Why Invest in Morocco?

Since 1993, Morocco gets involved in a policy of privatization, aiming the consolidation of the private sector.

Actually, the Moroccan economy is characterized by its opening on the exterior world. As a matter of fact, several agreements of Partnership or free trade were signed.

Since the accession of His Majesty the King Mohammed VI, the pace of reforms has speeded up, and Morocco began a large program of development and economic growth.

His Majesty the King is the initiator of projects such as Tangier - Med Port, comprising logistic platforms, industrial and commercial free zones, railways, and connections to the motorway network. This emphasizes the opening of Morocco on foreign investors.

The investment code offers multiple advantages to international investors. The legal system adopted, the profitable measures introduced, the tax system, the labour code, the laws governing the financial services and the law relative to the privatization have all contributed to the encouragement of investments.

Therefore, the Moroccan economy has registered a growth rate of 6% in 2008 and reaches 5.5% in 2009. It is a positive indicator considering the economic and financial contexts.

Besides, the regions of Morocco and their economic profiles offer great potentialities. The key sectors of the economic activity are as follows: the emerging industries, the phosphate, the small and medium-sized enterprises, the projects of development of infrastructures and the tourism.

Furthermore, the climate of political, economic and financial stability, the important results that the country keeps on achieving and the exceptional relations that Morocco is maintaining with Europe have largely encouraged foreign operators to explore the wealth of this country.

In fact, numerous are the reasons, which have encouraged foreign investors to invest in Morocco. For further details, it is important to group them in two key factors:

Natural factors:

  • Diversified natural resources: in terms of fishing, mining and forestry development. Morocco is considered the third producer and the first world explorer of phosphate. It has a large number of mines, namely phosphate, coal, lead, silver, gold, zinc, copper, manganese, iron, fluorine, salt, gypsum, etc… Besides, its coasts count for several fishing ports of great importance, and include a considerable wealth as far as fishing is concerned. This has made from Morocco the most important producer and exporter of sea products in Africa and the Arab World
  • Diverse landscape: beaches, deserts, mountains, imperial cities allowing for whole year around activities
  • Beautiful sandy beaches
  • Fantastic climate, with over 320 days of sunshine annually
  • Multilingual: French, Spanish and English are widely spoken as well as traditional Arabic
  • Sight seeing - Costa del Sol is just 30 minutes away by hydrofoil from Tangier
  • Proximity of Tangier to Europe and the Middle East: 2 hours to Paris, 3 hours to London, 1 hour to Marbella and 10 hours to Doha; Tangier is also accessible via ferry

 
Economic Factors:

  • Tax incentives: foreign investors in the Real Estate benefit from a favourable convertibility system, which makes easier for them to:

    - Transfer, outside Morocco, the proceeds of sale of properties and the rental revenues, with no limit in time and amount

    - Transfer, outside Morocco, the net profit of the real estate sale. In addition to these advantages, the Finance Law provides for the simplification of administrative procedures relative to the carrying out of investments
  • The investors in the Real Estate benefit also from exemptions and reductions concerning the following taxes:


Exemptions from

- the urban tax during five years on all newly-constructed properties
-
the tax on property profits for the first sale of social housing
- the tax on property profits in case of sale of a building, used as a personal residence for (8) eight years, at least
- the trading licence tax during five years as from the start of the execution of a profession, an industry or a commerce
- the tax on building operations for social housing
-
the income tax of the rental revenues for (3) three years, following the completion of the newly-constructed buildings or properties


Reductions of:

