Morocco
Executive Summary
Morocco enjoys political stability, robust infrastructure, and a strategic location, which have contributed to its emergence as a regional manufacturing and export base for international companies. Morocco is actively encouraging and facilitating foreign investment, particularly in export sectors like manufacturing, through macro-economic policies, trade liberalization, investment incentives, and structural reforms. Morocco’s overarching economic development plan seeks to transform the country into a regional business hub by leveraging its unique status as a multilingual, cosmopolitan nation situated at the tri-regional focal point of Sub-Saharan Africa, the Middle East, and Europe. In recent years, this strategy increasingly influenced Morocco’s relationship and role on the African continent. The Government of Morocco has implemented a series of strategies aimed at boosting employment, attracting foreign investment, and raising performance and output in key revenue-earning sectors, such as the automotive and aerospace industries.
Morocco attracts the fifth-most foreign direct investment (FDI) in Africa, a figure that increased 23 percent in 2017. As part of a government-wide strategy to strengthen its position as an African financial hub, Morocco offers incentives for firms that locate their regional headquarters in Morocco, such as the Casablanca Finance City (CFC), Morocco’s flagship financial and business hub launched in 2010. CFC intends to open a new, 28-story skyscraper in 2019, which will eventually house all CFC members. Morocco’s return to the African Union in January 2017 and the launch of the African Continental Free Trade Area (CFTA) in March 2018 provide Morocco further opportunities to promote foreign investment and trade and accelerate economic development. In late 2018, Morocco’s long-anticipated high-speed train began service connecting Casablanca, Rabat, and the port city of Tangier. Despite the significant improvements in its business environment and infrastructure, insufficient skilled labor, weak intellectual property rights (IPR) protections, inefficient government bureaucracy, and the slow pace of regulatory reform remain challenges for Morocco.
Morocco has ratified 69 bilateral investment treaties for the promotion and protection of investments and 60 economic agreements – including with the United States and most EU nations – that aim to eliminate the double taxation of income or gains. Morocco’s Free Trade Agreement (FTA) with the United States entered into force in 2006, eliminating tariffs on more than 95 percent of qualifying consumer and industrial goods. The Government of Morocco plans to phase out tariffs for a limited number of products through 2030. Since the U.S.-Morocco FTA came into effect, overall annual bilateral trade has increased by more than 250 percent, making the United States Morocco’s fourth largest trading partner. The U.S. is the second largest foreign investor in Morocco and the U.S. and Moroccan governments work closely to increase trade and investment through high-level consultations, bilateral dialogue, and the annual U.S.-Morocco Trade and Investment Forum, which provides a platform to strengthen business-to-business ties.
Table 1: Key Metrics and Rankings
| Measure | Year | Index/Rank | Website Address |
| TI Corruption Perceptions Index | 2018 | 73 of 180 | http://www.transparency.org/research/cpi/overview |
| World Bank’s Doing Business Report | 2019 | 60 of 190 | http://www.doingbusiness.org/en/rankings |
| Global Innovation Index | 2018 | 76 of 126 | https://www.globalinnovationindex.org/analysis-indicator |
| U.S. FDI in partner country ($M USD, stock positions) | 2017 | $412 | http://www.bea.gov/international/factsheet/ |
| World Bank GNI per capita | 2017 | $2,860 | http://data.worldbank.org/indicator/NY.GNP.PCAP.CD |
1. Openness To, and Restrictions Upon, Foreign Investment
Policies towards Foreign Direct Investment
Morocco actively encourages foreign investment through macro-economic policies, trade liberalization, structural reforms, infrastructure improvements, and incentives for investors. Law 18-95 of October 1995, constituting the Investment Charter, which can be found online at http://www.usa-morocco.org/Charte.htm , is the principal Moroccan text governing investment and applies to both domestic and foreign investment (direct and portfolio). Morocco’s 2014 Industrial Acceleration Plan, a new approach to industrial development based on establishing “ecosystems” that integrate value chains and supplier relationships between large companies and small and medium-sized enterprises (SMEs;), has guided Ministry of Industry policy for the last five years. The plan runs through 2020. Morocco’s Investment and Export Development Agency (AMDIE) is the primary agency responsible for the development and promotion of investments and exports. The Agency’s website aggregates relevant information for interested investors and includes investment maps, procedures for creating a business, production costs, applicable laws and regulations, and general business climate information, among other investment services. Further information about Morocco’s investment laws and procedures is available on AMDIE’s website at http://www.amdie.gov.ma/en/ . For further information on agricultural investments, visit the Agricultural Development Agency (ADA) website (http://www.ada.gov.ma/) or the National Agency for the Development of Aquaculture (ANDA) website (https://www.anda.gov.ma/ ).
Moroccan legislation governing FDI applies equally to Moroccan and foreign legal entities, with the exception of certain protected sectors.
When Morocco acceded to the OECD Declaration on International Investment and Multinational Enterprises in November 2009, Morocco guaranteed national treatment of foreign investors (i.e., according equal treatment for both foreign and national investors in like circumstances). The only exception to this national treatment of foreign investors is in those sectors closed to foreign investment (noted below), which Morocco delineated upon accession to the Declaration. Per a Moroccan notice published in 2014, the lead agency on adherence to the Declaration is AMDIE.
