Morocco enjoys political stability, a geographically strategic location, and robust infrastructure, which have contributed to its emergence as a regional manufacturing and export base for international companies. Morocco actively encourages and facilitates foreign investment, particularly in export sectors like manufacturing, through positive 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. The Government of Morocco implements 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 continues to make major investments in renewable energy, boasting a 4 GW current capacity, 5 GW under construction, and an additional 6 GW in the planning phase.
According to the United Nations Conference on Trade and Development’s (UNCTAD) , Morocco attracted the eighth most foreign direct investment (FDI) in Africa. Following a record year in 2018 where Morocco attracted $3.6 billion in FDI, inbound FDI dropped by 55 percent to $1.6 billion in 2019. Despite the global COVID-19 pandemic, FDI inflows to Morocco remained largely stable totaling $1.7 billion in 2020, according to the Moroccan Foreign Exchange Office, a slight increase of one percent from the previous year. France, the UAE, and Spain hold a majority of FDI stocks. Manufacturing has the highest share of FDI stocks, followed by real estate, trade, tourism, and transportation. Morocco continues to orient itself as the “gateway to Africa” for international investors following Morocco’s return to the African Union in January 2017 and the launch of the African Continental Free Trade Area (CFTA) in March 2018, which entered into force in 2021. In June 2019, Morocco opened an extension of the Tangier-Med commercial shipping port, making it the largest in the Mediterranean and the largest in Africa. Tangier is connected to Morocco’s political capital in Rabat and commercial hub in Casablanca by Africa’s first high-speed train service. Morocco continues to climb in the World Bank’s Doing Business index, rising to 53rd place in 2020, rising on the list by 75 places over the last decade. Despite the significant improvements in its business environment and infrastructure, high rates of unemployment, weak intellectual property rights protections, inefficient government bureaucracy, and the slow pace of regulatory reform remain challenges.
Morocco has ratified 72 investment treaties for the promotion and protection of investments and 62 economic agreements – including with the United States and most EU nations – that aim to eliminate the double taxation of income or gains. Morocco is the only country on the African continent with a Free Trade Agreement (FTA) with the United States, eliminating tariffs on more than 95 percent of qualifying consumer and industrial goods. The Government of Morocco plans to phase out tariffs for some products through 2030. The FTA supports Morocco’s goals to develop as a regional financial and trade hub, providing opportunities for the localization of services and the finishing and re-export of goods to markets in Africa, Europe, and the Middle East. Since the U.S.-Morocco FTA came into effect bilateral trade in goods has grown nearly five-fold. The U.S. and Moroccan governments work closely to increase trade and investment through high-level consultations, bilateral dialogue, and other forums to inform U.S. businesses of investment opportunities and strengthen business-to-business ties.
|TI Corruption Perceptions Index||2020||86 of 180||http://www.transparency.org/research/cpi/overview|
|World Bank’s Doing Business Report||2020||53 of 190||http://www.doingbusiness.org/en/rankings|
|Global Innovation Index||2020||75 of 131||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country ($M USD, historical stock positions)||2019||$406||https://apps.bea.gov/international/factsheet/|
|World Bank GNI per capita||2019||$3,190||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. , is the foundational Moroccan text governing investment and applies to both domestic and foreign investment (direct and portfolio). The Ministry of Industry recently announced the second Industrial Acceleration Plan (PAI) to run from 2021-2025, which aims to build on the progress made in the previous 2014-2020 PAI and expand industrial development throughout all Moroccan regions. The PAI is based on establishing “ecosystems” that integrate value chains and supplier relationships between large companies and small- and medium-sized enterprises. Moroccan legislation governing FDI applies equally to Moroccan and foreign legal entities, with the exception of certain protected sectors.
Morocco’s Investment and Export Development Agency (AMDIE) is the national agency responsible for the development and promotion of investments and exports. Following the reform to the governing the country’s Regional Investment Centers (CRIs) in 2019, each of the 12 regions is empowered to lead their own investment promotion efforts. The CRI aggregate relevant information for interested investors and include investment maps, procedures for creating a business, production costs, applicable laws and regulations, and general business climate information, among other investment services. The websites vary by region, with some functioning better than others. AMDIE and the 12 CRIs work together throughout the phases of investment at the national and regional level. For example, AMDIE and the CRIs coordinate contact between investors and partners. Regional investment commissions examine investment applications and send recommendations to AMDIE. The inter-ministerial investment committee, for which AMDIE acts as the secretariat, approves any investment agreement or contract which requires financial contribution from the government. AMDIE also provides an “after care” service to support investments and assist in resolving issues that may arise.
Further information about Morocco’s investment laws and procedures is available on AMDIE’s newly launched or through the individual websites of each of the CRIs. For information on agricultural investments, visit the Agricultural Development Agency or the National Agency for the Development of Aquaculture .
When Morocco acceded to the OECD Declaration on International Investment and Multinational Enterprises in November 2009, Morocco guaranteed national treatment of foreign investors. 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. The National Contact Point for Responsible Business Conduct ( ), whose presidency and secretariat are held by AMDIE, is the lead agency responsible for the adherence to this declaration.
