Morocco: Investing

FDI in Figures

In recent years, Moroccan authorities have attracted a relatively consistent flow of foreign capital, mainly relying on the national privatization program, the conversion of foreign debt into investments and operations of public service concession. Other sectors have taken over, including banking, tourism, energy, industry. However, the level of FDI remains modest and could make a stronger contribution to the country's economic takeoff.

After a decline in 2009 due to the global recession, FDI flows to Morocco dried up in 2011 (-35% compared to 2010), in the context of the eurozone crisis and the revolutions of the "Arab Spring". France, Saudi Arabia and Spain are the three main investors. FDI is concentrated mainly in the real estate sector, followed by industry and tourism. The country's stability should however prove attractive to investors. In addition, a vast project of economic modernization has been launched to boost FDI. Casablanca in particular, aims to become an international financial center.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	2,487	1,952	1,304
FDI Stock (million USD)	39,388	40,719	42,023
Performance Index*, Ranking on 141 Economies	88	94	-
Potential Index**, Ranking on 141 Economies	96	-	-
Number of Greenfield Investments***	93	49	-
FDI Inwards (in % of GFCF****)	9.0	6.1	-
FDI Stock (in % of GDP)	45.5	46.0	-

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

FDI Inflows By Countries and Industry

Main Investing Countries	2010, in %
France	49.4
Spain	16.7
United Arab Emirates	5.6
Switzerland	3.4
Great Britain	3.4

Main Invested Sectors	2010, in %
Telecommunications	25.2
Industry	18.9
Real estate	17.1
Tourism	15.0
Banking	8.5

Source: Moroccan Investment Development Agency - Last Available Data.

Form of Company Preferred By Foreign Investors: S.A(public ltd. company), S.A.R.L (private ltd. company
Form of Establishment Preferred By Foreign Investors: Subsidiary
Main Foreign Companies: Telefonica, the Spanish telecommunications giant shows its presence through the Méditel mobile operator and call centers Atento. Dell has just completed its largest center of Europe-Africa-Middle East area.
France has nearly 500 subsidiary companies in Morocco which employ on the whole more than 65,000 people. Among the principal subsidiary companies of foreign companies based in Morocco, one can quote Total, Renault, Holcim but also St Microelectronics, Sanofi-Aventis and Nestlé.
Sources of Statistics: Foreign exchange office

Why You Should Choose to Invest in Morocco

Strong Points: Morocco's strengths are:
- A legal framework and assistance measures very favorable to the investors;
- Still relatively low salaries;
- A Strategic position, not far from Europe;
- A Young and relatively well trained population;
- Strong growth.
Weak Points: Morocco's weaknesses are:
- A still relatively limited Domestic market;
- A country still very dependent on agriculture and vulnerable to the prices of hydrocarbons.
Government Measures to Motivate or Restrict FDI: The government adpoted the "Investment Charter" in 1995. This charter mainly provides company exemptions for VAT and corporate tax for 5 years.
In the industrial sector, the Emergence Plan creates infrastructures which offer turnkey premises.

Protection of Foreign Investment

Bilateral Investment Conventions Signed By Morocco: Morocco has concluded agreements with 51 countries including France, Spain, Egypt, Italy, Lebanon, Libya, Portugal, Tunisia and Turkey for guarantee of overseas investments against every risk of nationalization and compulsory purchase. Several of these agreements can be downloaded on the web site of the UNCTAD. Those define the framework of protection of overseas investments for each signatory country.
Besides, the Association Agreement between the EU and Morocco, effective in March 2000, envisages also, with article 50: "establishment of a legal framework supporting investment, if necessary, by the conclusion of agreements of protection of investments and agreements intended to avoid double taxation between Morocco and the Member States".
International Controversies Registered By UNCTAD: 3 cases have been registered in the construction sector (construction of highways and hotels).
Organizations Offering Their Assistance in Case of Disagreement: ICSID , International Center for settlement of Investment Disputes
ICCWBO , International court of arbitration, International chamber of commerce
Member of the Multilateral Investment Guarantee Agency: Yes

Country Comparison For the Protection of Investors

	Morocco	Middle East & North Africa	United States	Germany
Index of Transaction Transparency*	7.0	6.3	7.0	5.0
Index of Manager’s Responsibility**	2.0	4.6	9.0	5.0
Index of Shareholders’ Power***	1.0	3.4	9.0	5.0
Index of Investor Protection****	3.3	4.8	8.3	5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Procedures Relative to Foreign Investment

Freedom of Establishment: Guaranteed except for the agricultural sector
Acquisition of Holdings: Majority acquisition of interest in an existing or forming Moroccan company, is authorised by way capital subscription or acquisition of already issued securities.
Obligation to Declare: Investment system in Morocco is very open as investors do not have to obtain prior approval: they simply have to send the Foreign Exchange Office a report in the six months following the completion of the operation.
Competent Organization For the Declaration: Foreign exchange office
Requests For Specific Authorizations: The financial sector has specific regulations, that of hydrocarbons as well as for free zones.

Office Real Estate and Land Ownership

Possible Temporary Solutions: There are many business domiciliation companies, in particular Sodrein or still Le Domicile d'Affaires offering a range of services to all.
The Possibility of Buying Land and Industrial and Commercial Buildings: Guaranteed except for the agricultural sectors
Risk of Expropriation: Weak. Investments are guaranteed by the Investment Charter.

Investment Aid

Forms of Aid: Generally contributions to finance reception infrastructures, as also in acquisition of land and construction of professional buildings.
Privileged Domains: Either loans or assistance to finance infrastructures.
Privileged Geographical Zones: New Information and Communication Technologies (NITC)
Exporting industries, in particular aeronautics and automobile
Tourism
Free Zones: There are industrial parks (Bouskoura, Meknès, etc.), technoparks (Casa Technopark) and free zones (that of Tangier particularly enjoying tax and special customs benefits.
Organizations Which Finance: The Investments Commission, the Hassan II Funds for Economic and Social development and Funds of Promotion of Investments managed by the Department of Investments.
The French Development Agency on behalf of its subsidiary company Proparco.

Investment Opportunities

The Key Sectors of the National Economy: Textile-clothing, tourism
High Potential Sectors: Call centers, high-technology, agriculture
Privatization Programs: Since the last few years, Morocco has launched an ambitious programme of privatisation in many sectors of the economy. The largest operations were carried out in the sectors of mobile telephony, finance, tobaccos and water supply.
In 2008, privatisations related to food processing sector (seeds and salts in particular) as well as that of construction materials and textiles.
A partial privatisation of the Moroccan office of phosphates as well as the Royal Air Maroc is expected.
Tenders, Projects and Public Procurement: Tenders Info, Tenders in Morocco
DgMarket, Tenders Worldwide

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors: Mining sector, Postal services
Sectors in Decline: Textile-clothing, fishing

Finding Assistance For Further Information

Investment Aid Agency: Department of Investments (In French)
French Agency of Development
ANIMA Investment Network
Medibtikar
Other Useful Resources: Department of Investments
Economic Developments and Prospects in Morocco - African Economic Outlook
Doing Business Guides: ANIMA Investment Network
Morocco Commercial Guide 2010 - Buy USA

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