Morocco is a constitutional monarchy with an elected parliament and a mixed legal system of civil law, mainly based on French law, and some influence from Islamic law.
Mohammed VI (King), Saadeddine Othmani (Prime Minister)
Rabat (1.66m people)
Other major cities
Casablanca (3.14m people)
Fes (0.96m people)
Salé (0.90m people)
Automotive parts, phosphate mining and processing, aerospace, food processing, leather goods, textiles, construction, energy, tourism
Moroccan Arabic (official), Berber languages (Tamazight (official), Tachelhit, Tarifit), French (often the language of business, government, and diplomacy)
- Capital markets
Current number of listed companies
Corporate Governance Code
You can download the full Corporate Governance Code here (French).
Bourse de Casablanca (BC) - visit website here.
Listing rules can be downloaded here.
Law n° 1-93-211 dated 21 September 1993 on stock exchange - more information can be found here (French).
Public offers / disclosure regulations
You can download the full Public Offers / Disclosure Regulations document here (French).
Regulatory body or bodies
Takeover / merger regulations
You can download the full Takeover / Merger Regulations document here (French).
- Competition regulation
Impact of regulatory regime on business
Transactions involving a concentration are subject to prior clearance from the anti-trust authorities when one of the following three conditions is met:
- The worldwide turnover of all the persons or entities involved in the deal exceeds 750 million Moroccan Dirhams.
- The turnover made in Morocco by all the persons or entities involved in the deal exceeds 250 million Moroccan Dirhams.
- The entities involved and their related entities have performed, in the year preceding the transaction, more than 40% of the sales, purchases or other transactions on the local market of goods, products or services of the same nature or on a substantial part of such market.
The main principles of Moroccan competition legislation are the prohibition of anti-competitive agreements and dominant position abuse.
- Corruption / transparency
Corruption Perception Index rank worldwide for 2017
Corruption Perception Index score for 2017
Signatories to the African Union Convention on Preventing and Combating Corruption?
Signatories to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions?
Signatories to United Nations Convention against Corruption (UNAC)?
Morocco's domestic arbitration law is governed by Law n° 08-05. This Law is incorporated into the Code of Civil Proceedings (“Code de procédure Civile”) and is based on the UNCITRAL Model Law.
Morocco has signed the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Therefore, arbitration awards from any country who have signed this Convention will be recognised in Morocco.
There are two principal arbitration bodies in Morocco, both with their own set of arbitral rules:
- “Cour Marocaine d’Arbitrage” (CMA) - a branch of the ICC in Morocco, competent for arbitration involving Moroccan parties; and
- “Cour Hispano-Marocaine d’Arbitrage” - specialising in international litigation involving Moroccan and Spanish parties.
Enforcement of arbitral awards
Foreign courts judgments are enforceable in Morocco, subject to the provisions of a Dahir dated 28 September 1974.
Accordingly, the judgments of foreign courts are only enforceable in Morocco if the “exequatur” (approval of execution) of such a judgment has been pronounced in a Moroccan court. The competent court is the “tribunal de première instance” (first degree civil court) of the defendant’s domicile or the place of execution.
The Moroccan court must check that the judgment has been issued by a competent court abroad. It also must ensure that no provision of the foreign judgment is contrary to Moroccan public order. If the exequatur is awarded by the Moroccan court, the applicant receives an enforceable copy of the judgment allowing him to execute the judgment in Morocco.
Morocco has signed bilateral conventions for the recognition and enforcement of judgments with the following countries: France, Spain, Italy, United Arab Emirates, Algeria, Belgium, China, Libya, Romania, Senegal, Tunisia, Poland and United Kingdom.
Structure of the court system
- High Court ("Cour de Cassation")
- Courts of appeal
- Primary Courts
There are four categories of courts:
- common law courts for civil, labour, family law and criminal matters;
- specialised courts for commercial and administrative matters;
- exceptional court for military matters;
- proximity jurisdictions.
