Market Guide

Which business structure can I use?

There are a few options for you to choose from when doing business in Morocco.

• Limited Liability Company (LLC)
  This is the most common business structure, and a preferred choice for entrepreneurs looking to set up a small-and-medium sized business in Morocco.
• Public Limited Company (PLC)
  You may set up a PLC if you are looking to establish larger investments.
• Branch Office (BO)
  You can consider setting up a branch office in Morocco. The branch office is not considered a separate legal entity and must abide by the laws of both Morocco and its country of origin. The branch office must also appoint one manager to represent the office in Morocco.
• Liaison Office (LO)
  You are permitted to set up permanent establishment in Morocco in the form of a liaison office. The liaison office is not a separate legal entity and is not permitted to engage in any commercial of profit making activities in Morocco. This entity must be registered with the Morocco Trade Register and may only engage in activities limited to conducting market research and collecting data, and showcasing the parent company’s products.

Are there any options that allow for 100% foreign ownership?

All the business structures listed above can be fully foreign-owned.

How long does it take to register my business in Morocco?

The typical length of time required for incorporation – from submission of documents to approval by the Ministry of Economy and Finance – is as follows.

• LLC: 6 weeks
• LO: 6 weeks
• PLC: 7 weeks
• BO: 8 weeks

¹ https://www.healyconsultants.com/morocco-company-registration/setup-llc/

How many directors do I need to set up a company? Do I need a minimum number of resident directors?

• Limited Liability Company (LLC)/ Branch Office (BO)/ Liaison Office (LO)
  You need at least one director (of any nationality) and who can be an individual or a corporate body.
• Public Limited Company (PLC)
  You need at least three directors who can either be individuals or corporate bodies.

Are there any restrictions on who I can appoint as a director? Can I appoint foreigners as directors of my board?

No, there are no restrictions. You may appoint foreigners or even corporate bodies as directors of the board.

Can a company in Morocco be wholly-owned by foreigners? Do I need a minimum percentage of local shareholders?

Yes, a company in Morocco can be wholly-owned by foreigners. There is no mandatory local shareholding requirement.

What is the profit share attributed to a foreign shareholder like myself?

There are no restrictions on profit share as there is no mandatory local shareholding requirement.

How many shareholders do I need to set up a company?

• LLC: 2
• PLC: 5
• BO/LO: Not applicable

² https://www.healyconsultants.com/morocco-company-registration/setup-llc/

Do I need approval from the local authorities before my company operates?

Yes, you will need an approval from the Ministry of Economy and Finance before your company can operate.

Are there business activities which foreign companies cannot do?

There are generally no limitations on foreign investment, except in some specific business sectors such as agriculture, audio-visual, banking, fishery, and insurance.

What is the minimum share capital or investment capital I need to set up a company?
What is the typical share capital requirement?

• Limited Liability Company (LLC):
  US$1,000 – 25% of which must be paid upon company setup.
• Public Limited Company (PLC):
  The minimum capital required to set up a PLC is US$30,000 – 25% of which must be paid at company setup. The remaining 75% should be paid within the next three years of operations. If you intend to publicly list the company on the Casablanca Stock Exchange, the required minimum share capital at incorporation is US$300,000.

³ https://www.healyconsultants.com/morocco-company-registration/setup-llc/

Do I need a separate bank account to receive capital?

It is not necessary. You can receive capital contribution in any of your company’s bank accounts.

How long does it take to set up a corporate bank account?

It takes 4 weeks to open a corporate bank account.

Do I need to keep a minimum amount as capital in the bank account at all times? Or can my company use the entire amount for business activities?

No, you do not need to keep a minimum amount related to the share capital but your bank may require a minimum deposit in your account.

What is the current corporate tax rate?

The corporate income tax (CIT) rates are progressive from 10% to 31%, depending on your taxable income. A higher CIT rate of 37% applies to credit institutions and insurance companies.

Are there any tax incentives for my company in Morocco?

There are several tax incentives depending on your business activities and sectors you operate in. Find out more here.

When do I pay corporate tax? Is this paid annually or monthly?

Corporate tax is usually paid annually. The calendar year is normally the fiscal year, although you may also opt for a different fiscal year.

What are the withholding tax rates on interest, dividends and royalties?⁴

The withholding tax rates (based on the Singapore and Morocco tax treaty) are as follows:

• Dividends: 8 – 10%
• Interest: 10%
• Royalties: 10%

Are there any tax treaties between Morocco and Singapore?

Yes, the Singapore-Morocco Double Tax Avoidance Agreement (DTA) provides relief from double taxation in the situation where income is subject to tax for both countries.

Any value-added tax or goods & services tax in Morocco? If so, what is the current rate?

Goods and services sold in Morocco and are delivered or consumed there are subject to value-added tax (VAT). The standard VAT is 20%. Lower rates may apply to specifically designated operations. Read more here.

⁴ http://taxsummaries.pwc.com/ID/Morocco-Corporate-Withholding-taxes

What basic employment benefits must I give to my employees?^{5, 6}

• Minimum Wage: The minimum wage in Morocco is approximately MAD 2,600 (US$270) a month.
• Working Hours: In general, the work week (for non-agricultural sectors) is 44 hours. Although there is a substantial Muslim population, the usual business days are from Monday to Friday.
• Public Holidays: Employees are entitled to 13 national holidays in Morocco.
• Annual Leave: After one year of service, employees are typically entitled to 24 days of paid annual leave.
• Maternity/Paternity Leave: Female employees are entitled to 14 weeks of fully-paid maternity leave. They may also take an additional one year of unpaid leave. Fathers are entitled to three days of paid paternity leave.

Do I need to pay taxes or social security contributions for employees?⁷

You are required to register your Moroccan employees with Moroccan social security, Caisse National de Securite Sociale (CNSS), and expected to pay social security contributions based on your employee’s salary.

The rate of contributions can be about 6.7% of wages for employees, and up to 21% for employers. Some contributions are capped, but not all.

If I send a Singaporean employee to work in Morocco for less than a year, does my employee need a work pass?

Yes, your employee must have a legal work permit to work in Morocco, and you must obtain an authorisation from the Ministry of Labour.

Must I hire a specific number of Moroccan nationals?

No, you need not hire a specific number of Moroccan nationals.

Must I have a physical office in Morocco? Can I use another business’ address or a virtual office address?

No. If you do not wish to have a physical office in Morocco, you can work with a distribution partner or a franchisee from outside of Morocco. There is no specific law governing distribution agreements or franchising, and they are, therefore, subject to contract law.

⁵ https://www.globalization-partners.com/globalpedia/morocco-employer-of-record/
⁶ https://www.lexology.com/library/detail.aspx?g=878cc7ca-e10f-419a-a536-6b7c7a679592
⁷ https://uk.practicallaw.thomsonreuters.com/9-518-1029?transitionType=Default&contextData=(sc.Default)&firstPage=true&comp=pluk&bhcp=1#co_anchor_a207765