Business Guide for Morocco

You can use these business structures to set up your company in Morocco:

Limited Liability Company (L.L.C – SARL)

• At least two founding partners are required, but the number of partners may not exceed 50. However, it is possible to create a SARL with one partner. In this case it will be called “SARL à ASSOCIE UNIQUE”, “LLC with one partner”
• To manage LLCs, you can choose one or several directors among the shareholders or third parties.
• The partner(s) are not required to be Moroccan residents to hold shares in the company; The director is appointed and dismissed by the shareholders' decision to represent at least three-quarters of the share capital.
• The appointment of an External Auditor is required only when the annual turnover exceeds 50 million Moroccan Dirhams (MAD)[~S$6.64 million] excluding tax. The appointed Auditor must be registered with the Moroccan Order of Chartered Accountants

Public Limited Company (PLC)

• At least five shareholders are required to form a PLC. They can be natural persons or legal entities and can be residents or non-residents of Morocco.
• The president of the board of directors, the management board, and the supervisory board must be natural persons.
• Managing the PLC is ensured either by a Board of Directors (composed of at least three members) or by an Executive Board (five members at most).
• An external auditor must be appointed.
• This legal structure can be wholly owned either by foreign or Moroccan individuals/entities.

It is also possible to set up a simplified limited company (société par Action simplifiée: SAS) by one or more persons. the conditions of governance and management of this company are freely decided by the shareholder(s) in the statutes.

Partnership (Société de personnes)

• Partnerships do not have limited liability for debts, so the partners are fully liable or responsible for any debts the business has.
• Partnerships are legal entities, so in case of legal action, the partnership that is taken to court.
• All partners are directors if the Articles of Association do not mention appointed directors and they can be shareholders or not.
• All individual partners in partnerships acquire the status of trader.

This type of association is used often by lawyers, but nothing restricts them from forming an LLC.

There are generally no limitations on foreign investment, except in certain specific business sectors including fishery, media, military armament, mining and other regulated activities where you must check whether they meet the necessary conditions (diploma, personal qualification, etc.) to obtain all necessary approvals from the regulatory authorities.

• Insurance, accounting, legal and financial activities
• General agent and insurance broker
• Law
• Banks, financial and credit institutions
• Chartered accountant and certified accountant
• Management of portfolios of transferable securities or financial futures
• Management of mutual funds, reception and transmission of orders on the financial markets
• Bailiff
• Notary
• Architect
• Real estate agent

Activities which require authorisation are the following:
Under Law no. 12-03, any project relating to an activity listed in the Appendix to Law no. 12-03, and more generally activities that may have an impact on the environment, must seek prior authorisation from the local authorities.

• Unhealthy, inconvenient or dangerous establishments classified in the first category
• Infrastructure projects (railroads, airports, transportation of dangerous or toxic materials, etc.)
• Industrial projects (mining, oil refineries, hydroelectric power plants, etc.)
• Food industry (sugar mills, oil mills, dairy products, etc.)

Companies must apply for licenses to perform activities within the mining sector.

Project that are listed under the Act n°12-03 (see a short list above) must submit their study of the impact of such business on the environment.

In Morocco, depending on the business structure, the amount of the share capital may be subject to minimum or maximum amounts.

• Divided into negotiable shares, the capital is fixed at 300,000 Moroccan Dirhams (MAD) [~S$39,000] without a public offering. It is higher in the case of a public offering, i.e. 3 million MAD (~S$390,000).
• There are two types of shares: either shares of contribution in cash or in-kind.With a minimum value of 100MAD (~S$13), the shares represent the share capital and can be registered or bearer.
• The registered share isestablished in the name of the shareholder, who is registered in the share register. In contrast, the bearer share is said to be held anonymously by shareholders.
• A quarter of share capital amount must be fully subscribed and paid. Shareholders must pay up the remainder within a maximum of three years.

Limited Liability Company (L.L.C – SARL)
Partners can freely determine the amount of share capital. Moroccan law does not require any minimum amount.

Shares are not freely transferable to third parties outside the company. A co-partner can object to the transfer of shares to a third party who is not a partner at the time of the transfer.

At least one quarter of the share capital must be fully subscribed and paid up, with the remainder to be paid up within a maximum of five years.

Opening a company's bank account is essential when setting up your business in Morocco. Each company registered in the commercial register in Morocco must have its own dedicated business bank account. However, it is not necessary to have a separate bank account to receive capital, and the company can use the entire amount for business activities.

Bank account type:

• In Morocco, all companies can open an account with the local currency: the Moroccan Dirham (MAD). This account will be helpful in all their local transactions of any type.

• A particular processional bank account is a privilege granted by banks to holdings in Morocco and not registered with the foreign exchange office. Therefore, they can open a particular professional account for specific needs.

