Jurisdiction & corridor analysis

Offshore investment routes into Africa.

Choose an African market to compare the inward direct investment reported by the receiving country with the positions reported by offshore jurisdictions.

Country summary: Madagascar

Madagascar is a frontier investment destination whose appeal rests on its underlying assets and substantial unmet demand, rather than on broad consumer spending. Mining, agribusiness and food processing, export textiles, telecommunications, renewable energy, tourism and transport infrastructure offer credible entry points for offshore capital. The strongest opportunities are generally export-oriented, import-substituting or supported by contracted revenues, because these models provide better protection against weak domestic purchasing power and currency depreciation. UNCTAD recorded approximately USD 413 million of FDI inflows in 2024, while the World Bank identifies private investment as an important driver of recent economic activity .

Madagascar nevertheless has to be underwritten asset by asset. Electricity reliability, port and road logistics, land tenure, regulatory execution and access to hard currency can materially increase capital expenditure and working-capital requirements. The political disruption of 2025 and the cyclones of early 2026 have added another layer of execution risk; the World Bank estimates that cyclones Fytia and Gezani caused damage equivalent to 3.4% of GDP. In corporate-finance terms, the most resilient investments are those with foreign-currency revenues, natural hedges, conservative leverage and sufficient liquidity to withstand delays in imports, construction or dividend conversion .

The legal framework is broadly open to foreign investment, subject to sector-specific restrictions. The 2023 Investment Law permits foreign capital contributions without prior investment approval and allows profits, dividends, royalties and management fees to be transferred abroad. Sale and liquidation proceeds are also transferable, although they must be declared to the Ministry of Finance, while certain other capital transactions require prior authorisation. Transfers must pass through authorised intermediaries in convertible currency. Consequently, the offshore structure should be established and documented from entry, with equity, shareholder loans, beneficial ownership and tax payments remaining fully traceable. The offshore vehicle finances and protects an investment located in Madagascar; Madagascar itself remains the investment destination .

Offshore-jurisdiction records (USD million)

What the offshore jurisdictions report

2022-2024
Ranked OFC202220232024
1MauritiusMUS · immediate counterpart
2United KingdomGBR · immediate counterpart
3LuxembourgLUX · immediate counterpart
01.3k01.3k01.3k

Source: IMF, Direct Investment Positions by Counterpart Economy (formerly CDIS). Data view: Derived using counterparty information — offshore jurisdictions. Dataset 12.0.1; observation period 2022-2024; retrieved 21 July 2026.

Method and comparability notes

Why the charts may differ: Countries can report the same investment differently because of timing, valuation methods, reporting thresholds, confidentiality and missing submissions. Neither chart identifies the ultimate investor.

Method: Corpfin total IDI equals the IMF net equity position plus IMF gross debt liabilities. The receiving country figures and the figures derived from reports by the selected offshore jurisdictions are ranked separately and are never merged. Blank annual value cells in returned IMF series are treated as zero; absent series and explicit IMF missing or suppressed markers remain unavailable. Differences between the two views can result from reporting asymmetry, and neither view identifies the ultimate investor or establishes that a structure is tax-driven.

Professional assessment

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Indicative comparison

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IDI corridor interpretation

IDI to Madagascar from OFCs

Interpretation based on the offshore-jurisdiction records.

OFC1

Mauritius

2024 position · USD 1,260.47 million

The offshore investment data for Madagascar reveal an exceptionally concentrated financing structure. Mauritius accounted for USD 1.260 billion in 2024, representing 99.9% of the three offshore positions shown in the chart. Its position increased from USD 1.013 billion in 2022 to USD 1.187 billion in 2023, before rising further in 2024. This cumulative increase of USD 247.40 million confirms that Mauritius is not simply the highest ranked jurisdiction. It is the principal offshore ownership and financing route into Madagascar.

This corridor is supported by real corporate relationships between the two countries. Mauritian groups hold significant investments in Malagasy telecommunications, banking, energy, textiles and other operating sectors. AXIAN Telecom, which is domiciled in Mauritius, holds 80.8 percent of Telecom Malagasy. Its audited accounts also show that its loan receivable from Telecom Malagasy increased from USD 22.63 million at the beginning of 2024 to USD 38.12 million at year end. In financial services, 51 percent of BNI Madagascar was held through Indian Ocean Financial Holdings Limited, a Mauritius registered company within the CIEL and AXIAN ownership structure. CIEL also holds several Malagasy textile businesses through its regional corporate structure. These examples show how investments in Malagasy operating companies can be legally held and financed through Mauritius. They do not, however, provide a complete breakdown of the USD 1.26 billion bilateral investment position or establish the contribution made by each corporate group .

The position also includes capital that may not have originated in Mauritius. International investors can establish a Mauritian holding company or investment fund before acquiring or financing a Malagasy business. NextSource Materials provides a clear example, with Mauritian companies positioned between its Canadian parent and its graphite operations in Madagascar. Mauritius therefore performs two roles. It is a source of genuine regional corporate capital, and it is the immediate holding jurisdiction through which investors from other countries deploy capital into Madagascar .

The increase between 2022 and 2024 should be interpreted as a deepening of existing Mauritian investment in Madagascar. It may reflect additional equity, shareholder loans, reinvested profits and changes in the valuation of existing businesses. It should not be treated as USD 247.40 million of new annual investment spending. The central conclusion is that Mauritius has become the installed corporate and financing channel for offshore investment into Madagascar. The corridor is supported by operating businesses and measurable financial relationships, rather than by passive company registrations alone .

OFC2

United Kingdom

2024 position · USD 1.25 million

The UK position shown as zero in 2022 and 2023 and USD 1.25 million in 2024 is too small to represent an established investment corridor. It is more consistent with one small direct investment, an intercompany balance, a residual position or a change in the residence or classification of an existing entity.

A UK entity is commercially sensible where the genuine sponsor is British, for example, a London-listed mining company or UK-based corporate group directly owning Malagasy subsidiaries. Tirupati Graphite’s accounts provide an example of direct UK ownership of Madagascar graphite operations. In that structure, the UK is the sponsor’s home jurisdiction, not a neutral tax or treaty platform .

The UK is less attractive for an inserted holding company because HMRC confirms that there is no UK-Madagascar double-taxation agreement, while UNCTAD lists no bilateral investment treaty between the two countries. The ESA-UK Economic Partnership Agreement provides trade and tariff benefits, but it does not replace a tax treaty or conventional investment-protection treaty. A British fund or parent may therefore sit above a Mauritius investment vehicle, in which case the IMF records Mauritius, not the UK, as Madagascar’s immediate counterparty .

OFC3

Luxembourg

2024 position · USD 0.06 million

Luxembourg’s USD 60,000 position is a residual balance, not an economically meaningful investment route. Luxembourg is commonly used to pool European institutional capital through alternative funds, partnerships and private-equity vehicles. Its natural role would therefore be higher in the ownership chain:

European investors → Luxembourg fund → Mauritius investment SPV → Malagasy operating company

Luxembourg does benefit from the Belgium-Luxembourg Economic Union investment treaty with Madagascar, which is in force and provides investment-protection rights. However, Madagascar does not appear in Luxembourg’s official list of tax treaties. Luxembourg therefore offers fund governance and potential investment protection, but not the Madagascar-specific withholding-tax treatment available through Mauritius. This explains why it may be relevant to the ultimate fund structure while remaining almost absent as the immediate investor .