Madagascar offers a very affordable cost of living, with a Cost of Living Index (CPI) of 24.1 (NYC = 100). Groceries (25.4) and restaurant prices (17.0) are notably low.

The housing market is very expensive relative to local incomes, with a property price to income ratio of 24.3 years. However, the rent index is very low at 7.2, indicating that renting is significantly more affordable than buying.

Purchasing power in Madagascar is low, with an index of 16.8 (NYC = 100), suggesting limited buying power for residents.

Madagascar has a progressive income tax (IRSA) ranging from 0% to 20% for income above MGA 600,000. The standard Value Added Tax (VAT) is 20%. Corporate income tax is generally 20% for larger businesses, with a 5% real estate ownership tax on rental value.

Madagascar is working to improve its business environment, encouraging foreign direct investment with 100% foreign ownership allowed in most sectors. However, challenges persist due to bureaucratic inefficiencies, corruption, and developing infrastructure.

Madagascar has a mandatory social security system (CNaPS) covering pensions, family benefits, and work accidents, alongside mandatory health insurance (OSTIE). However, public healthcare facilities are limited and underfunded, especially in rural areas. Unemployment protection is mainly severance pay, with no comprehensive unemployment insurance.

While Madagascar's banking sector is profitable and shows adequate capital ratios, explicit and quantified deposit insurance coverage is not readily available in recent public information. The country has made progress in Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) compliance. Banking penetration remains low.