Insight
Investing in Morocco: opportunities & incentives
June 2024
North-African Morocco is a country worth considering as a location for anyone looking to set up overseas. In 2010, Morocco established a National Committee for the Business Environment with the objective of improving Morocco’s position in the Ease-of-Doing-Business Index. From occupying 130th position in 2009, Morocco has climbed to 53rd place; this is a great success and testament to Morocco’s efforts to attract overseas investment.
Attracting foreign direct investment
Morocco is a liberal economy. Since 1993, Morocco has followed a policy of privatisation of previously state-owned industries and as the fifth largest African economy it is a major player in African economic affairs. Morocco’s Investment and Export Development Agency (AMDIE) is responsible for developing and promoting investments and exports. Each of Morocco’s twelve regions leads its own investment and promotion through a Regional Investment Centre (CRI). Each CRI website offers information for interested investors, including:
• investment maps
• priority sectors
• business set-up procedures
• production costs
• local laws and regulations
• general business climate information.
Morocco actively encourages foreign investment, offering incentives to attract investors. Further, the Moroccan government takes strategic steps to boost employment by attracting investment in high-revenue sectors such as:
• renewables
• automotive
• aerospace
• textiles
• pharmaceuticals
• outsourcing
• food and agriculture
Investing in Morocco
Investment in Morocco is often in the form of new companies, investment in existing companies, or opening agencies or branch offices. Since 2021 businesses can register online using a platform managed by the Moroccan Office of Industrial and Commercial Property (OMPIC). All the necessary procedures for creating and registering a company are possible on the platform. The process was simplified in law in 2020 and a new national commission will monitor the process.
Bilateral investment and taxation treaties
Morocco has held a bilateral investment treaty (BIT) with the US since 1991, and a free trade agreement (FTA) since 2006. Morocco also has BITs in force with 50 other countries, several FTAs, and association agreements most notably with the EU – a free-trade area that has liberalised two-way trade since 2012.
Taxation
Value added tax
Morocco operates a VAT regime with different rates for different products. Some businesses are exempt but typically will attract VAT at 20% on most products and services. The other rates applicable are 7%, 10% and 14%. Imports attract both VAT and a specific import tax – Parafiscal Import Tax (TPI). Customs duties are calculated on the ad valorem value of goods at the time they enter Morocco.
Corporate income tax
Businesses pay corporate income tax – Impôt sur les sociétés (IS) – on the difference between their trading income and expenditure. IS rates in 2024 range from 15% for businesses with taxable income of less than 300,000 Moroccan Dirham (MAD) to 33% for those with taxable income higher than 100 million MAD.
IS cannot be lower than 0.25% regardless of the level of taxable income but is not due in the first 36 months of trading if there is no taxable income.
Professionals
Professionals pay tax ranging from 10% to 30% based on fixed assets and the rental value of business premises. The rental value is capped at MAD 50m. Professionals are exempt from this tax during the first five years of trading.
Recruiting employees
Foreign investment is an important vehicle for local employment. Visas for overseas employees are conditional on there being no sufficiently qualified local employee available and only after the recruiting business has verified this with the National Agency for the Promotion of Employment and Competency (ANAPEC). If these conditions are met, obtaining and renewing visas and work permits can take up to six months.
Social security contributions are payable to the CNSS fund by both employers and employees.
Protecting intellectual property rights
The Moroccan Office of Industrial and Commercial Property (OMPIC) operates a registry of patents and trademarks for the industrial and commercial sectors. The Ministry of Youth, Culture, and Communication registers and protects copyrights for literary and artistic works, including software. It also works with Moroccan and international partners to combat piracy.
Money and the banking system
Morocco boasts a well developed banking sector including some of Africa’s largest banks as well as branches of major international banks. Attijariwafa is Morocco’s largest bank and the sixth-largest African bank with assets of $63bn in December 2021.
Foreign exchange and remittances
Any income from foreign investments can be transferred free of tax regardless of amount and without time limits. Capital payments in convertible currency, those made by debit of forward convertible accounts, and net capital gains can also be repatriated.
Investors transferring dividends, bonuses, or benefit shares must provide documentary evidence for the fiscal year in which the transfer takes place.
Climate issues
Morocco is keen to ensure that new economic initiatives consider all environmental, economic, and social impacts, manage the sustainability of natural resources, as well as promote environmentally friendly economic activities.
Morocco’s 2008 Plan Vert and subsequent Green Generation 2020-2030 national strategies commit to:
• increasing the use of renewables for energy
production
• removing subsidies on fossil fuels
• expanding employment in sustainable industries
• improving the management of Morocco’s water
and ocean resources.
In 2021 Morocco launched a Green Economy War Room, a collaboration between the Moroccan Agency for Energy Efficiency (AMEE) and the Ministry of Industry, Trade, and the Digital and Green Economy. This collaboration aims to support more than 150 sustainable investment projects.
Morocco’s well-developed economy offers many opportunities for businesses looking to invest overseas. However, it is important to first seek professional advice from local experts.
About the authors
Dr Issam El Maguiri
Casablanca, Morocco
Issam is the Managing Partner at El Maguiri & Associés, the Moroccan member firm of Russell Bedford International.
A senior tax and legal advisor, he was president of the Moroccan Order of Chartered Accountants from 2017 to 2020 and was elected as its honorary president from 2020 to 2023. He is also a member of the Moroccan National Tax Appeals Commission.
Issam is the appointed auditor and tax advisor to companies in various business sectors. He also teaches management, accounting and tax.
Soumia Benali
Casablanca, Morocco
Soumia is the Office Manager at El Maguiri & Associés.
She joined the firm in 2013 after obtaining her master’s degree in Business Management. She spent her initial years at the firm carrying out audit assignments and assisting clients with their accounts, before becoming manager of the accounting department.
She is also a specialist in labour law and provides clients with legal and employment advice.