Morocco continues to be an attractive investment destination for foreign direct investment due to its stability both politically and economically, and resilience witnessing a strong growth rates and low inflation, in addition to its strategic location as the closest African country to both the EU and the US, and the investments in infrastructure.
Private investment is governed by Framework Law No. 18-95 forming the investment charter.
In order to ensure acontinuous improvement of the business climate in order to guarantee a clear and transparent framework, conducive to investment, for the benefit of national and international operators, the National Committee for the Business Environment (CNEA) was created in December 2009.
This body is composed of representatives of the public and private sectors and its mission is to identify and implement measures to strengthen Morocco's attractiveness. Today, the CNEA aims to be the only public-private platform for public-private dialogue in terms of improving the business climate and monitoring Morocco's image internationally. It is at the same time, a force for proposal, steering the implementation, and evaluating reforms both at the national and regional levels, in close collaboration with the Regional Business Environment Committees (CREA).
- The Automotive Sector: The biggest exporting sector in Morocco and represents more than 25% of overall exports. Morocco is the first passenger car producer in Africa and currently produces 8 models (2 of them are electric). The sector started 50 years ago and benefits from qualified human resources, world class infrastructure and government support. The exports of this sector exceeded 8 billion USD and includes around 250 companies employing 220 thousand employees.
- Aeronautics Sector: The sector has seen important investments with turnover exceeding 2 billion USD, and 140 companies operating in this sector employing over 20 thousand employees.
- The Textiles Sector: Exports exceeded 3.6 billion USD representing around 12% of industrial exports, with 1200 companies operating in this sector employing around 190 thousand employees.
- Agri-food Sector: One of the most important sectors in the Moroccan economy with over 17 billion USD in revenue creating 160 thousand jobs.
- The Pharmaceutical Sector: Morocco is one of the biggest pharmaceutical produces in Africa with a turnover of around 1.7 billion USD, and representing more than 5% of the industrial GDP and creating 55 thousand Jobs. The sector exports are mainly to African countries and to Europe with multinational companies investing in Morocco.
1. FINANCIAL SUPPORT
- The Industrial Development Fund (FDI)
A public industrial investment fund (the Industrial Development Fund – FDI), endowed with an envelope of 20 billion dirhams, will enable the industrial fabric to consolidate, modernize and develop its ability to substitute for imported products.
The FDI was created within the framework of the 2015 finance law and benefits from annual resources amounting to 3 billion DH over the period 2014-2020.
In parallel with the support of the State, the support of the banking sector is renewed with the launch of the new strategy. An integrated and competitive financing offer has been put in place, under a partnership agreement concluded between the State and the banking sector, which undertakes to support industrial companies (competitive rates, support for restructuring, support for the internationalization, …) and to provide the necessary consultation and support to project promoters.
- The Investment Promotion Fund (FPI)
Provided for by the Investment Charter and intended for all industrial sectors, the FPI offers partial coverage by the government of certain expenses related to the acquisition of land (within the limit of 20% of the cost of the land ), external infrastructure (within the limit of 5% of the total amount of the investment program or 10% in the case of an investment in the spinning, weaving or finishing sector) and vocational training (up to 20% of the cost of this training).
These contributions may be combined without, however, the total participation of the State exceeding 5% of the overall amount of the investment program; or 10% when it is an investment in the sector of spinning, weaving or textile finishing or when the investment project is planned in a suburban or rural area.
Eligibility criteria:
The investment project must meet at least one of the following five criteria:
- be of an amount greater than or equal to 200 million dirhams over 3 years;
- be carried out in one of the provinces or prefectures mentioned in decree n° 2-98-520 of 5 rabii I 1419 (June 30, 1998) ;
- allow the creation of a minimum of 250 stable jobs over 3 years;
- ensuring technology transfer;
- contribute to the protection of the environment.
- The Hassan II Fund for Economic and Social Development
In the automotive, aeronautics and electronics sectors, the Hassan II Fund offers subsidies up to 15% of the total amount of the investment, capped at 30 million dirhams, detailed as follows:
- 30% of the cost of professional buildings on the basis of a maximum unit cost of 2,000.00 DH excluding tax/m² (excluding any other State contribution granted to the acquisition of land and/or the construction of professional buildings);
- 15% of the acquisition cost of new capital goods (excluding import duties and taxes) (excluding any other State contribution granted for the acquisition of capital goods);
- With regard to the automotive sector only: 15% of the acquisition cost of used capital goods imported and intended for stamping, plastic injection or the manufacture of tools and molds (excluding any other State contribution granted for the acquisition of capital goods).