- The registration fees: reduced to 2.5% (acquisition of premises for professional use or of lands)
-
The Value Added Tax (VAT): reduced to 14% for real estate works
  • Tax allowance of 40% for all retired persons; the ones, whose pension is of foreign origin, are entitled to an additional reduction of 80%, provided that they transfer to Morocco this pension (partially or fully) to an account in Dirhams
  • Non double taxation, in terms of the income tax, with United Arab Emirates, United Kingdom, United States of America, Canada, France, Germany, Spain, and Belgium
  • Inheritance Tax - none for family members
  • The property loan for non residents foreigners allows them to finance up to 70 % of their investment, and includes death insurance, disability insurance and housing insurance
  • Lower property prices (25-50% less than other European resorts)
  • Lower cost of living - experience a luxury lifestyle at little expense
  • Very low transaction cost of 6% only, versus 10-12% in Spain and other countries
  • Booming property market
  • Government incentives such as “Plan d’Azur Morocco 2010”, an initiative underwritten by the Ministry of Tourism who has poured €9M into the country hospitality’s infrastructure. By 2010, the program is expected to double Morocco’s total number of hotel beds to 230,000, increase tourism to 10 millions visitors by 2010 (2 millions in 2001) and create 600,000 new jobs. This would result in tourism contributing to 20% of the gross domestic product of the country
  • Current hotel capacity (in beds of ranked hotels) stands at 124,270 with an occupancy of 47% (Department of Investment)
  • Investors can also take advantage of a number of benefits pertaining to customs systems; the latter allows stocking, processing, using or circulation of goods, in suspension of duties and taxes, and exempts from the formalities of foreign trade and exchange system. By way of examples, we may quote: temporary admission, bonded warehouse, temporal export, transit, drawback, etc…
  • Export enterprises are exempt from the corporation tax and the income tax for a five-year period, after which there is a 50% reduction in these taxes
  • Capital goods, equipments, and tools acquired locally are exempt from the value added tax
  • Value added tax is not applied to products and services intended for export
  • Investments in Tangier free zone benefit from a total exemption from corporation tax for five years and a taxation at 8.75 % for the following 10 years
  • Non-discrimination between foreigners and nationals is guaranteed
  • In addition to tax incentives, large-scale investments (exceeding Dhs 200,000,000.00) are also exempt from import duties and value added tax on imported capital goods, equipments, and tools for activities that benefit regional development. In order to boost regional development, the State also assumes part of the cost for developing industrial zones
  • Access to the markets: ideally located, Morocco is a dynamic commercial crossroads between Africa and Europe. Aware of the importance of foreign trade in the Moroccan economy, Morocco has entered into commercial agreements with several countries in order to enable its products and services to have access to the international market
  • Free-market: Morocco adopts an economic policy that is based on the modernization of the economy. This results in signing international multilateral and bilateral agreements, ensuring the safety of commercial exchanges
  • Economic development and growth: Morocco aims to promote the growth of various sectors of activity. The key sectors may be defined as follows: industry, tourism, technologies of information and communication, craft, trade and housing
  • Human resources: Moroccan population is young and working. According to foreign investors, the labour productivity has reached a high level. Besides, Moroccans benefit from vocational training as far as services (technologies of information and communication, management, etc), civil engineering and industry (textile, car equipments, industrial mechanics, electricity and electronics) are concerned. Furthermore, Moroccan labour is competitive. This is shown in the legal duration of working hours in Morocco (44 hours per week), the number of days for paid holidays (18 days) and the actual guaranteed minimum wage (Dhs 55.12 per day in the agricultural sector  and Dhs 10.64 / hour in the sectors of industry, trade and professions)
  • Infrastructure:
    -
    Rail and road links connecting all major Moroccan cities
    -
    Major highway upgrades throughout the country
    -
    Speed TGV rail link between Tangier and Marrakech
  • Key developments:
    -
    Building of the largest commercial port of Europe: “Tangier - Med” to boost import and export
    -Potential building of tunnel connecting Spain/Gibraltar to Africa/Tangier (expected operation 2025)
  • Regeneration of Tangier City Centre:
    -
    Mr Mohammed Hassed, who has been responsible for the regeneration of Marrakech, has now been appointed by the His Majesty the King Mohamed VI to restore Tangier to what it was in the 1960's.

In short, all these factors have made from Morocco a model country, and a highly valued destination for investment, whose potential still remains to be exploited.

 

 

WHY INVEST IN MOROCCO?