The Moroccan government actively encourages foreign investment and has made a number of regulatory changes designed to improve the investment climate in recent years. Morocco welcomes foreign participation in its privatizations program and does not pre-screen or select foreign investment projects.
The October 1995 investment code applies equally to foreign and Moroccan investors with exception of foreign exchange provisions, which favour foreign investors. A special ministerial committee on investments presided by the Prime Minister was created in the beginning of 1999 to activate and ease implementation of investment projects.
The investment code also codifies the existing foreign exchange regulations providing essentially free repatriation of foreign exchange related to foreign investment. The code does not apply to agriculture ; foreign investment is now permitted in all sectors except agricultural land. Since independence, Morocco has worked diligently and assiduously to develop its commercial relations and partnerships by concluding both bilateral and multilateral accords. There are already agreements in place with 12 European countries, 10 African countries, 8 Asian countries, 5 American and 5 Arab nations, reinforcing various policies and initiating trade and investment.
WHY INVEST IN MOROCCO
| § Large scale projects: |
The state will partially subsidize the following:
•
Land acquisition costs
• Personnel training through a special investment promotion fund
|
| § Investment information and promotion agency: |
A special agency will be created to inform and to assist investors. The agency will also promote Morocco throughout the world. |
| § Customs tariff: |
import duty on machinery and equipment is set at 2.5% or 10%. |
| § Registration fees: |
Exemption from registration fees for land acquisition transactions for investment projects. A fee of 2.5% will be applied to land acquisition for urban real estate development. Capital registration fees are 0.5%. |
| § Income taxes: |
• IT maximum rate= 44%
• Full exemption for the first five years of operation and 50% reduction for the period beyond, apply to all expert oriented companies.
• A 50% exemption for the first five years of operations for companies that operate in less developed geographical zones and for crafts manufacturing companies. |
| § Investment exemptions: |
The maximum allowed exemption is 30% of the total project value and 20% of profits before taxes, considered deductible expenses. |
| § Patent Tax: |
Full exemption for the first five years. |
| § Foreign investment: |
Total transfer of profits after taxes without limitation as well as transfer of proceeds from sell offs and partial or full liquidation. |
| § VAT: |
Full exemption of the VAT on all equipment, materials and tools. |
| § Corporate taxes: |
Full exemption for the first five years and a 50% reduction of the tax for the period beyond will apply to exporting companies. A 50% reduction for the first five years for companies that operate in less developed geographical zones and for crafts manufacturing companies. |
Banking system
The Moroccan banking system is composed of Bank AL Maghrib, 15 commercial banks, several development banks and specialized financial institutions. The three largest banks account for over 63 percent of banking assets and deposits and cover 55 percent of credit.
Traditional commercial banking in Morocco has reached an advanced stage of maturity and sophistication. Moroccan banks offer a wide range of standard banking products. Several of them currently offer electronic banking services to their corporate clients and a wide array of consumer banking products including credit cards, automatic teller machines, and telephone banking. Most Moroccan banks are connected to the SWIFT global payment system allowing them quick execution of foreign currency transfers world-wide. Furthermore, banks are permitted to open foreign currency and convertible Dirham accounts to non resident individuals and companies.
They can also automatically repatriate earnings of foreign companies operating in the country. Through the assistance of commercial banks and special financial institutions, local financing is available to foreign investors on the same basis as to Moroccan companies.
In summary, there are several investor considerations:
• The banking network offers a wide range of services.
• Financing is available from semi- public and private institutions.
• Opportunities exist for long-term foreign investment. |