With regard to the aeronautical sector only, projects for which the amount of investment in capital goods is greater than 200 million dirhams (excluding import duties and taxes) can be carried out in one or more phases (without exceeding a total period of 60 months, extendable by 12 months in the event of force majeure or unforeseeable circumstances) considering each of the phases as a project eligible for the Fund's contribution.
The total amount of investment (excluding taxes and import duties) must be greater than or equal to 10 million dirhams and the amount of investment in goods and equipment (excluding taxes and import duties) greater than or equal to 5 million dirhams.
Under the PAI, aid from the Hassan II Fund is extended to the chemical and parachemical industries (ICP) sector, including the pharmaceutical sector. The Fund grants a financial contribution of up to 15% of the total amount of the investment, capped at 30 million dirhams, broken down as follows:
- 10% of the cost of professional buildings (excluding any other State contribution granted for the acquisition of land and/or the construction of professional buildings);
- 20% of the acquisition cost of new capital goods (excluding any other State contribution granted for the acquisition of capital goods).
Tax incentives for all industrial sectors are provided for by article 123-22°-a) of the General Tax Code and article 7.1 of finance law n° 12-98 for the 1998-1999 budget year as as amended and supplemented, namely:
- Exemption from the import duty of capital goods, materials and tools necessary for the realization of an investment project whose amount exceeds 200 million dirhams, and this for 36 months from the signing of the investment agreement; this exemption is extended to parts, spare parts and accessories imported at the same time as the aforementioned equipment;
- exemption from VAT on the importation of capital goods, materials and tools necessary for the realization of an investment project whose amount is greater than 200 million dirhams, for 36 months from the start activity of the company or the date of issue of the building permit and it is extendable by 6 months in the event of force majeure (renewable once); this exemption is extended to parts, spare parts and accessories imported at the same time as the aforementioned equipment.
SMEs in the sector can benefit from specific support under the programs developed by MAROC PME :
IMTIAZ GROWTH; Corporate taxes (CIT)
The CIT rates are as follows (proportional scale):
|
Taxable income (MAD) |
CIT rate (%) |
|
|
From |
To |
|
|
0 |
300,000 |
10 |
|
300,001 |
1,000,000 |
20 |
|
1,000,001 |
and above |
31 |
Specific cases
- The rate of 20% is also applicable to the portion of the taxable profit above MAD 1 million for some companies, such as exporting companies, mining companies, companies carrying out service outsourcing activities inside or outside the industrial integrated platforms devoted to those activities, etc.
- The rate of 31% is reduced to 26% for companies holding an industrial activity with a net profit of less than MAD 100 million.
- Lower CIT rates might apply to some specific activities.
- A higher CIT rate of 37% applies to credit institutions, insurance companies, and Takafoul insurance and reinsurance companies.
Personal Taxation:
The individual income tax is calculated on the basis of the following progressive scale:
|
Annual taxable income (MAD) |
Tax rate (%) |
|
0 to 30,000 |
Exempted |
|
30,001 to 50,000 |
10 |
|
50,001 to 60,000 |
20 |
|
60,001 to 80,000 |
30 |
|
80,001 to 180,000 |
34 |
|
More than 180,000 |
38 |
Value-added tax (VAT)
VAT is levied under the Moroccan Tax Code and is due on all industrial, commercial, and handicraft transactions taking place in Morocco, as well as on importation operations.
The standard rate of VAT is 20%. Lower rates of 7%, 10%, and 14% apply to specifically designated operations. (Read more)
The following table includes the main parts of the Labour Law in Morocco:
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1.1.1 EMPLOYMENT CONTRACT (Art. 15-19 of Law No. 65-99 on the Labour Code)
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The Labour Code recognizes three types of contracts: - The employment contract for an indefinite period (CDI) - The fixed-term employment contract (CDD) can only be concluded in the following cases:
In the agricultural sector, the fixed-term contract is concluded for a renewable period of 6 months provided that the duration of the contracts does not exceed 2 years. The contract then becomes indefinite. In other sectors, the fixed-term contract is concluded for a maximum period of one year, renewable only once. After this period, the fixed-term contract becomes a permanent contract. |
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AGE OF ADMISSION TO WORK (art.143 of Law No. 65-99 on the Labour Code) |
Minors may not be employed or admitted to enterprises or employers before the age of fifteen (15).
