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Company Formation in Morocco

Overview :

Strategically located less than three hours from the main European cities, Morocco is one of the most dynamic countries in the African continent. Morocco offers several advantages for international business and is becoming a popular destination for companies to start operations. Morocco has a well educated and flexible workforce, business friendly laws and regulations, a stable political environment and infrastructure that supports trade and efficient moment of goods.

While many countries grappled with global economic downturn in 2009, Morocco proved resilient to the crisis and expanded by more than 4%. In the same time, unemployment fell to record low decreasing to 9.1% even as foreign demand slid and capital transfer slowed. This was largely due to strict control on currency exchange and the capital market limited interrelation with world economy.

Among the UE, France and Spain assume the most prominent roles, in parts due to their colonial legacy and their proximity. Some 500 French companies have established subsidiaries in the kingdom, employing more than 114,000 people and ten thousands of French citizens have taken up residency in the country. Spain is the second largest supplier of Moroccan territory and hundreds of Spanish businesses operate in the country. Further afield, Morocco enjoys ties with the US. The kingdom was in fact the first country to seek diplomatic relations with US government in 1777.

Advantages of incorporating business in Morocco :
  • Great political and institutional stability based on a continuous process of democratization.
  • Institutional support and attractive legal framework.
  • A policy of structural reforms and liberalization of the economy.
  • An educated, qualified and cheap labour force; Geographical proximity to Europe.
  • Sound infrastructure.
  • A total of 16 Regional Investment Centres to ensure speedy company registration and business troubleshooting.
  • Inflation and debt under control.

Tax Regime in Morocco :
  • The corporate tax rate is 30%.
  • The income tax rate is 38%.
  • The sales tax/Vat rate is 20%.
Types of Entities

Under Moroccan law, the primary types of corporate structures available are: limited liability companies; private limited companies; limited partnerships with shares; general and limited partnerships; and joint ventures, all of which generally conform to Western company forms of the same nomenclature. The two most widely used are the SA and the SARL. Below are the features of main legal entity forms of business units in Morocco.

Public Limited Company Plc (SA) :

Certain companies especially of great dimension require large capital sums. It may be therefore be necessary to call upon a great number of associates. By limiting the liability of shareholders to the contributed capital it makes it possible to increase ad infinitum the number of its associates.  In such form of companies Liability of shareholder is limited to the capital contribution. Shares representing authorised share capital can either be nominal or either in bearer’s   name, the minimum value of share being MAD 50.

Limited Liability Company (SARL) :

It has the characteristics of both joint stock companies and partnerships at the same time. Minimum number of associates required is two or one (in the single case of single associates) and     maximum is 50. Liability is Limitedto the assets of the associates. If contribution in kind, the associates are jointly liablefor the value allotted to the contributions.

Partnership SNC (collective company) :

This legal form is appropriate more particularly for   companies of small size. It has the following characteristic; Requirements of such entities are-

Associates – minimum two and both must be tradesmen

Liability – Unlimited and interdependent liability of the associates (the associates are       interdependent persons liable with regards to their property as well as the debts of the company)

Management: One or more managers named by statutes. In the absence of nomination by statutes, management is deemed joint.

Limited Partnership (including shareholders) :

It is legal category combining the characteristic of  a collective company (SNC), given the presence of active unlimitedly liable associates involved in business management, and a plc, given the presence of associates (sleeping partner) who holds freely negotiable shares not requiring the preliminarily assent of the other associates.             

Limited Partnership (LPs):

Company made up between sleeping partners, contributing funds and a jointly liable for their management. The active managers are deemed tradesmen.

Foreign Branch: 

The foreign parent company may operate in Morocco via a branch or a permanent establishment.

Sole proprietorship:

It is a business owned by single person who directs and decides all matter relating to it. Legally this type of business has no existence distinct that from its owners, its profits are regarded as incomes of its owners.

Usually, Incorporating a Company takes about 10-12 days to in Morocco.