Morocco flag Morocco: Investing in Morocco

Foreign direct investment (FDI) in Morocco

FDI in Figures

According to UNCTAD's World Investment Report 2021, FDI flows to Morocco stood almost unchanged at USD 1.8 billion in 2020. The stock of FDI reached USD 72 billion in 2020. Morocco's FDI profile is quite diversified, with a consolidated presence of some large multinationals in manufacturing industries, including automotive, aerospace and textiles. The long-term commitment of these companies in the country, along with steady inflows into phosphate mining - as Morocco holds the largest reserves - eased the decline in cross-border investment inflows despite the global crisis due to the Covid-19 pandemic. According to data from the Moroccan Foreign Exchange Office, France, Spain, the UAE, the UK and Luxembourg have the majority of FDI stocks. The insurance sector had the lion's share of FDI in recent years, mostly due to the acquisition of the Moroccan insurance firm Saham by the South African Sanlam via its Ireland-based asset fund for USD 1 billion. Nevertheless, agriculture has the highest share of FDI stocks, followed by financial and insurance activities, mining and quarrying, ICT and wholesale and retail trade. According to the latest figures from the Moroccan Foreign Exchange Office, in the first eleven months of 2021 FDI flows to Morocco increased by 13.9% compared to the same period one year earlier (to MAD 17 billion), whereas Moroccan investments abroad reached MAD 16.1 billion, the highest level in the last five years.
After the positive results of the Industrial Acceleration Plan 2014-2020, a vast project of economic modernisation to attract more FDI, the government launched a second phase for 2021-2025 focused mainly on the consolidation of the achievements made within the framework of the first phase of the plan (which, among other results, created 54 industrial systems in partnership with 32 professional associations and universities in various sectors) and their generalization to all regions, by integrating small and medium enterprises and by placing industry at the heart of technological transformations. Among the reasons to invest in Morocco there are the relatively low cost of labour, its strategic location, between Europe and sub-Saharan Africa, good infrastructures and the stability of the country’s currency and political framework. On the other hand, Morocco still has significant social and regional disparities, weak productivity and low competitiveness and an economy heavily reliant on the price of hydrocarbons and the agricultural sector. Morocco is ranked 53rd out of 190 economies by the World Bank in its latest Doing Business report, gaining seven spots compared to 2019, and up by 40 spots from 2012. This improvement has been made thanks to better access to electricity (generalising online applications for new connections and expanding the use of prebuilt transformers). Dealing with construction permits has also been eased by improving the dedicated online platform.

 
Foreign Direct Investment 201920202021
FDI Inward Flow (million USD) 1,7201,4192,153
FDI Stock (million USD) 66,55171,97572,941
Number of Greenfield Investments* 1116252
Value of Greenfield Investments (million USD) 3,0692,4691,816

Source: UNCTAD, Latest available data

Note: * Greenfield 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.

 
Country Comparison For the Protection of Investors Morocco Middle East & North Africa United States Germany
Index of Transaction Transparency* 9.0 6.4 7.0 5.0
Index of Manager’s Responsibility** 2.0 4.8 9.0 5.0
Index of Shareholders’ Power*** 7.0 4.7 9.0 5.0

Source: Doing Business, Latest 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.

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What to consider if you invest in Morocco

Strong Points

Morocco's strengths for FDI are:

  • A legal framework and assistance measures very favourable to investors
  • Relatively low labour cost
  • A strategic location, between Europe and sub-Saharan Africa 
  • Robust infrastructure
  • A young and relatively well-trained population
  • Political stability encouraged by the popularity of the King, Mohammed VI
Weak Points

The main obstacles to the development of FDI in Morocco are:

  • A relatively small internal market
  • A country still highly dependent on agriculture and therefore vulnerable to natural disasters and the price of hydrocarbons
  • Administrative burdens slowing down, among other things, the start of business activities
  • Significant social disparities by region (rural vs. urban) and a high poverty rate
  • High unemployment rate and low productivity
  • Weak intellectual property rights protection
  • A lack of transparency in public procurement
Government Measures to Motivate or Restrict FDI

The Moroccan government actively encourages foreign investments. The "Investment Charter" of 1995 is the main legal source for FDIs. This charter mainly provides company exemptions for VAT and for corporate tax for 5 years under certain conditions.
In the industrial sector, the Industrial Acceleration Plan 2014-2020 aimed at establishing “ecosystems” that integrate value chains and supplier relationships between large companies and SMEs; and the government announced a new Acceleration Plan for the period 2021-2025.
Morocco has implemented reforms to reduce company registration fees, eliminate minimum capital requirements for limited liability companies and facilitate business registration. Companies in the “Industrial Acceleration Zones” enjoy a 15% corporate tax rate following an initial five years of exemption, whereas companies in the Casablanca Finance City (CFC) are tax exempt for the first five years, then are subject to tax at a 15% rate both on their local and export activities.
The Moroccan government can sign specific agreements and contracts with investors, providing subsidies for certain expenses, custom duty and VAT exemptions when the agreed criteria are met.
Each of the 12 regions into which the country is divided has the authority to develop its own investment promotion campaigns.

Bilateral investment conventions signed by Morocco
To see the list of investment treaties signed by Morocco, consult UNCTAD's International Investment Agreements Navigator.

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Latest Update: June 2022

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