Limits on Foreign Control and Right to Private Ownership and Establishment
Foreign and domestic private entities may establish and own business enterprises, barring certain restrictions by sector. While the U.S. Mission is unaware 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 currently prohibits foreigners from owning agricultural land, though they can lease it for up to 99 years; however, new regulation to open agricultural land to foreign ownership is forthcoming. 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 apparently has never exercised that right. The Moroccan Central Bank (Bank Al-Maghrib) may use regulatory discretion in issuing authorizations for the establishment of domestic and foreign-owned banks. 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. As established 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 refused foreign investors for national security, economic, or other national policy reasons, nor is it 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 last third-party investment policy review of Morocco was the (TPR), which found that the trade reforms implemented since the prior TPR in 2009 contributed to the economy’s continued growth by stimulating competition in domestic markets, encouraging innovation, creating new jobs, and contributing to growth diversification.
In the World Bank’s , Morocco ranks 53 out of 190 economies, rising seven places since the 2019 report. Since 2012, Morocco has implemented reforms that facilitate 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 ).
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 their 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 Office (Office de Changes) 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 than the Middle East and North Africa regional average of 20 days. Morocco does not require that the business owner deposit any paid-in minimum capital.
In January 2019, the electronic creation of businesses law was published, but as of April 2021 the new process is not yet operational. The new system will allow for the creation of businesses online via an electronic platform managed by the Moroccan Office of Industrial and Commercial Property (OMPIC). All procedures related to the creation, registration, and publication of company data will be carried out via this platform, which is expected to launch by the end of 2021. A new national commission will monitor the implementation of the procedures. The Simplification of Administrative Procedures Law 55-19, passed in 2020, aims to streamline administrative processes by identifying and standardizing document requirements, eliminating unnecessary steps, and making the process fully digital via the National Administration Portal, which is expected to launch in Spring 2021.
The business facilitation mechanisms provide for equitable treatment of women and underrepresented minorities in the economy. Notably, according to the World Bank, the procedure, length of time, and cost to register a new business is equal for men and women in Morocco. The U.S. Mission is unaware of any official 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 several initiatives aimed at improving gender quality in the workplace and access to the workplace for foreign migrants, particularly those from sub-Saharan Africa.
The Government of Morocco prioritizes investment in Africa. The African Development Bank ranks Morocco as the second biggest African investor in Sub-Saharan Africa, after South Africa, and the largest African investor in West Africa. According to the Department of Studies and Financial Forecasts, under the Ministry of Economy, Finance, and Administration Reform, $640 million, or 47 percent of Morocco’s total outward FDI, was invested in the African continent in 2019. The U.S. Mission is not aware of a standalone outward investment promotion agency, although AMDIE’s mission includes supporting Moroccans seeking to invest outside of the country for the purpose of boosting Moroccan exports. 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. Morocco’s Foreign Exchange Office (“Office des Changes,” OC) implemented several changes for 2020 that slightly liberalize the country’s foreign exchange regulations. Moroccans going abroad for tourism can now exchange up to $4,700 in foreign currency per year, with the possibility to attain further allowances indexed to their income tax filings. Business travelers can also obtain larger amounts of foreign currency, provided their company has properly filed and paid corporate income taxes. Another new provision permits banks to use foreign currency accounts to finance investments in Morocco’s Industrial Acceleration Zones.
3. Legal Regime
Transparency of the Regulatory System
Morocco is a constitutional monarchy with an elected parliament and a mixed legal system of civil law based primarily on French law, with some influences from Islamic law. Legislative acts are subject to judicial review by the Constitutional Court excluding royal decrees (Dahirs) issued by the King, which have the force of law. Legislative power in Morocco is vested in both the government and the two chambers of Parliament, the Chamber of Representatives (Majlis Al-Nuwab) and the Chamber of Councilors (Majlis Al Mustashareen). The principal sources of commercial legislation in Morocco are the Code of Obligations and Contracts of 1913 and Law No. 15-95 establishing the Commercial Code. The Competition Council and the National Authority for Detecting, Preventing, and Fighting Corruption (INPPLC) have responsibility for improving public governance and advocating for further market liberalization. All levels of regulations exist (local, state, national, and supra-national). The most relevant regulations for foreign businesses depend on the sector in question. Ministries develop their own regulations and draft laws, including those related to investment, through their administrative departments, with approval by the respective minister. Each regulation and draft law is made available for public comment. Key regulatory actions are published in their entirety in Arabic and usually French in the official bulletin on the website of the General Secretariat of the Government. Once published, the law is final. Public enterprises and establishments can adopt their own specific regulations provided they comply with regulations regarding competition and transparency.
Morocco’s regulatory enforcement mechanisms depend on the sector in question, and enforcement is legally reviewable. The National Telecommunications Regulatory Agency (ANRT), for example, is the public body responsible for the control and regulation of the telecommunications sector. The agency regulates telecommunications by participating in the development of the legislative and regulatory framework. Morocco does not have specific regulatory impact assessment guidelines, nor are impact assessments required by law. Morocco does not have a specialized government body tasked with reviewing and monitoring regulatory impact assessments conducted by other individual agencies or government bodies.
