Guide · April 8, 2026 · 11 min read
Producing in Madagascar isn't just about competitive costs and artisanal craftsmanship—it's also about accessing trade agreements that significantly reduce your import costs. AGOA, EPA, SADC: this guide explains concretely how these agreements benefit your brand and how much you can save.
AGOA – Access to the US Market. The African Growth and Opportunity Act (AGOA) allows textile products made in Madagascar to enter the United States duty-free. For an American brand, this represents a saving of 15-32% on import duties compared to Asia.
ACP-EU / EPA – European Market. The interim Economic Partnership Agreement (EPA) offers preferential tariff conditions for Malagasy exports to Europe. Combined with GSP+ (Generalised Scheme of Preferences), customs duties on children's clothing are reduced or nil.
SADC – Southern Africa. The Southern African Development Community brings together 16 Southern African countries. Madagascar is a member, which facilitates regional trade with South Africa, Tanzania, or Mozambique.
Free Zone – Tax Advantages. Companies in the free zone benefit from tax exemptions on profits, 0% VAT on inputs and exports, and simplified customs procedures. LOI Confection has been operating under this regime since 1995.
To illustrate the impact, let's take the example of an embroidered cotton children's dress, with an FOB Madagascar price of €12:
| Item | From Asia | From Madagascar |
|---|---|---|
| FOB Price | €10 | €12 |
| Sea Freight | €1.50 | €1.20 |
| EU Customs Duties | €1.38 (12%) | €0 (EPA) |
| Landed Cost | €12.88 | €13.20 |
| Hand embroidery included? | ❌ No | ✅ Yes |
The landed cost is almost equivalent, but the Malagasy piece includes hand embroidery—a finish impossible to obtain at the same price in Asia. For American brands, the AGOA advantage (0% duties vs. 15-32% from Asia) makes Madagascar significantly cheaper.
The AGOA (African Growth and Opportunity Act) is probably the most significant advantage for brands exporting to the United States. US textile customs duties are among the highest in the world: 15% to 32% depending on the type of garment (dresses and shirts are in the high range).
With AGOA, these duties drop to 0%. On a 20' container of children's dresses (value $80,000), the saving is $12,000 to $25,000 per shipment. This is a massive competitive advantage that neither China, Bangladesh, nor Vietnam can offer.
For European brands, the interim Economic Partnership Agreement (EPA) between Madagascar and the EU offers reduced or zero customs duties on most textile products. The condition: respecting the rules of origin, meaning that the substantial transformation (minimum cutting + sewing) must be carried out in Madagascar.
By combining the EPA with competitive production costs and short sea transit times (25 days vs. 35-40 from Asia), Madagascar offers a particularly attractive quality-price-lead time ratio for textile subcontracting brands.
Companies in Madagascar's free zone benefit from advantageous tax conditions: exemption from income tax during the first years of operation, 0% VAT on imported raw materials and exported products, and accelerated customs procedures (customs clearance within 24-48h).
LOI Confection has been operating under the free zone regime since its creation in 1995. This 30-year history ensures perfect mastery of procedures and documents: certificates of origin (EUR.1, Form A), packing lists, bills of lading, phytosanitary certificates.
Yes, Madagascar has been eligible for AGOA since its reinstatement in 2014. The agreement is periodically renewed by the US Congress. Companies in the free zone, like LOI Confection, benefit from duty-free access for textile products that meet the rules of origin (substantial manufacturing in Madagascar).
The certificate of origin is issued by the Malagasy customs authorities (Ministry of Commerce) after verifying that the substantial transformation was carried out in Madagascar. An integrated transit office at the manufacturer's facility facilitates these administrative procedures and ensures that each shipment is accompanied by the required documents.
Under AGOA, most textile products and clothing are eligible (chapters 61-63 of the Harmonized System). The conditions include that the garment assembly (cutting, sewing, finishing) is done in Madagascar. Under the EPA/EU, the rules of origin require a double transformation (weaving + garment assembly, or dyeing + garment assembly).
For a brand exporting to the USA, the AGOA saving is 15-32% on customs duties (depending on the garment type). To the EU with the EPA, the saving is 8-12%. Combined with competitive production costs and the tax advantages of the free zone, the total landed cost can be 30-50% lower than production in Europe for equivalent quality.