This information is derived from the State Department's Office of Investment Affairs Investment Climate Statement. Any questions on the ICS can be directed to EB-ICS-DL@state.gov
Last Published: 9/21/2016

5.1. WTO/TRIMS
The WTO Trade Related Investment Measures’ (TRIMs) database does not indicate any reported Moroccan measures that are inconsistent with TRIMs requirements. However, companies have reported that with regards to public procurement there tends to be a preference for companies utilizing local content or establishing local production facilities. The government also maintains several “free zones” in which companies enjoy lower tax rates in exchange for an obligation to export at least 85% of their production. In some cases, the government provides generous incentives for companies to locate production facilities in the country but may stipulate other requirements in return.

5.2. Investment Incentives
As set out in the Investment Code (Section 2.4), Morocco offers incentives designed to encourage foreign and local investment. Morocco’s Investment Charter gives the same benefits to all investors regardless of the industry in which they operate (except agriculture, which remains outside the scope of the Charter.)

Morocco provides a range of investment incentives including:
Corporate tax holiday:  Companies receive a corporate tax holiday during the first five years of business and a 17.5% rate thereafter.
VAT exemptions (under Section 123-22 B of the General Tax Code):  Equipment goods, materials, and tools needed to achieve investment projects involving an amount higher than or equal to 200 million dirhams (around USD 20.5 million) are exempt from VAT on imports, within the framework of an agreement concluded with the state, during a period of 36 months from the start of business.
Import duty exemptions (Article 7.I of the Finance Act No. 12/98):  Businesses that commit to making an investment of an amount higher than or equal to 200 million dirhams are exempt from import duties (applicable to goods, materials, and tools needed for their project and imported directly by the companies) within the framework of an agreement concluded with the state.

Assistance from the Hassan II Fund for Economic and Social Development:  The fund provides financial assistance for investment projects in certain industrial sectors by supporting up to 30% of the cost of building or acquiring professional buildings as well as contributing up to 15% of the cost of new equipment goods (excluding import duties and taxes). These industrial sectors relate to automobile and aeronautical manufacturing, and nanotechnology, microelectronics, and biotechnology.

Assistance from the Investment and Industrial Development Fund (IIDF):  The fund grants support to qualifying investments for land acquisition, external infrastructure, and training.

Morocco has six integrated industrial zones within the region of Tangier, each dedicated to a different sector of the economy, including car manufacturing and aeronauticsAerospace. Morocco has also set up many free zones to offer companies incentives ranging from tax breaks, subsidies, and reduced customs duties (see also Section 16. Foreign Trade Zones/Free Ports/Trade Facilitation).
Additionally, businesses associated with Casablanca Finance City receive a variety of incentives, including exemption from corporate taxes for the first five years after receiving CFC status.

Afterwards, companies will be taxed a reduced rate of 8.75% instead of the standard 17.5% tax on export turnovers. Companies with regional headquarters in the CFC pay a reduced rate of 10% on profits, versus the average 30% standard rate. Employees of CFC-status companies also benefit from reduced personal income tax rates. Other CFC advantages include administrative assistance. CFC-status companies benefit from expedited processing of work permit applications for their foreign employees, cutting wait times from six months to one week. For details on CFC Eligibility, see:  http://www.casablancafinancecity.com/en/statut-cfc#quoi
More details on investment incentives: http://www.invest.gov.ma/?lang=en&Id=20

5.2.1. Research and Development
U.S. companies successfully compete for Moroccan government tenders, with no exclusions from research and development programs. In some instances, foreign companies may be required to have Moroccan partners for research programs.

5.3. Performance Requirements
The Government of Morocco does not require the use of domestic content in goods or technologies. However, calls for tender may set a preference for local content.

The Moroccan government views foreign investment as an important vehicle for creating local employment, although Moroccan labor law does not specifically require that companies hire Moroccan employees. However, visa issuance for foreign employees is contingent upon a company’s inability to find a qualified employee for a specific position, and can only be issued after that company has verified the unavailability of such an employee with the National Agency for the Promotion of Employment and Competency (ANAPEC). If these conditions are met, the Moroccan government allows the hiring of foreign employees, including for senior management. The process for obtaining and renewing visas and work permits can be slow and may take up to six months. The hiring of foreign employees is governed by Law No. 65-99 Chapter 5 on the Employment of Foreigners, Law No. 02-03 Pertaining to the Entry and Stay of Foreigners in Morocco), and the provisions of Articles 516 to 519 of the Labor Code.

5.4. Data Storage
Local regulation requires the release of source code for certain telecommunications hardware products. However, the Embassy is not aware of any Moroccan government requirement that foreign IT companies should provide surveillance or backdoor access to their source-code or systems

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Morocco Economic Development and Investment Law