FATF status

Madagascar is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The latest follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Madagascar was undertaken in 2024. According to the follow-up Evaluation, Madagascar was deemed Compliant for 9 and Largely Compliant for 14 of the FATF 40 Recommendations. It remains Highly effective for 0 and Substantially Effective 0 of the Effectiveness ratings.

Madagascar has seen an increase in corruption, ranking 145 out of 180 countries according to the 2023 Transparency International Corruption Perceptions Index. Key areas affected include the judiciary, police, and mining industry, with high-level officials often evading accountability due to cronyism and impunity. Despite the establishment of various anti-corruption agencies, U.S. companies report that corruption remains a significant barrier to foreign direct investment, particularly in public procurement and licensing.

Madagascar's economy is characterized by a young and growing workforce alongside abundant natural resources, particularly critical minerals. Key sectors include textiles, mining, energy, and telecommunications, but the investment climate is perceived as challenging due to widespread corruption and regulatory hurdles, despite laws allowing for 100 percent foreign ownership of businesses.

Madagascar's investment climate is characterized by a welcoming stance towards foreign direct investment (FDI), yet it presents significant challenges, including widespread corruption and bureaucratic inefficiencies. Despite laws allowing 100 percent foreign ownership, companies often face additional regulatory hurdles, particularly when lacking local partners, and report delays in government approvals. The recent decline in FDI as a percentage of GDP, alongside new taxes and regulations, further complicates the investment landscape.