover). The procedures, along with the
number         of        customers         is       selected.       associated time and cost, are summarized below.
Table 4.2 Summary of time, cost and procedures for getting electricity in Madagascar
                                                                                           Time to
  No.    Procedure                                                                                         Cost to complete
                                                                                          complete
        The client applies for electricity connection and awaits estimate of
        connection fees from Jiro sy rano malagasy (JIRAMA)

        The application can be submitted by mail, letter, or in person at one of
        the utility’s agencies. The client will need to attach some documents to
        the application, with the client’s personal and professional details, a        15 calendar days        MGA 0
   1
        description of the works and of the electrical installation, as well as a
        notarized Signing Authority (“pouvoir de signature”).

        Agency: Jiro sy rano malagasy (JIRAMA)

        * The client obtains external inspection by Jiro sy rano malagasy
        (JIRAMA)

        When the utility has received the application, it inspects the client’s site
        to determine the specifics of the connection and prepare an estimate of         1 calendar day         MGA 0
   2
        the connection fees.

        Agency: Jiro sy rano malagasy (JIRAMA)

        The client obtains right of way from the local authority (Commune)

        The customer needs to obtain a right of way from the 'Commune' before
        paying the estimate so that the utility can carry out the external works of 50 calendar days         MGA 60,000
   3
        expanding the overhead network.

        Agency: Local authority (Commune)
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