Morocco - Market Challenges Morocco - Market Challenges
The greatest barriers to doing business in Morocco are a lack of transparency in government procurement, slow bureaucratic decision-making and procedures, and restrictions on pre-payments for imports prior to delivery. Companies often complain about delays in receiving government payments.
The legal and banking systems in Morocco differ in many ways from U.S. systems. The legal system is based on a combination of French, Spanish, and Islamic laws, and can be complex for U.S. companies to navigate. International and domestic arbitration are accepted and used in business contracts. Morocco has made significant reforms to the banking system in previous years, including structures and programs for foreign direct investment (FDI), project finance, and trade finance. However, significant delays in procurement implementation and payments can still occur.
Restrictions on prepayments of imported orders are often problematic for U.S. exporters who require 100% advance payment. Currently, Moroccan companies can prepay up to 30 % of the total shipment in advance of importation and letters of credit are often used to finance shipments. A Moroccan company can prepay 100% only for orders under MAD 100,000 (approximately $ 10,500). Payments from Moroccan government-owned companies can be slow and are often burdened by heavy bureaucracy.