• The foreign currency bank account, also called the bank account in convertible Dirhams, lets the holder make withdrawals in Dirhams or any foreign currency.
• This account is also used for direct debits, transfers, withdrawals, remittances, and transfers without value dates.

• Corporate tax (IS)
• Value-added tax (VAT)
• Local taxes (business tax and municipal services tax)

Corporate income tax (CIT)
The standard corporate tax is calculated on the basics of the following rates that will be applied starting from 2026:

• 20% tax applied to all companies whose taxable income is below 100 million MAD (~S$13 million), hold CFC status (Casablanca Finance City), operate in Accelerated Industrial Zones or signed an convention with the government that they are interested in investing at least 1.5 billion MAD (~$195 million) within 5 years;
• 35% applied when the taxable income exceeds or equal 100 million MAD (~S$13 million);
• 40% applied to banking and insurance sectors.

• CIT cannot be lower than a minimum contribution of 0.25% (or 0.15% for specific products) levied on the turnover and other specific revenues.
• The minimum contribution is not due during the first 36 months following the beginning of activities.

• Non-resident entities are subject to income tax at normal CIT rates derived from all profits or income relating to property that they own, activities that they carry on, and profit-making transactions that they carry out in Morocco.
• The taxation is levied to the portion of income allocable to the branch located in Morocco.
• In addition, a 15% 'branch tax' applies to a non-resident’s after-tax profits. Some treaties may provide protection against the application of the branch tax.
• For resident entities having branches in Morocco, the income is taxable in the hands of the head office at normal CIT rates.

• The standard rate of VAT is 20%. Lower rates of 7%, 10%, and 14% apply to specifically designated operations.

• Agricultural companies with a turnover of less than 5 million MAD (~S$650,000) qualify for a total exemption of CIT if their turnover does not exceed 5 million MAD (~S$650,000) for the past three years consecutively.
• Otherwise, such companies are subject to CIT in normal circumstances.

• These companies are exempted from CIT if they meet certain conditions such as:
  • Real estate assets must be evaluated by listed appraisers;
  • Holding ownership of assets for at least 10 years;
  • Distribute:
    1. At least 85% of earning from business and housing rent;
    2. 100% of dividends received;
    3. 100% of fixed income financial assets;
    4. At least 60% of capital gains on capital assets;

• Non-resident entities are exempt from capital gains derived from the sale of stocks listed on the Casablanca stock exchange, excluding the shares of real estate entities.
• Foreign tax credit
• Income tax paid on income earned from outside Morocco may be credited against CIT payable in Morocco if provided by treaty

Morocco’s employment laws have been formed on the recommendations of the International Labour Organisation, which is considered liberal and easy to follow.

Permits
A foreign national needs to contact the National Agency for the Promotion and Employment of Skills (ANAPEC). This organisation is responsible for providing employees with a work permit.

Wages
There are no statutory wage laws in Morocco, apart from the minimum wage which is equal to 2,970 MAD (~S$395). The employee and employer can mutually agree upon the commercial terms of employment.

• The National Social Security Fund (CNSS) manages the social protection (retirement and medical insurance) of the private sector.
• Companies and individuals contribute 21.09% and 6.74% respectively of the gross income to the fund.

Health and safety
If your company employs more than a total of 50 employees, you must hire or contract a doctor. They are also given a choice to collaborate with other companies and set up joint medical services for their employees.

All companies must, by law, follow the standard safety regulations in Morocco.

Holidays and paid leave
In Morocco, most companies expect employees to work six days a week. Employees usually receive a day off after working a total of six days. According to Moroccan law, expats and other employees are entitled to paid leave of a day and half after each 26 working days.

• The main provisions of Moroccan law governing labour issues are set out in the Labour Code (promulgated by Law no. 65-99) and industry-wide collective bargaining agreements (CBAs).
• There are two types of employment contracts: fixed and permanent contracts.
• Trial period in fixed contracts cannot exceed 14 days when term period is less than 6 months, otherwise one month.
• Unlike fixed contracts, trial period in permanent contracts is fixed for each category of employees (officer, employee, labour employee) and are 3 months, one month and half, and 15 days respectively.
• For non-agricultural businesses, total normal working hours is fixed at 2,288 hours per year or 44 hours by week.
• For agricultural businesses, total normal working hours is fixed at 2,496 hours per year and may be spread out during the year according seasonal activities.
• Wages are usually paid at the end of the month or within five days after the end of month.

Foreign employees
Any employer wishing to hire a foreign employee must obtain authorisations from the Ministry of Labour. Authorisation is granted as a visa stamped on the employment contract enacted by the employer with the foreign employee.

• The employer's share of social security contributions is 12.11% (uncapped) and 8.98% (computed on a gross salary capped to 6,000 MAD [~S$780 per month]) of the gross salary.
• The company can use a business address or virtual office address. It is not necessary to have a physical office.