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WORKING HOURS (art.184 of Law No. 65-99 on the Labour Code) |
Sectors of industry, commerce and liberal professions: - Annual duration: 2288 hours - Weekly duration: 44 hours (Decree No. 2-04-569 of 29/12/2004 – BO No. 5280 of 06/01/2005) Agricultural sector: - Annual duration: 2496 hours - weekly duration: Variation according to the needs of the crops. (Order of the Minister of Employment No. 340-05 of 09/02/2005 – BO No. 5540 of 05/07/2007) |
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OVERTIME (art.196-204 of Law No. 65-99 on the Labour Code) |
Overtime is the hours of work worked beyond the employee's normal working hours. They are paid in a single instalment at the same time as the salary due. - Overtime wage increase : 25% if they are carried out between 6 a.m. and 9 p.m. for non-agricultural activities and between 5 a.m. and 8 p.m.for agricultural activities. This increase is increased to 50% if the overtime is worked on the employee's weekly rest day, even if compensatory rest is granted. - 50% if they are carried out between 9 p.m. and 6 a.m. for non-agricultural activities and between 8 p.m. and 5 a.m. for agricultural activities. This increase is increased to 100% if overtime is worked on the employee's weekly rest day, even if compensatory rest isgranted.
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1.1.4 WEEKLY REST (art.205-216 of Law No. 65-99 on the Labour Code)
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A weekly rest of at least twenty-four (24) hours from midnight to midnight must be granted to employees on Friday, Saturday, Sunday, or weekly market day (for rural areas). It must be granted simultaneously to all employees of the same establishment unless exempted by the government authority responsible for labour.
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1.1.5 PAID HOLIDAYS AND PUBLIC HOLIDAYS (art.217-230 of Law No. 65-99 on the Labour Code)
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Employers must not employ employees on paid holidays and public holidays. However, in establishments whose operation is necessarily continuous because of the nature of their activity or which have adopted weekly rest on a rotating basis, work may not be interrupted on a paid holiday or public holiday. It may be decided that the public holiday shall be remunerated as actual working time.
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List of public holidays, paid non-working days |
https://maroc-diplomatique.net/le-calendrier-des-jours-feries-au-maroc-en-2019/ |
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1.1.6 PAID ANNUAL LEAVE (art.231-264 of Law No. 65-99 on the Labour Code) |
Every employee is entitled, after six months of continuous service in the same company or with the same employer, to paid annual leave, the duration of which is fixed as follows: • one and a half days of actual work per month of service; • two days of actual work per month of service for employees under 18 years of age. This duration shall be increased by one and a half days of actual work per full period, continuous or not, of 5 years of service, without, however, bringing the total duration of the leave to more than 30 days of actual work. The period of paid annual leave extends throughout the year. "Effective working days" are days other than weekly rest days, paid holidays and public holidays in the establishment. |
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1.1.7 OCCUPATIONAL MEDICAL SERVICES (art.304-331 of Law No. 65-99 on the Labour Code)
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Industrial, commercial and craft enterprises as well as agricultural and forestry holdings and their dependencies which employ at least fifty (50) employees as well as those carrying out work exposing employees to the risk of occupational diseases must set up a self-employed work medical service. Those employing fewer than fifty (50) employees must establish independent or joint occupational medical services under the conditions laid down by the government authority responsible for labour. The occupational medical services are operated by one or more doctors known as 'occupational physicians' who must perform their duties in person. The costs of organising and monitoring the medical service and the remuneration of the occupational physician shall be borne by the undertaking or the inter-company medical service. Self-employed or inter-company occupational medical services must secure full-time assistance from state-certified social workers or nurses.
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1.1.8 SALARY AND SENIORITY BONUS (art. 345 - 355 of Law No. 65-99 on the Labour Code)
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The wage is freely fixed by direct agreement between the parties or by collective labour agreement, subject to the legal provisions relating to the statutory minimum wage. Unless the salary is based on seniority, by virtue of a clause in the employment contract, internal regulations or a collective labour agreement, all employees must receive a seniority bonus the amount of which is set at: • 5% of the salary paid, after two years of service; • 10% of the salary paid, after five years of service; • 15% of the salary paid, after twelve years of service; • 20% of the salary paid, after twenty years of service; • 25% of the salary paid, after twenty-five years of service.