The U.S. Mission is not aware of any informal regulatory processes managed by nongovernmental organizations or private sector associations. The Moroccan Ministry of Finance posts quarterly statistics (compiled in accordance with IMF recommendations) on public finance and debt on their website. A report on public debt is published on the Ministry of Economy and Finance’s website and is used as part of the budget bill formulation and voting processes. The fiscal year 2021 debt report was published on December 18, 2020.
International Regulatory Considerations
Morocco joined the WTO in 1995 and reports technical regulations that could affect trade with other member countries to the WTO. Morocco is a signatory to the Trade Facilitation Agreement and has a 91.2 percent implementation rate of TFA requirements. European standards are widely referenced in Morocco’s regulatory system. In some cases, U.S. or international standards, guidelines, and recommendations are also accepted.
Legal System and Judicial Independence
The Moroccan legal system is a hybrid of civil law (French system) and some Islamic law, regulated by the Decree of Obligations and Contracts of 1913 as amended, the 1996 Code of Commerce, and Law No. 53-95 on Commercial Courts. These courts also have sole competence to entertain industrial property disputes, as provided for in Law No. 17-97 on the Protection of Industrial Property, irrespective of the legal status of the parties. According to the European Bank for Reconstruction and Development’s 2015 Morocco Commercial Law Assessment Report , Royal Decree No. 1-97-65 (1997) established commercial court jurisdiction over commercial cases including insolvency. Although this led to some improvement in the handling of commercial disputes, the lack of training for judges on general commercial matters remains a key challenge to effective commercial dispute resolution in the country. In general, litigation procedures are time consuming and resource-intensive, and there is no legal requirement with respect to case publishing. Disputes may be brought before one of eight Commercial Courts located in Morocco’s main cities and one of three Commercial Courts of Appeal located in Casablanca, Fes, and Marrakech. There are other special courts such as the Military and Administrative Courts. Title VII of the Constitution provides that the judiciary shall be independent from the legislative and executive branches of government. The 2011 Constitution also authorized the creation of the Supreme Judicial Council, headed by the King, which has the authority to hire, dismiss, and promote judges. Enforcement actions are appealable at the Courts of Appeal, which hear appeals against decisions from the court of first instance.
Laws and Regulations on Foreign Direct Investment
The principal sources of commercial legislation in Morocco are the 1913 Royal Decree of Obligations and Contracts, as amended; Law No. 18-95 that established the 1995 Investment Charter; the 1996 Code of Commerce; and Law No. 53-95 on Commercial Courts. These courts have sole competence to hear industrial property disputes, as provided for in Law No. 17-97 on the Protection of Industrial Property, irrespective of the legal status of the parties. Morocco’s CRIs and AMDIE provide users with various investment-related information on key sectors, procedural information, calls for tenders, and resources for business creation. Their websites are infrequently updated.
Competition and Antitrust Laws
Morocco’s Competition Law No. 06-99 on Free Pricing and Competition outlines the authority of the Competition Council as an independent executive body with investigatory powers. Together with the INPPLC, the Competition Council is one of the main actors charged with improving public governance and advocating for further market liberalization. Law No. 20-13, adopted on August 7, 2014, amended the powers of the Competition Council to bring them in line with the 2011 Constitution. The Competition Council’s responsibilities include making decisions on anti-competition practices and controlling concentrations, with powers of investigation and sanction; providing opinions in official consultations by government authorities; and publishing reviews and studies on the state of competition.
In February 2020, the Moroccan telecommunications regulator, National Telecommunications Regulatory Agency (ANRT), issued a $340 million fine against Maroc Telecom for abusing its dominant position in the market. Maroc Telecom is majority owned by Etisalat, based in the United Arab Emirates (UAE), and is minority owned by the Moroccan government. ANRT ruled in favor of rival telecoms operator INWI, which is majority-owned by Morocco’s royal holding company and is minority-owned by Kuwait’s sovereign wealth fund and a private Kuwaiti company, which had filed the complaint with ANRT.
Following reported mishandling of an investigation into the alleged collusion by oil distribution companies, King Mohammed VI convened an ad hoc committee to investigate the Competition Council’s dysfunctions. In March 2021, the king appointed a new council president, and parliament adopted a new bill strengthening the Competition Council by improving its legal framework and increasing transparency.
Expropriation and Compensation
Expropriation may only occur in the public interest for public use by a state entity, although in the past, private entities that are public service “concessionaires” mixed economy companies, or general interest companies have also been granted expropriation rights. Article 3 of Law No. 7-81 (May 1982) on expropriation, the associated Royal Decree of May 6, 1982, and Decree No. 2-82-328 of April 16, 1983 regulate government authority to expropriate property. The process of expropriation has two phases: in the administrative phase, the State declares public interest in expropriating specific land and verifies ownership, titles, and appraised value of the land. If the State and owner can come to agreement on the value, the expropriation is complete. If the owner appeals, the judicial phase begins, whereby the property is taken, a judge oversees the transfer of the property, and payment compensation is made to the owner based on the judgment. The U.S. Mission is not aware of any recent, confirmed instances of private property being expropriated for other than public purposes (eminent domain), or in a manner that is discriminatory or not in accordance with established principles of international law.