Limits on Foreign Control and Right to Private Ownership and Establishment
Foreign and domestic private entities may establish and own business enterprises, barring some sector restrictions. While the U.S. Mission is not aware of any economy-wide limits on foreign ownership, Morocco places a 49 percent cap on foreign investment in air and maritime transport companies and maritime fisheries. Morocco prohibits foreigners from owning agricultural land, though they can lease it for up to 99 years. The Moroccan government holds a monopoly on phosphate extraction through the 95 percent state-owned Office Cherifien des Phosphates (OCP). The Moroccan state also has a discretionary right to limit all foreign majority stakes in the capital of large national banks, but does not appear to have ever exercised that right. In the oil and gas sector, the National Agency for Hydrocarbons and Mines (ONHYM) retains a compulsory share of 25 percent of any exploration license or development permit. The Moroccan Central Bank (Bank Al-Maghrib) may use regulatory discretion in issuing authorizations for the establishment of domestic and foreign-owned banks. As set forth in the 1995 Investment Charter, there is no requirement for prior approval of FDI, and formalities related to investing in Morocco do not pose a meaningful barrier to investment. The U.S. Mission is not aware of instances in which the Moroccan government turned away foreign investors for national security, economic, or other national policy reasons. The U.S. Mission is not aware of any U.S. investors disadvantaged or singled out by ownership or control mechanisms, sector restrictions, or investment screening mechanisms, relative to other foreign investors.
Other Investment Policy Reviews
The World Trade Organization (WTO) 2016 Trade Policy Review (TPR) of Morocco found that the trade reforms implemented since the last TPR in 2009 have contributed to the economy’s continued growth by stimulating competition in domestic markets, encouraging innovation, creating new jobs, and contributing to growth diversification. The WTO 2016 TPR can be found at https://www.wto.org/english/tratop_e/tpr_e/tp429_e.htm . The U.S. Mission is not aware of any other investment policy reviews in the past three years.
Business Facilitation
In the World Bank’s 2019 Doing Business Report (http://www.doingbusiness.org/en/data/exploreeconomies/morocco ), Morocco ranks 60 out of 190 economies worldwide in terms of ease of doing business, rising nine places since the 2018 report. Since 2012, Morocco has implemented a number of reforms facilitating business registration, such as eliminating the need to file a declaration of business incorporation with the Ministry of Labor, reducing company registration fees, and eliminating minimum capital requirements for limited liability companies. Morocco maintains a business registration website that is accessible through the various Regional Investment Centers (CRI – Centre Regional d’Investissement at https://rabat.eregulations.org/procedure/4/7?l=fr). The business registration process is generally streamlined and clear.
Foreign companies may utilize the online business registration mechanism. Foreign companies, with the exception of French companies, are required to provide an apostilled Arabic translated copy of its articles of association and an extract of the registry of commerce in its country of origin. Moreover, foreign companies must report the incorporation of the subsidiary a posteriori to the Foreign Exchange Board (Office National de Change) to facilitate repatriation of funds abroad such as profits and dividends. According to the World Bank, the process of registering a business in Morocco takes an average of nine days (significantly less time than the Middle East and North Africa regional average of 21 days). Including all official fees and fees for legal and professional services, registration costs 3.7 percent of Morocco’s annual per capita income (significantly less than the region’s average of 22.6 percent). Moreover, Morocco does not require that the business owner deposit any paid-in minimum capital.
On December 11, 2018, the lower house of parliament adopted draft law 88-17 on the electronic creation of businesses. The final implementation decrees are expected to be ready by mid-2019. The new system will allow the creation of businesses online via an electronic platform managed by the Moroccan Office of Industrial and Commercial Property (OMPIC). Once launched, all procedures related to the creation, registration, and publication of company data will be required to be carried out via this platform. The creator of the company will be exempt from filing physical documents. A separate decree will determine the list of documents required during the electronic business creation process. A new national commission will monitor the implementation of the new procedures.
The business facilitation mechanisms provide for equitable treatment of women and underrepresented minorities in the economy. Notably, according to the World Bank, the length of time and cost to register a new business is equal for men and women in Morocco. The U.S. Mission is not aware of any special assistance provided to women and underrepresented minorities through the business registration mechanisms. In cooperation with the Moroccan government, civil society, and the private sector, there have been a number of initiatives aimed at improving gender quality in the workplace and access to the workplace for foreign migrants, particularly from sub-Saharan Africa.
Outward Investment
In 2017, Morocco’s FDI in Africa was USD 2.57 billion, representing a 12 percent increase over 2016. The African Development Bank ranks Morocco as the second biggest African investor in Sub-Saharan Africa, after South Africa, with up to 85 percent of Moroccan FDI going to the region. The U.S. Mission is not aware of a standalone outward investment promotion agency, though AMDIE’s mission includes supporting Moroccan exporters and investors seeking to invest outside of Morocco. Nor is the U.S. Mission aware of any restrictions for domestic investors attempting to invest abroad. However, under the Moroccan investment code, repatriation of funds is limited to convertible Moroccan Dirham accounts. Capital controls limit the ability of residents to convert dirham balances into foreign currency or to move funds offshore.