High court includes six specialised sections:
- administrative; and
- family law.
- Foreign investments
Foreign investment incentives
Companies (local or foreign) carrying out investments of more than 100 million Dirhams are entitled to sign an investment convention with the Moroccan government. This investment convention may provide for customs duty exemptions, VAT exemptions, and government contributions to cost of the project (e.g. training expenses).
Specific incentives are also available for companies operating in free zones and in offshore areas.
Foreign investment rules
There are no restrictions preventing foreign investors from holding issued shares in a listed company.
- Dahir dated 15 April 1938 related to outdoor advertising
- Law n° 31-08 dated 18 February 2011 related to consumer protection
- Law n° 77-03 dated 7 January 2005 related to audio-visual communication
- Dahir n° 1-01-36 dated 15 February 2001 related to cinema industry
Industry specific legislation
- Dahir dated 22 November 2006 related to drugs and pharmacy code
- Dahir dated 26 June 1995 related to advertising for tobacco products
- Dahir dated 28 December 2012 related to disclosure regulations in capital markets
- Dahir dated 31 August 2002 related to the High Authority of Audio-visual Communication
Capital Gains Tax
Capital gains obtained by companies are taxed at the same rates as ordinary income. They can be offset against tax losses of previous years.
There is no legal definition of capital gains for corporate income tax purposes.
Capital gains are calculated as the difference between the proceeds of the transfer of a fixed asset and the acquisition cost of such assets, reduced by the amount of tax-deductible depreciation.
Dividends paid to non-resident entities or individuals are subject to a 15% withholding tax under domestic law. This rate can be reduced under tax treaties.
A 15% withholding tax also applies to net income transferred by a branch or permanent establishment to its non-resident parent company.
Foreign investors benefit from the right to repatriate their investment and the yield thereon provided that the investment was made in foreign currency and duly reported to the exchange control authorities (Office des Changes).
Export Processing Zone
There are several free trade zones. These are located in Tangier, Kenitra, Dakhla, Laayoune, Oujda, Nador, Fez, Salé and Nouaceur.
The following benefits apply to income accrued from the export of goods and services by companies established in free trade zones:
- Year 1 to 5 of operation - exempt from corporate income tax.
- Year 6 to 20 - a reduced rate of 8.75%.
- Year 21 onwards - reduced rate of 17.5%.
Interest paid to non-resident entities or individuals is subject to a 10% withholding tax under domestic law. None of the current tax treaties entered into by Morocco provide for a lower tax rate.
Domestic law exempts interests paid to non-residents from withholding tax, provided that they are in connection with:
- loans granted to the Moroccan State or guaranteed by the Moroccan State;
- deposits in foreign currency or in convertible dirhams;
- loans granted in foreign currency for at least ten years; or
- loans granted in foreign currency by the European Investment Bank to finance projects approved by the Moroccan government.
Tax losses comprise of losses from ordinary activities and capital losses. Both types of losses are treated the same manner.
The tax authorities usually take the stance that losses incurred by foreign permanent establishments cannot be offset against domestic income.
Operating losses can be carried forward for four years. However, losses arising from fixed assets depreciation can be carried forward indefinitely.
Loss carry-backs are not permitted.
There are no restrictions on tax loss carry-forwards in the event of a change of company ownership.
Newly listed companies (Casablanca Stock Exchange)
Newly listed companies, except banks, insurance companies and public firms, benefit from a reduction on corporate income tax during the three fiscal years following their introduction to the stock market, which is determined as follows:
- A 25% reduction, if the introduction to the stock market is made through a sale of existing shares.
- A 50% reduction, if the shares listed are newly issued through a capital increase of at least 20% of the total share capital.
Payroll tax and social security
Current social security rates are as follows:
- Employee fixed contribution: 4.48% of gross salary outside of exempted allowances. This base is limited at 6,000.00 dirhams per month.
- Employer fixed contribution: 8.98% on the same basis as above.
