Why Should You Invest in Morocco?

Salaheddine YatimManaging Partner, Upsilon Consulting

Over the last 20 years, Morocco has positioned itself as an emerging power in the world and as a key economic player on the African continent.

Through the establishment of modern infrastructure, sectoral strategies, high- speed industrialization, the development of green energy and the signing of several free trade agreements with major global economic players, Morocco has become a prominent player in continental and international policies.

Because Morocco has become competitive with neighboring nations, the country offers particularly attractive conditions for national and foreign investors.

Morocco currently ranks 53rd in the Doing Business Index with an average score of 73/100. Morocco improves its position every year. According to the report, the main challenge to improving this position is access to bank credit, which is rated 45/100. Over the past few years, Morocco has moved up to 24th place on the indicator of the most attractive tax systems.

Upsilon Consulting is a leading accounting and tax firm in morocco.

Creating a Company in Morocco is Easy

Foreigners can freely create companies in Morocco with minimal experience or local knowledge needed.

Interested investors must follow these steps:

  • Requesting a Negative Certificate (to secure their business name);
  • Drafting the Articles of Association;
  • Registration of Deeds;
  • Create and register deeds;
  • Registering for business taxes and obtaining the tax identifier, registration in the trade register, affiliation with the CNSS ;
  • Publication in the official bulletin and in the legal announcement journal.

You can complete these steps online using the digital services of the Regional Investment Centers (CRI).

Upsilon Consulting is a major partner. We offer a turnkey service for the creation of your company, from helping you choose your legal form to the final registration of your company.

The investor has the choice between a diversified range of companies: Partnership, Limited Liability Company (SARL), Public Limited Company (S.A.).


80% of companies incorporated in Morocco are in the form of a Limited Liability Company (SARL). This form is suitable in the case of private equity companies. The P.L.C. form is more suitable for large projects and especially when it is made public.

Legal domiciliation

The creation of a company requires the declaration of a registered office address (headquarter) in the articles of association and with the authorities.

In the absence of a physical address, a domiciliation consists in assigning a legal address to a company without the latter being physically located there.

This address will serve only for correspondence with administrations and third parties.

Legal Forms in Morocco – Comparison

The two legal forms you need to know are:

  • The Limited Liability Company (L.L.C.), commonly known in Morocco as Société à Responsabilité Limitée (S.A.R.L)
  • The Public Limited Company (P.L.C.), commonly known in Morocco as Société Anonyme (S.A.)
    The legal form SARL is the preferred form for investors in Morocco, especially for medium-sized companies (turnover < MAD 50 million).

Why choose the P.L.C. Form?

• Upsides

  • Enhanced protection of minority investors
  • Possibility of going public
  • Advanced governance (board of directors, supervisory board, etc.)

• Downsides

  • Minimum capital required (300.000 MAD of which 25% is release upon creation)
  • Minimum number of shareholders required: 5
  • Governed by a board of directors (3 members)
  • Complicated creation formalities
  • Obligation of having an external auditor

The S.A. is distinguished by a stricter legal framework to protect minority shareholders. There is also very little stopping you from transferring shares in the future. The S.A. is the only legal form authorized to make public offerings.

The S.A.R.L. is the easiest to implement. It is best suited for small or medium-sized companies with little or no divergence of interest in the capital.

Foreign Exchange Regime: Basic Rules

The foreign exchange regime for foreign investment in Morocco gives foreign (or non-resident) investors the option to convert their investments. It allows non- residents who have invested money in Morocco to recover their investments as well as the profits generated by them in their preferred currency.

To utilize the regime, you must prove the initial investment has been made in foreign currency (release of capital in foreign currency, payment of a current account in foreign currency, purchase of a foreign currency asset, etc.) Moroccan banks provide a certificate justifying the receipt of funds in foreign currency (called: Form 2).

The bank must provide all documents needed to prove the investment (debit notice, credit notice, etc.).

A foreign investment form is filed at the foreign exchange office. It provides the right of full convertibility to the investment.

This paper file provides a full guarantee to convert your investment.

Foreign Investors profit from:

Free Transfer of Dividends, Interest and Other Benefits

Freedom of Repayment of Loans Initially Made in Foreign Currencies

Free Transfer of Share Selling Profits

Possibility of Opening Accounts in Foreign Currency or Convertible Dirhams

Only the following can benefit from this regime:

• Foreign legal entities,
• Natural persons of foreign nationality (resident or non-resident) • Natural persons of Moroccan nationality residing abroad.

What’s Under the Regime’s Perview?

  • The creation of a company
  • Acquisition of existing companies
  • Acquisition of shares and subscription to a company’s capital increase
  • Current account advance
  • Acquisition of real estate
  • Granting of loans to a related company
  • Investment in the stock market or in financial instruments

Taxation System: Corporate Income Tax (CIT)

Corporate Income Tax

Corporate Income Tax (CIT) applies to the profits made by companies (except for partnerships, which are entitled to opt out of CIT.) It applies in particular to LLCs and public limited companies.
It is a tax established on a declarative basis.

Territoriality

This tax is obligatorily for companies with a registered office in Morocco. It may apply in certain cases to non-resident companies in respect of activities carried out in Morocco (e.g. branches of foreign companies).

Tax Base:

  • CIT is calculated on the basis of a taxable profit.
  • The tax result corresponds to the difference between income (revenue) and deductible expenses (operating costs).
  • Certain expenses may not be deductible (non-operating expenses, fines and penalties, expenses not justified by a regular document, donations, etc.).