ICSID Convention and New York Convention
Morocco is a member of the International Center for Settlement of Investment Disputes (ICSID) and signed its convention in June 1967. Morocco is a party to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards. Law No. 08-05 provides for enforcement of awards made under these conventions.
Investor-State Dispute Settlement
Morocco is signatory to over 70 bilateral treaties recognizing binding international arbitration of trade disputes, including one with the United States. Law No. 08-05 established a system of conventional arbitration and mediation, while allowing parties to apply the Code of Civil Procedure in their dispute resolution. Foreign investors commonly rely on international arbitration to resolve contractual disputes. Commercial courts recognize and enforce foreign arbitration awards. Generally, investor rights are backed by a transparent, impartial procedure for dispute settlement. There have been no claims brought by foreign investors under the investment chapter of the U.S.-Morocco Free Trade Agreement since it came into effect in 2006. The U.S. Mission is not aware of any investment disputes over the last year involving U.S. investors.
Morocco officially recognizes foreign arbitration awards issued against the government. Domestic arbitration awards are also enforceable subject to an enforcement order issued by the President of the Commercial Court, who verifies that no elements of the award violate public order or the defense rights of the parties. As Morocco is a member of the New York Convention, international awards are also enforceable in accordance with the provisions of the convention. Morocco is also a member of the Washington Convention for the International Centre for Settlement of Investment Disputes (ICSID), and as such agrees to enforce and uphold ICSID arbitral awards. The U.S. Mission is not aware of extrajudicial action against foreign investors.
International Commercial Arbitration and Foreign Courts
Morocco has a national commission on Alternative Dispute Resolution with a mandate to regulate mediation training centers and develop mediator certification systems. Morocco seeks to position itself as a regional center for arbitration in Africa, but the capacity of local courts remains a limiting factor. To remedy this shortcoming, the Moroccan government established the Center of Arbitration and Mediation in Rabat, and the Casablanca Finance City Authority established the Casablanca International Mediation and Arbitration Center, which now see a majority of investment disputes. The U.S. Mission is aware of several investment disputes and has advocated on behalf of U.S. companies to resolve the disputes.
Morocco’s bankruptcy law is based on French law. Commercial courts have jurisdiction over all cases related to insolvency, as set forth in Royal Decree No. 1-97-65 (1997). The Commercial Court in the debtor’s place of business holds jurisdiction in insolvency cases. The law gives secured debtors priority claim on assets and proceeds over unsecured debtors, who in turn have priority over equity shareholders. Bankruptcy is not criminalized. The World Bank’s 2020 Doing Business report ranked Morocco 73 out of 190 economies in “Resolving Insolvency”. The GOM revised the national insolvency code in March of 2018, but further reform is needed.
5. Protection of Property Rights
Morocco permits foreign individuals and foreign companies to own land, except agricultural land. Recently passed Land Reform bill 62-19, which will open rural land acquisition to joint ventures and limited partnerships, is awaiting implementation. Foreigners may acquire agricultural land to carry out an investment or other economic project that is not agricultural in nature, subject to first obtaining a certificate of non-agricultural use from the authorities. Morocco has a formal registration system maintained by the National Agency for Real Estate Conservation, Property Registries, and Cartography (ANCFCC), which issues titles of land ownership. Approximately 30 percent of land is registered in the formal system, and almost all of that is in urban areas. In addition to the formal registration system, there are customary documents called moulkiya issued by traditional notaries called adouls. While not providing the same level of certainty as a title, a moulkiya can provide some level of security of ownership. Morocco also recognizes prescriptive rights whereby an occupant of a land under the moulkiya system (not lands duly registered with ANCFCC) can establish ownership of that land upon fulfillment of all the legal requirements, including occupation of the land for a certain period (10 years if the occupant and the landlord are not related and 40 years if the occupant is a family member). There are other specific legal regimes applicable to some types of lands, among which:
- Collective lands: lands which are owned collectively by some tribes, whose members only benefit from rights of usufruct;
- Public lands: lands which are owned by the Moroccan State;
- Guich lands: lands which are owned by the Moroccan State, but whose usufruct rights are vested upon some tribes;
- Habous lands: lands which are owned by a party (the State, a certain family, a religious or charity organization, etc.) subsequent to a donation, and the usufruct rights of which are vested upon such party (usually with the obligation to allocate the proceeds to a specific use or to use the property in a certain way).
Morocco’s rating for “Registering Property” regressed over the past year, with a ranking of 81 out of 190 countries worldwide in the World Bank’s Doing Business 2020 report. Despite reducing the time it takes to obtain a non-encumbrance certificate, Morocco made property registration less transparent by not publishing statistics on the number of property transactions and land disputes for the previous calendar year, resulting in a lower score than in 2019.
