Attractive incentives for your projects
In addition to the tax exemptions granted under the common law, Moroccan law provides specific financial, tax and customs advantages to investors, as part of agreements or investment contracts to be concluded with the State, provided that they meet the required criteria. (Download the Factsheet Investment Incentives)
- The contribution of the state to certain investment expenses: Investment Promotion Fund;
- The contribution of the state to certain expenses for the promotion of investment in specific industrial sectors and the development of modern technologies: the Hassan II Fund for Economic and Social Development;
- Exemption from customs duties under Article 7.I of the Finance Act No. 12/98;
- Exemption from import VAT under Section 123-22 °-b of the General Tax Code.
These four advantages can be benefited from in a single investment project. And for more information on each of these advantages:
Investment Promotion Fund
The Investment Promotion Fund (IFP) manages operations relating to the state’s taking charge of the cost of some advantage granted to the investments that meet the criteria, within the framework of contracts, and in accordance with the investment charter and its implementation decree:
- Land support: the IFP takes charge of 20% of the expenses of land acquisition necessary for the realization of the investment;
- External infrastructure: the IFP participates in the expenses of external infrastructure with up to 5% of the overall amount of the investment program;
- Training: the IFP participates in the expense of vocational training provided as part of the investment program with up to 20% of the cost of this training.
These advantages are cumulative, provided that the state’sparticipation does not exceed 5% of the total investment program. However, if the investment project is expected in a suburban or rural area or in the case of investment in spinning, weaving and textiles finishing, the participation of State may reach 10% of the total investment program.
The investment project must meet at least one of the following criteria:
- Invest an amount equal to or greater than MAD 200 million,
- Create a number of stable jobs equal to or above 250;
- Realize the project within one of these provinces or prefectures: Al Hoceima, Berkane, Boujdour, Chefchaouen, Es-Smara, Guelmim, Laayoune, Larache, Nador, Oued Ed-Dahab, Oujda-Angad, Tangier-Asilah, Fahs-Bni-Makada, Tan-Tan, Taounate, Taourirt, Tata, Taza and Tetouan;
- Ensure transfer of technology;
- Contribute to the environment protection
· Hassan II Fund
Hassan II Fund for Economic and Social Development (FHII) grants financial assistance for investment projects in some industrial sectors for:
- Building or acquiring professional buildings: the Fund can support up to 30% of the cost of professional buildings on the basis of a maximum unit cost of 2,000 MAD/m2 (excluding taxes);
- Acquiring new equipment goods: the Fund may contribute up to 15% of the purchase cost of new equipment goods (excluding import duties and taxes).
These contributions are limited to 15% of the investment amount and 30 million MAD.
The relevant sectors are:
- Manufacturing equipment for the car industry
- Manufacturing components for electronic assemblies and subassemblies
- Manufacturing equipment for the aviation industry
- Manufacturing activities related to nanotechnology, microelectronics and biotechnology
- Manufacturing tools and mould for the car and the aircraft industry
- Aeronautical maintenance and planes dismantling
The beneficiary projects are the new investment projects (creation or extension) with a total investment amount of more than 10 million MAD (excluding import duties and taxes) and under the condition that the amount of investment in equipment goods is above 5 million MAD (excluding import duties and taxes).
- The projects in the aircraft industry which the investment amount in capital goods is upper to 200 million dirhams (except import duties and tax) can be realized in one or several phases considering each of the phases as eligible project for the Fund contribution.
- The eligible investment projects in the manufacturing equipments activities for the car industry benefit from a maximal contribution of 15 % to the acquisition of the imported capital goods used in the deep-drawing activities, the plastic injection and tools and moulds manufacturing.
· Import Duty Exemption
Businesses that commit to making an investment of an amount equal to or greater than two hundred (200) million dirhams can benefit, as part of agreements to be concluded with the government, from exemption from import duty and the value added tax applicable to goods, materials and tools needed for their project and imported directly by the companies or on their behalf.
This exemption is also granted to the parts, spare parts and accessories imported at the same time as capital goods, machinery and equipment for which they are intended. The investment must be made within thirty-six (36) months from the date of the signature of the abovementioned agreement.
· VAT Exemption
Equipment goods, materials and tools needed to achieve investment projects involving an amount higher than or equal to MAD 200 million are exempt from VAT on imports within the framework of an agreement concluded with the State, in favor for the beneficiaries during a period of thirty six (36) months from the start of business. This exemption is also granted to parts, spare parts and accessories imported at the same time as the aforesaid equipment.
Your investments are guaranteed and protected:
nternational conventions relating to the guarantee and protection of investments
As part of foreign investment promotion efforts, Morocco has ratified international conventions relating to the guarantee and protection of investment. These include agreements on the establishment of :
- The International Center for Settlement of Investment Disputes “ICSID”
- The Multilateral Investment Guarantee Agency “MIGA”
- The Inter-Arab Organization for Investment Guarantee Corporation
Bilateral agreements and conventions relating to the guarantee and protection of investment
The promotion of foreign investment in Morocco is not only limited to the adherence to international multilateral conventions but extends to the bilateral ones, as part of strengthening relations with key partners. So many treaties, agreements and conventions for the promotion and protection of investments and avoidance of double taxation have been signed throughout the recent decades.
Agreements and conventions related to promotion and investment protection
The main provisions of these agreements and conventions concern the following aspects:
- Treatment of permitted investments
- Free transfer of capital and income
- The non-expropriation of investment, except for public utility reasons and following a court decision (on a nondiscriminatory basis and to pay a prompt and adequate compensation)
- Disputes with recourse to domestic courts or international arbitration at the choice of the investor
Non-double Taxation Agreements
Morocco has signed agreements with several countries to avoid double taxation with respect to income tax. These agreements establish the list of taxes and income concerned, the rules for mutual administrative assistance and the principle of non-discrimination.
Investor protection under the law
The investment charter has set up a regime of convertibility for foreign investment. This scheme allows investors to freely carry out their investment in Morocco and transfer, directly through the banking system, revenues generated by these investments and the proceeds of their sale or liquidation.
Steady Reinforcement of Morocco’s Attractiveness
In order to ensure a clear and transparent framework for investment for the benefit of national and international operators, the National Committee of Business Environment was created in December 2009.
This high-level body is chaired by the Prime Minister. It is composed of representatives of public and private sectors and aims to identify and implement measures to enhance Morocco’s attractiveness.
For further information, visit the Committee’s website: www.climatdesaffaires.ma