- Employee contribution for health insurance: 2.26% of the gross salary outside of exempted allowances. No limitation applies to this base.
- Employer contribution: 12.11% of the gross salary outside of exempted allowances. No limitation applies to this base.
Personal Income Tax
Personal income tax rates (in force since 2010) are as follows:
Annual taxable income (in dirhams) | Rate
- 0 – 30,000 | 0%
- 30,001 – 50,000 | 10%
- 50,001 – 60,000 | 20%
- 60,001 – 80,000 | 30%
- 80,001 – 180,000 | 34%
- Over 180,000 | 38%
Special rates apply to certain types of income (e.g. capital gains arising on disposals of real estate property are taxed at 20% with a minimum value of 3% of the sale price).
Business Tax ("Taxe professionnelle")
This local tax is due by companies and individuals that perform a business activity. It is levied annually at 10.5% of the rental value, as legally defined, of the buildings and equipment (rented or owned) used in the activity.
Resident companies / non-resident companies
The following entities are taxed as corporations:
- limited partnerships by shares;
- limited liability companies;
- general and limited partnerships in which at least one partner is a corporation;
- civil companies, permanent establishments of non-resident entities; and
- public sector companies that pursue profit-oriented activities and associations that pursue business-oriented activities.
General partnerships and limited partnerships, in which all partners or parties are individuals, can elect to be taxed as corporations.
Transparent entities, like mutual funds investing in transferable securities, are exempt from corporate income tax and their income is taxed at the owner’s level.
Resident companies and permanent establishments of non-resident companies are taxed on their worldwide income and capital gains irrespective of where these have been derived.
As a general rule, non-resident entities are taxed as corporations.
Non-resident entities are taxed on income and capital gains derived in Morocco.
Royalties paid to non-residents are subject to a 10% withholding tax under domestic law. This rate can be reduced under tax treaties.
Transfers of land are subject to a 5% stamp duty, payable by the purchaser. However, acquisitions of land by banks, insurance companies and financial institutions are subject to 6% stamp duty. When land is intended for the construction of a hotel, its transfer is exempt from stamp duty.
Transfers of buildings are subject to a 4% stamp duty, payable by the purchaser. This rate also applies to transfers of land with buildings thereon as long as the surface of the undeveloped land does not exceed five times the constructed area.
Transfers of goodwill are subject to a 6% stamp duty, payable by the purchaser.
The registration of transfers of real estate with the property register is subject to a 1.5% duty, payable by the purchaser.
The “taxe sur les terrains non bâtis” is a local tax that is due on bare/undeveloped land. The amount of the tax is fixed by each municipality within certain ranges.
Technical service fees
Remuneration for services paid to non-residents is subject to a 10% withholding tax under domestic law. While tax treaties can exempt this income from withholding taxes, these treaty provisions are often disregarded by the tax authorities.
Thin cap regulations
A thin capitalisation rule applies to funds received from shareholders, whether resident or non-resident. Under this rule, the interest accrued on the funds granted by shareholders is only tax deductible for the borrower provided that all the following requirements are met:
- the capital stock of the borrower is fully paid-in;
- the interest-bearing principal does not exceed the capital stock of the borrower; and
- the interest rate does not exceed the rate set every year by the Ministry of Economy and Finance. For 2018 this rate has not been set yet. For 2017 it was set at 2.21%.
The transfer pricing rules apply to all domestic and cross-border transactions between related parties. Local tax legislation does not provide for any pricing methods.
Transfer pricing assessments issued by the tax authorities are subject to a penalty ranging from 25% to 35% of the resulting unpaid tax and to an interest rate of 5% for the first month of delay and of 0.5% for each subsequent month. Bilateral assessments are not available.
No pricing rulings or advance pricing agreements are available.
Value Added Tax
The standard rate is 20%.
Reduced rates are 7%, 10%, and 14%. Some transactions are VAT exempt.