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1.1.9 LEGAL MINIMUM WAGE (art. 356-361 of Law No. 65-99 on the Labour Code and Decree No. 2-11-247 of 01/07/2011 - BO No. 5959 of 11/07/2011-)
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The legal minimum wage is the minimum value due to the employee. It is calculated: • in non-agricultural activities, on the basis of the remuneration paid to the employee for one hour of work; • in agricultural activities on the basis of remuneration paid for a day's work. Any individual or collective agreement to lower the wage below the statutory minimum wage is automatically null and void. On 1 January 2020, the SMIG is equal to:
- 14.13 dirhams / hour (or 2698.83 dirhams per month) for the sectors of industry, commerce and liberal professions - 73.22 dirhams per day for the agricultural sector |
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1.1.10 PROFESSIONAL UNIONS (art.396-429 of Law No. 65-99 on the Labour Code)
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The purpose of professional unions is to defend, study and promote the economic, social, moral and professional interests, individual and collective, of the categories they supervise and to improve the level of education of their members. They may be freely constituted by persons exercising the same profession or trade, similar or related professions or trades contributing to the manufacture of specific products or the provision of specific services, regardless of the number of employees in the enterprise or establishment. Employers and employees may freely join the trade union of their choice. The members responsible for the administration and management of the professional union must be of Moroccan nationality and enjoy their civil and political rights and have not incurred any final sentence of imprisonment or imprisonment. The trade union representative in the company benefits, in agreement with the employer, from leave of absence to participate in training sessions, conferences, seminars or national and international trade union meetings.
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1.1.11 EMPLOYEE DELEGATES (Art. 430 -463 of Law No. 65-99 on the Labour Code) |
Employee delegates must be elected in all establishments usually employing at least ten (10) permanent employees. Their mission is to: • to submit to the employer all complaints relating to working conditions; • to refer such complaints to the labour inspector if the disagreement persists.
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1.1.12 WORKS COUNCILS (Art. 464 -474 of Law No. 65-99 on the Labour Code) |
The works council is an advisory committee created within companies employing at least fifty (50) employees. It includes: • the employer or his representative; • two employee delegates elected by the company's employee delegates; • one or two union representatives in the company, if applicable. As part of its advisory role, it is responsible for the following matters: • the structural and technological transformations to be carried out in the company; • the company's social balance sheet at the time of its approval; • the company's production strategy and ways to increase profitability; • the development of social projects for the benefit of employees and their implementation; • apprenticeship, training and integration programmes, the fight against illiteracy andthe continuing training of employees. |
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1.1.13 EMPLOYMENT OF FOREIGN EMPLOYEES (art. 516 -521 of Law No. 65-99 on the Labour Code) |
Any employer wishing to recruit a foreign employee must obtain authorization from the government labour authority. This authorisation is granted in the form of an endorsement affixed to the employment contract. The date of the visa is the date on which the employment contract takes effect.
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1.1.14 RETIREMENT AGE (Art. 526 -529 of Law No. 65-99 on the Labour Code)
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The retirement age is set at sixty (60) years with the possibility for the employee to continue to be employed after this age by order of the government authority in charge of work at the request of the employer and with the consent of the person concerned. For employees in the mining sector, the retirement age is set at fifty-five (55) years. The employer must replace any retired employee with another employee.
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1.1.15 LABOUR INSPECTION (Art. 530-548 of Law No. 65-99 on the Labour Code) |
shave beenapprovedby the labour inspectorate: • labour and social affairs inspectors and controllers, • inspectors and controllers of social laws in agriculture, • staff under the Mines Administration with regard to labour inspection in mining enterprises • any agent commissioned for this purpose by other administrations Their mission is to: • to ensure the application of the laws and regulations relating to labour; • to provide information and technical advice to employers and employees on the most effective means in accordance with legal provisions; • to inform the government authority responsible for labour of shortcomings or exceedances of certain legislative and regulatory provisions in force; • to attempt conciliation in individual labour disputes. They must draw up a report on any inspection visit they carry out.
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Agency |
Description |
Address |
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Moroccan Agency for Investment and Export Development (AMDIE) |
The Moroccan Agency for Investment and Export Development is responsible for promoting national and international investments as well as the export of goods and services. |
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