Investment Strategies and Foreign High-Net-Worth Individuals in Madagascar

The investment strategies of the diaspora and foreign high-net-worth individuals in Madagascar are based on a powerful three-pronged approach: luxury villas, well-located building plots, and direct or indirect participation in hotel projects. When well-structured, these three approaches allow for a combination of high rental income, capital appreciation, and exposure to the island’s tourism boom.

Context: Why Madagascar Attracts Large Investors

Madagascar offers a rare combination of low entry prices and high rental yields, particularly in Antananarivo and tourist hubs like Nosy Be and the East Coast. The development of tourism, relative stability, and the rise of projects like “New Tamatave” are strengthening the country’s appeal to the diaspora and wealthy European investors.

Some key figures:

• Gross rental yields can reach 10–12% on certain well-positioned assets (urban and tourist areas).
• The second-home market is experiencing strong growth, driven by tourist demand and the desire for a base in the Indian Ocean.

Purchase of luxury villas

The purchase of high-end villas aims for both personal use (second home) and cash flow generation through seasonal or corporate rentals. This type of property is primarily located in Antananarivo (premium neighborhoods) and in tourist coastal areas such as Nosy Be or newly developing coastal areas.

Typical strategy for a member of the diaspora/HNWI:

• Total budget: €250,000 to €600,000 for a villa with a view, swimming pool, and international amenities in a high-demand area.
• Target occupancy rate: 55-70% for well-managed tourist rentals in Nosy Be, with a target annual gross income of 8-12% of the purchase price.

Concrete example: a €350,000 villa in Nosy Be, rented for an average of €280 per night, with 60% occupancy, generates nearly €61,000 in gross income per year, before expenses and taxes. In the capital, a premium villa can be rented long-term to NGOs or international companies, with a more stable but less seasonal income.

Acquisition of building plots

Building plots represent the preferred investment opportunity for investors focused on capital appreciation rather than immediate cash flow. The most promising areas are:

• The rapidly expanding urban peripheries (residential projects organized around Antananarivo).
• Structured tourist waterfronts, such as those around Tamatave within the framework of projects like “New Tamatave.”

In the “New Tamatave” project, coastal land has already begun to see significant price increases, driven by modern residential demand and the anticipation of a future tourist hub. Serviced plots within a planned development benefit from added value compared to isolated plots, thanks to security, road infrastructure, and urban planning coherence.

Possible strategy:

• Purchase of several plots (for example, 3 to 5 parcels) in the same development, with a 7-10 year exit horizon.
• Resale of individual plots after development of the area or construction of a pilot villa to drive up prices.

Investment in Hotel Projects

For high-net-worth individuals (HNWIs) seeking more direct exposure to tourism, investment in hotel or related projects (resorts, ecolodges, condotels) is becoming a key option. Madagascar is gradually developing structured tourist zones where private capital is encouraged to finance high-end infrastructure and accommodations.

Forms of Investment:

• Acquiring a minority stake in a special purpose vehicle (SPV) that develops and operates a hotel or resort.
• Purchasing units in a “hotel residence” (villas or suites within a complex) with a shared rental pool and revenue sharing.

Example: For an investment of €300,000 to €1,000,000, an HNWI can co-finance an ecolodge or seaside resort project targeting an international clientele, with higher returns than traditional residential rentals, but also a higher operational risk. Projects well located on tourist corridors, with an experienced management team, are among the most resilient according to 2026 market analyses.

Legal Security and Structuring for Foreign Investors

Foreign investors (including the diaspora) cannot always hold full direct ownership of land, but secure solutions are available:

• Long-term emphyteutic leases (up to 99 years), registered and notarized, offering rights similar to ownership, with the possibility of resale.
• Creation of local special purpose vehicles (SPVs) to hold real estate assets, a structure widely used in large projects and hotel investments.

This framework, combined with relatively attractive taxation on high-end real estate, strengthens Madagascar’s competitiveness compared to other Indian Ocean destinations. For the diaspora, the advantage also lies in being able to combine a long-term asset-building project with family and cultural ties.

How to choose between villas, land, and hotels

In practice, a balanced portfolio for a high-net-worth individual (HNWI) or a member of the diaspora can include:

• 1-2 luxury villas (for personal use and rental income) in established areas such as Nosy Be or the premium neighborhoods of Antananarivo.
• A group of building plots in a growing residential development to capitalize on rising land values.

A minority stake in one or two well-positioned hotel or ecolodge projects to boost overall returns.

The key lies in the rigorous selection of locations, the quality of local partners, and a legal structure adapted to the status of a foreign investor or diaspora member. In this context, using specialized high-end real estate professionals in Madagascar helps reduce risks and transform an exotic opportunity into a solid and sustainable wealth management strategy.

For any inquiries, please contact Capmad Properties:

Tel: +261 38 11 971 02

Email: [email protected]

Capmad Media Group SA, DYVE GARDEN BUILDING, 101 Route du Pape – Anosivavaka, Antananarivo 101