Intellectual Property Rights
The Ministry of Industry, Trade, Investment, and the Digital Economy oversees the Moroccan Office of Industrial and Commercial Property (OMPIC), which serves as a registry for patents and trademarks in the industrial and commercial sectors. The Ministry of Communications oversees the Moroccan Copyright Office (BMDA), which registers copyrights for literary and artistic works (including software), enforces copyright protection, and coordinates with Moroccan and international partners to combat piracy.
In 2020, OMPIC launched its second strategic plan, Strategic Vision 2025, following the conclusion of its 2016-2020 strategic plan. The new 2025 plan has three pillars: the creation of an environment conducive to entrepreneurship, creativity, and innovation; the establishment of an effective system for the protection and defense of intellectual property rights; and the implementation of economic and regional actions to enhance intangible assets and market-oriented research and development. In 2016 OMPIC partnered with the European Patent Office and developed an for validating European patents in Morocco, and now receives roughly 80 percent of total applications via this channel. In 2020, OMPIC recorded a 25 percent increase of the patent applications filed domestically.
In 2016, the Ministry of Communication and World Intellectual Property Organization (WIPO) signed an MOU to expand cooperation to ensure the protection of intellectual property rights in Morocco. The memorandum committed both parties to improving the judicial and operational dimensions of Morocco’s copyright enforcement. Following this MOU, in 2016, BMDA launched WIPOCOS, a database for collective royalty management organizations or societies, developed by WIPO. Despite these positive changes, BMDA’s current focus on redefining its legal mandate and relationship with other copyright offices worldwide has appeared to lessen its enforcement capacity.
Law No. on Intellectual Property Rights increased penalties for violation of those rights and better defines civil and criminal jurisdiction and legal remedies. It also set in motion an accreditation system for patent attorneys to better systematize and regulate the practice of patent law. Law No. 34-05, amending and supplementing Law No. 2-00 on Copyright and Related Rights includes 15 items (Articles 61 to 65) devoted to punitive measures against piracy and other copyright offenses. These range from civil and criminal penalties to the seizure and destruction of seized copies. Judges’ authority in sentencing and criminal procedures is proscribed, with little power to issue harsher sentences that would serve as stronger deterrents.
Moroccan authorities express a commitment to cracking down on all types of counterfeiting, but due to resource constraints, focus enforcement efforts on the most problematic areas, specifically those with public safety and/or significant economic impacts. In 2017, BMDA brought approximately a dozen court cases against copyright infringers and collected $6.1 million in copyright collections. In 2018, Morocco’s customs authorities seized $62.7 million worth of counterfeit items. In 2018, Morocco also created a National Customs Brigade charged with countering the illicit trafficking of counterfeit goods and narcotics.
In 2015, Morocco and the European Union concluded an agreement on the protection of Geographic Indications (GIs), which is pending ratification by both the Moroccan and European parliaments. Should it enter into force, the agreement would grant Moroccan GIs sui generis. The U.S. government continues to urge Morocco to pursue a transparent and substantive assessment process for the EU GIs in a manner consistent with Morocco’s existing obligations, including those under the U.S.-Morocco Free Trade Agreement.
Morocco is not listed in USTR’s most recent Special 301 Report or notorious markets reports.
For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/. For assistance, please refer to the U.S. Embassy local lawyers’ list, as well as to the regional U.S. IP Attaché .
Resources for Intellectual Property Rights Holders:
Intellectual Property Attaché for the Middle East & North Africa
U.S. Embassy Abu Dhabi | U.S. Department of Commerce U.S. Patent & Trademark Office
Tel: +965 2259 1455
6. Financial Sector
Capital Markets and Portfolio Investment
Morocco encourages foreign portfolio investment and Moroccan legislation applies equally to Moroccan and foreign legal entities and to both domestic and foreign portfolio investment. The Casablanca Stock Exchange (CSE), founded in 1929 and re-launched as a private institution in 1993, is one of the few exchanges in the region with no restrictions on foreign participation. The CSE is regulated by the Moroccan Capital Markets Authority. Local and foreign investors have identical tax exposure on dividends (10 percent) and pay no capital gains tax. With a market capitalization of around $66 billion and 76 listed companies, CSE is the second largest exchange in Africa (after the Johannesburg Stock Exchange). Nonetheless, the CSE saw only 14 new listings between 2010-2020. There was only one new initial public offering (IPO) in 2020. Short selling, which could provide liquidity to the market, is not permitted. The Moroccan government initiated the Futures Market Act (Act 42-12) in 2015 to define the institutional framework of the futures market in Morocco and the role of the regulatory and supervisory authorities. As of March 2021, futures trading was still pending implementation and is not expected to commence until 2023.
The Casablanca Stock Exchange demutualized in November of 2015. This change allowed the CSE greater flexibility and more access to global markets, and better positioned it as an integrated financial hub for the region. The Moroccan government holds a 25 percent share of the CSE but has announced its desire to sell to another major exchange to bring additional capital and expertise to the market. Morocco has accepted the obligations of IMF Article VIII, sections 2(a), 3, and 4, and its exchange system is free of restrictions on making payments and transfers on current international transactions. Credit is allocated on market terms, and foreign investors are able to obtain credit on the local market.