Rates :

Net Income Amount (in MAD)Rate
Common LawIndustrial Companies (*)
Less than or equal to 300 00010 %10%
From 300 001 to 1 000 00020 %20%
Over 1 000 00031%28%

(*) Activity consisting of the direct manufacture or processing of movable tangible property by means of technical installations, materials and tools, the role of which is predominant.

Exemptions and Specific Rates

Some specific areas and activities benefit from incentives, including:

The progressive scale is capped at 20% for certain activities (export of goods and services, hotels and tourism, education and private education, handicrafts, agricultural activities, mining, etc.).

Companies with outsourcing operations (offshoring) benefit from a total exemption for 5 years followed by a reduced rate of 20% beyond this period;

Companies located in industrial acceleration zones benefit from a total exemption for 5 years followed by a 15% rate;

Zones established in Casablanca Finance City benefit from a total exemption for 5 years followed by a reduced rate of 15%.

Other specific exemptions may apply depending on the case.

Taxation System: IR on Salary and Social Security Contributions

IR on Salary

Salaries paid to employees are subject to IR tax. In Morocco, this tax is withheld. The employer is responsible for this tax burden.

In practice, salaries in Morocco are negotiated on a net basis, and the employer is responsible for calculating and withholding IR and Social Security contributions.

IR in Morocco is calculated based on gross taxable income. Net taxable income is the remuneration in cash and in kind less non-taxable items such as:

  • A discount for professional fees (usually 20%)
  • Social security contributions
  • Pension fund contributions
  • Family allowances and family assistance benefits
  • Professional expenses (representation, travel, etc.)

Other specific discounts include :

  • If the employee has dependents
  • If the employee’s housing loan is eligible for reduction

Each employer must prepare annual pay slips that trace calculations from the gross contractual salary to the net salary. The IR due must be remitted at the end of each month. An annual statement of wages paid must be submitted by the 28th of each month.

Don’t panic, Upsilon Consulting offers a turnkey service for managing payroll calculations and all necessary declarations.

Progressive IR Rate in Morocco

Annual Revenue (MAD)Taxation Rate
Less than 30 0000%
From 30 0001 to 50 00010 %
From 50 001 to 60 00020 %
From 60 001 to 80 00030 %
From 80 001 to 180 00034 %
Over 180 00038 %

Social Security Contributions

In addition to the salary IR that must be collected by the employer, you must also pay social security contributions. These contributions are subdivided into employer’s share and employee’s share (as salaries are generally negotiated on a net basis, both must be paid additionally by the employer).

The total CNSS & AMO contribution rate is around 27.83%:
• Total Employer Share : 21.09% (of which 8.98% calculated on an amount

capped at MAD 6,000, the remainder calculated on the gross salary without

ceiling)
• Total Employee Share : 6.74% (of which 4.48% calculated on an amount capped

at MAD 6,000, the remainder calculated on the gross salary without ceiling)

We offer custom simulations to ensure your calculations and systems are correct.

Read also : Layoffs in Morocco

Taxation System: Other Taxes Withholding Tax

Some special operations are subject to a withholding tax, including:

– Dividends distribution: When a Moroccan company distributes dividends to a Moroccan national or foreign partner, the latter is subject to a withholding tax at the rate of 15%.

This rate could be reduced under double tax treaties, for example :

  • France: Common law (15%)
  • Germany: this rate is reduced to 5% when the beneficiary is a company that

holds more than 25% of the capital; (15% in other cases)

  • Belgium: this rate is reduced to 6.5% when the beneficiary is a company that

holds more than 25% of the capital; (10% in other cases)

  • Netherlands: this rate is reduced to 10% when the beneficiary is a company that

holds more than 25% of the capital; (15% in other cases)

  • Spain: this rate is reduced to 10% when the beneficiary is a company that holds

more than 25% of the capital; (15% in other cases)

– Interest: Interest paid by a Moroccan company to a non-resident individual or legal entity is subject to a 20% withholding tax. This withholding tax is generally reduced to 10% when the country in question has a double taxation treaty with Morocco.
– Royalties: When a Moroccan company receives services from a non-resident company, payments made must be subject to withholding tax at a rate of 10%.

When there is a double taxation treaty:

  • This withholding tax is limited to royalty payments (payment for exploitation of rights).
  • This withholding tax may have a specific treatment according to what is provided for in the Double Taxation Treaty.

Local Taxes

In addition to the taxes and duties provided for in the General Tax Code, local taxes may apply, including:

Professional Tax (T.P.) :

  • Exemption for 5 years
  • Calculated at a rate of between 10% and 30% of the rental value of the premises and assets in operation.
  • Rental value = annual rents paid + 3% gross amount of fixed assets
  • Companies located in the industrial acceleration zone and agriculturalccompanies are exempt from P.T.

Municipal Service Tax:

  • Concerns companies in urban areas to cover the services provided by the municipality.
  • 10.5% of the rental value of the assets

Other Local Taxes: Other taxes apply to particular sectors and in particular cases :

  • Tourist tax: Hotel establishment (collected from customers)
  • Tourist promotion tax: Hotel establishment (collected from customers)
  • Beverage tax: Restaurants and hotels
  • Quarry products extraction tax
  • Land Subdivision Operations Tax
  • Urban Undeveloped Land Tax
  • Building tax
  • Passenger Public Transportation Tax