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Stage 2 · Build a credible file · Lesson 4 of 4

Tax and social: what stops a disbursement

The funding is approved, the agreement is signed, and the money does not move. Often a tax or social security certificate is missing that nobody asked for in time.

KWritten by the KAPEX team from the conditions precedent seen in files across the region. Tax and social rules of Madagascar and Mauritius. Document titles, processing times and validity periods change: check them with the authority that issues the document. Updated 13 October 2026.

What stops the money

Before paying out, the funder checks a list of documents

A funding agreement ends with a list of things you must prove before the money is paid. Lawyers call them conditions precedent. While even one is missing, the disbursement, the day the funder pays the money out, waits.

In files across the region, these six documents appear on most lists. They are also the ones that cost the most weeks when they are left late.

None of these documents can be had overnight. Most have to be requested at a counter, waited for, and then they expire.

01
Tax clearance certificateIssued by the tax authority. It says you are up to date, or that a payment plan is running. Its validity period is written on it.
02
Social security certificateIssued by the body that collects contributions, the CNaPS in Madagascar. It says employee and employer contributions are paid.
03
Returns filed, even nil onesNot filing is a separate failing from not paying. It shows on the certificate, even if you owe nothing.
04
Employment contracts and staff registerAsked for mainly by development funders, who are themselves committed to social standards.
05
Permits and operating licencesEnvironment, health and safety, sector licence. The funder checks their expiry date, not just that they exist.
06
No tax dispute kept quietA tax audit under way does not prevent funding. An audit you did not mention, which the funder discovers, becomes a question of trust.

The law and the funder’s list

The law sets your obligations; the funder chooses the proof it asks for

Two things often get mixed up in talks with a funder. There is what the law requires of you, which applies to every business in the country. And there is what this funder has written into its contract, which applies only to its own deals.

What the law saysfor every business
  • File tax and contribution returns on the set dates, even when nothing is due.
  • Pay, or agree a payment plan with the authority.
  • If the business gets into difficulty, the state and the social security funds are paid before many other creditors.
The law does not say which certificate a funder must require, or how recent it must be.
What a funder asks forwritten into its contract
  • The list of documents, and how old each one may be.
  • Extra documents under its own policy: employment contracts, permits, environmental and social standards.
  • What it accepts if a balance is owed: a payment plan, a delay, or an undertaking to settle after payment.
Two funders, two lists. Yours is in the term sheet, then in the agreement.

General picture in Madagascar and Mauritius, October 2026. The exact ranking between creditors depends on the country and the asset: ask your adviser.

When a request surprises you, ask plainly: “Is this required by law, or by your policy?” A policy requirement can sometimes be discussed, especially the date or the form of the proof. A legal obligation that has not been met has to be put right; it is not something to negotiate with the funder.

  1. Why a lender cares
  2. What a certificate says
  3. Who issues what, in what order
  4. A holding company in Mauritius
  5. Are you up to date?
  6. Two weeks before disbursement
  7. In your file

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The words of this lesson

Each word links to its full definition in the glossary.

Condition precedent
A condition written into the agreement: until it is met (a document, an approval), the money is not paid out.
Disbursement
The moment the lender or investor actually pays the money into your account.
Preferred creditor
Someone the company owes money to whom the law pays before others (the state, employees, a secured lender).
GBC
A licensed Mauritian company that works mainly outside Mauritius and must prove it has a real presence there.
Substance
Proof that a company really lives where it is registered: local directors, a bank account, spending, meetings.
Holding company
A company that does nothing itself: it owns shares in other companies.

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