Money and Banking System
Morocco has a well-developed banking sector, where penetration is rising rapidly and recent improvements in macroeconomic fundamentals have helped resolve previous liquidity shortages. Morocco has some of Africa’s largest banks, and several are major players on the continent and continue to expand their footprint. The sector has several large, homegrown institutions with international footprints, as well as several subsidiaries of foreign banks. According to the IMF’s 2016 Financial System Stability Assessment on Morocco , Moroccan banks comprise about half of the financial system with total assets of 140 percent of GDP – up from 111 percent in 2008.
According to Bank Al-Maghrib (the Moroccan central bank) there are 24 banks operating in Morocco (five of these are Islamic “participatory” banks), six offshore institutions, 27 finance companies, 12 micro-credit associations, and 19 intermediary companies operating in funds transfer. Among the 19 traditional banks, the top seven banks comprise 90 percent of the system’s assets (including both on- and off-balance-sheet items). Attijariwafa, Morocco’s largest bank, is the sixth largest bank in Africa by total assets (approximately $55 billion in December 2019). The Moroccan royal family is the largest shareholder. Foreign (mainly French) financial institutions are majority stakeholders in seven banks and nine finance companies. Moroccan banks have built up their presence overseas mainly through the acquisition of local banks, thus local deposits largely fund their subsidiaries.
The overall strength of the banking sector has grown significantly in recent years. Since financial liberalization, credit is allocated freely and Bank Al-Maghrib has used indirect methods to control the interest rate and volume of credit. The banking penetration rate is approximately 56 percent, with significant opportunities remaining for firms pursuing rural and less affluent segments of the market. At the start of 2017, Bank Al-Maghrib approved five requests to open Islamic banks in the country. By mid-2018, over 80 branches specializing in Islamic banking services were operating in Morocco. The first Islamic bonds (sukuk) were issued in October 2018. In 2019, Islamic banks in Morocco granted $930 million in financing. The GOM passed a law authorizing Islamic insurance products (takaful) in 2019, but as of March 2021 the implementation regulations are still pending, and the products are not yet active.
Following an upward trend beginning in 2012, the ratio of non-performing loans (NPL) to bank credit stabilized in 2017 through 2019 at 7.6 percent. This was offset by COVID-related complications causing the NPL rate to jump to 9.9 percent in the end of 2020.
Morocco’s accounting, legal, and regulatory procedures are transparent and consistent with international norms. Morocco is a member of UNCTAD’s international network of transparent investment procedures . Bank Al-Maghrib is responsible for issuing accounting standards for banks and financial institutions. Bank Al Maghrib requires that all entities under its supervision use International Financial Reporting Standards (IFRS). The Securities Commission is responsible for issuing financial reporting and accounting standards for public companies. Moroccan Stock Exchange Law ( Law 52-01 ) stipulates that all companies listed on the Casablanca Stock Exchange (CSE), other than banks and similar financial institutions, can choose between IFRS and Moroccan Generally Accepted Accounting Principles (GAAP). In practice, most public companies use IFRS.
Legal provisions regulating the banking sector include Law No. 76-03 on the Charter of Bank Al-Maghrib, which created an independent board of directors and prohibits the Ministry of Finance and Economy from borrowing from the Central Bank except under exceptional circumstances. Even with the financial crisis caused by COVID-19, the central bank did not provide financing directly to the state, but instead used other monetary tools (such as reducing reserve requirements) to intervene and reinforce the banking sector. Law No. 34-03 (2006) reinforced the supervisory authority of Bank Al-Maghrib over the activities of credit institutions. Foreign banks and branches are allowed to establish operations in Morocco and are subject to provisions regulating the banking sector. At present, the U.S. Mission is not aware of Morocco losing correspondent banking relationships.
There are no restrictions on foreigners’ abilities to establish bank accounts. However, foreigners who wish to establish a bank account are required to open a “convertible” account with foreign currency. The account holder may only deposit foreign currency into that account; at no time can they deposit dirhams. There are anecdotal reports that Moroccan banks have closed accounts without giving appropriate warning and that it has been difficult for some foreigners to open bank accounts.
Morocco prohibits the use of cryptocurrencies, noting that they carry significant risks that may lead to penalties.
Foreign Exchange and Remittances
Foreign investments financed in foreign currency can be transferred tax-free, without amount or duration limits. This income can be dividends, attendance fees, rental income, benefits, and interest. Capital contributions made in convertible currency, contributions made by debit of forward convertible accounts, and net transfer capital gains may also be repatriated. For the transfer of dividends, bonuses, or benefit shares, the investor must provide balance sheets and profit and loss statements, annexed documents relating to the fiscal year in which the transfer is requested, as well as the statement of extra-accounting adjustments made to obtain the taxable income.
A currency-convertibility regime is available to foreign investors, including Moroccans living abroad, who invest in Morocco. This regime facilitates their investments in Morocco, repatriation of income, and profits on investments. Morocco guarantees full currency convertibility for capital transactions, free transfer of profits, and free repatriation of invested capital, when such investment is governed by the convertibility arrangement. Generally, the investors must notify the government of the investment transaction, providing the necessary legal and financial documentation. With respect to the cross-border transfer of investment proceeds to foreign investors, the rules vary depending on the type of investment. Investors may import freely without any value limits to traveler’s checks, bank or postal checks, letters of credit, payment cards or any other means of payment denominated in foreign currency. For cash and/or negotiable instruments in bearer form with a value equal to or greater than $10,000, importers must file a declaration with Moroccan Customs at the port of entry. Declarations are available at all border crossings, ports, and airports.
Morocco has achieved relatively stable macroeconomic and financial conditions under an exchange rate peg (60/40 Euro/Dollar split), which has helped achieve price stability and insulated the economy from nominal shocks. In March of 2020, the Moroccan Ministry of Economy, Finance, and Administrative Reform, in consultation with the Central Bank, adopted a new exchange regime in which the Moroccan dirham may now fluctuate within a band of ± 5 percent compared to the Bank’s central rate (peg). The change loosened the fluctuation band from its previous ± 2.5 percent. The change is designed to strengthen the capacity of the Moroccan economy to absorb external shocks, support its competitiveness, and contribute to improving growth.
Amounts received from abroad must pass through a convertible dirham account. This type of account facilitates investment transactions in Morocco and guarantees the transfer of proceeds for the investment, as well as the repatriation of the proceeds and the capital gains from any resale. AMDIE recommends that investors open a convertible account in dirhams on arrival in Morocco to quickly access the funds necessary for notarial transactions.
Sovereign Wealth Funds
Ithmar Capital is Morocco’s investment fund and financial vehicle, which aims to support the national sectorial strategies. Ithmar Capital is a full member of the International Forum of Sovereign Wealth Funds and follows the Santiago Principles. The $1.8 billion fund was launched in 2011 by the Moroccan government, supported by the royal Hassan II Fund for Economic and Social Development. This fund initially supported the government’s long-term Vision 2020 strategic plan for tourism. The fund is currently part of the long-term development plan initiated by the government in multiple economic sectors.
In Transparency International’s 2020 Corruption Perceptions Index , Morocco maintained the same score of 40 but moved down six spots in the rankings (from 80th to 86th out of 180 countries). According to the State Department’s 2020 Country Report on Human Rights Practices, Moroccan law provides criminal penalties for corruption by officials, but the government generally did not implement the law effectively. Officials sometimes engaged in corrupt practices with impunity. There were reports of government corruption in the executive, judicial, and legislative branches during the year.
According to the Global Corruption Barometer Africa 2019 report published in July 2019, 53 percent of Moroccans surveyed think corruption increased in the previous 12 months, 31 percent of public services users paid a bribe in the previous 12 months, and 74 percent believe the government is doing a bad job in tackling corruption.
The 2011 constitution mandated the creation of a national anti-corruption entity. Morocco formally established the National Authority for Probity, Prevention, and Fighting Corruption (INPLCC) but did not become it operational until 2018 when its board was appointed by the king. The INPLCC is tasked with initiating, coordinating, and overseeing the implementation of policies for the prevention and fight against corruption, as well as gathering and disseminating information on the issue. Additionally, Morocco’s anti-corruption efforts include enhancing the transparency of public tenders and implementation of a requirement that senior government officials submit financial disclosure statements at the start and end of their government service, although their family members are not required to make such disclosures. Few public officials submitted such disclosures, and there are no effective penalties for failing to comply. Morocco does not have conflict of interest legislation. In 2018, thanks to the passage of an Access to Information (AI) law, Morocco joined the Open Government Partnership, a multilateral effort to make governments more transparent.
Although the Moroccan government does not require that private companies establish internal codes of conduct, the Moroccan Institute of Directors (IMA) was established in June 2009 with the goal of bringing together individuals, companies, and institutions willing to promote corporate governance and conduct. IMA published the four Moroccan Codes of Good Corporate Governance Practices. Some private companies use internal controls, ethics, and compliance programs to detect and prevent bribery of government officials. Morocco signed the UN Convention against Corruption in 2007 and hosted the States Parties to the Convention’s Fourth Session in 2011. However, Morocco does not provide any formal protections to NGOs involved in investigating corruption. Although the U.S. Mission is not aware of cases involving corruption regarding customs or taxation issues, American businesses report encountering unexpected delays and requests for documentation that is not required under the FTA or standardized shipping norms.
Resources to Report Corruption
National Authority for Probity, Prevention, and Fighting Corruption
Avenue Annakhil, Immeuble High Tech, Hall B, 3eme etage, Hay Ryad-Rabat
+212-5 37 57 86 60
Transparency International National Chapter
24 Boulevard de Khouribga, Casablanca 20250
Telephone number: +212-22-542 699
10. Political and Security Environment
Morocco does not have a significant history of politically motivated violence or civil disturbance. There has not been any damage to projects and/or installations with a continued impact on the investment environment. Demonstrations routinely occur in Morocco and usually center on political, social, or labor issues. They can attract thousands of people in major city centers, but most have been peaceful and orderly.
11. Labor Policies and Practices
In the Moroccan labor market, many Moroccan university graduates cannot find jobs commensurate with their education and training, and employers report insufficient skilled candidates. The educational system does not prioritize STEM literacy and industrial skills and many graduates are unprepared to meet contemporary job market demands. In 2011, the Moroccan government restructured its employment promotion agency, the National Agency for Promotion of Employment and Skills (ANAPEC), to assist new university graduates prepare for and find work in the private sector that requires specialized skills. The government also is pursuing a strategy to increase the number of students in vocational and professional training programs. The Bureau of Professional Training and Job Promotion (OFPPT), Morocco’s main public provider for professional training, has made several large-scale investments to address the country’s skills gap, most recently announcing the launch of 12 regional training centers in April 2021 at cost of $400 million, adding to its network of dozens of specialized training centers across the county.
According to official government figures, unemployment was 11.9 percent in 2020, with youth (ages 15-24) unemployment hovering around 20 percent. The World Bank and other international institutions estimate that actual unemployment – and underemployment – rates may be higher. In 2018, the Government of Morocco launched a National Plan for Job Promotion, created after three years of collaboration with government partners involved in employment policy, to support job creation, strengthen the job market, and consolidate regional resources devoted to job promotion. This plan promotes entrepreneurship – especially in the context of regionalization outside the Casablanca-Rabat corridor – to boost youth employment.
Pursuing a forward-leaning migration policy, the Moroccan government has regularized the status of over 50,000 sub-Saharans migrants since 2014. Regularization provides these migrants with legal access to employment, employment services, and education and vocation training. The majority of sub-Saharan migrants who benefitted from the regularization program work in call centers and education institutes, if they have strong French or English skills, or domestic work and construction.
According to section VI of the labor law, employers in the commercial, industrial, agricultural, and forestry sectors with ten or more employees must communicate a dismissal decision to the employee’s union representatives, where applicable, at least one month prior to dismissal. The employer must also provide grounds for dismissal, the number of employees concerned, and the amount of time intended to undertake termination. With regards to severance pay (article 52 of the labor law), employees with permanent contracts are entitled to compensation in case of dismissal after six months of employment at the same company regardless of the type and frequency of payment. The labor law differentiates between layoffs for economic reasons and firing. In case of serious misconduct, the employee may be dismissed without notice or compensation or payment of damages. The employee must file an application with the National Social Security Funds (CNSS) agency within 60 days of termination. During this period, the employee shall be entitled to medical benefits, family allowances, and possibly pension entitlements. Labor law is applicable in all sectors of employment; there are no specific labor laws to foreign trade zones or other sectors. More information is available from the Moroccan Ministry of Foreign Affairs Economic Diplomacy unit.
Morocco has roughly 20 collective bargaining agreements in the following sectors: Telecommunications, automotive industry, refining industry, road transport, fish canning industry, aircraft cable factories, collection of domestic waste, ceramics, naval construction and repair, paper industry, communication and information technology, land transport, and banks. The sectoral agreements that exist to date are in the banking, energy, printing, chemicals, ports, and agricultural sectors.
According to the State Department’s Country Report on Human Rights Practices, the Moroccan constitution grants workers the right to form and join unions, strike, and bargain collectively, with some restrictions (S 396-429 Labor Code Act 1999, 65-99). The law prohibits certain categories of government employees, including members of the armed forces, police, and some members of the judiciary, from forming or joining unions and from conducting strikes. The law allows several independent unions to exist but requires 35 percent of the total employee base to be associated with a union for the union to be representative and engage in collective bargaining. The government generally respected freedom of association and the right to collective bargaining. Employers limited the scope of collective bargaining, frequently setting wages unilaterally for the majority of unionized and nonunionized workers. Domestic NGOs reported that employers often used temporary contracts to discourage employees from affiliating with or organizing unions. Legally, unions can negotiate with the government on national-level labor issues.
Labor disputes (S 549-581 Labor Code Act 1999, 65-99) are common, and in some cases result in employers failing to implement collective bargaining agreements and withholding wages. Trade unions complain that the government sometimes uses Article 288 of the penal code to prosecute workers for striking and to suppress strikes. Labor inspectors are tasked with mediation of labor disputes. In general, strikes occur in heavily unionized sectors such as education and government services, and such strikes can lead to disruptions in government services but usually remain peaceful.
In November 2020 following the large spike in unemployment caused by COVID-19, CNSS loosened eligibility requirements, allowing more individuals to qualify for unemployment benefits. Additional laws to further expand social protection in the legislative process, including universal health insurance, family allowances, pension plans, and unemployment benefits. The Domestic Worker Law ( ) entered into force in 2020, giving domestic workers legal status and improving employment conditions.
Chapter 16 of the U.S.-Morocco Free Trade Agreement (FTA) addresses labor issues and commits both parties to respecting international labor standards.