Morocco flag Morocco: Investing in Morocco

Foreign direct investment (FDI) in Morocco

FDI in Figures

According to UNCTAD's World Investment Report 2023, FDI flows to Morocco saw a marginal decline of 6% in 2022, totalling USD 2.1 billion. However, announced greenfield investments in the country quadrupled to USD 15 billion, driven in part by Total Eren (Luxembourg), which intends to construct a hydrogen and green ammonia production facility in Morocco with an investment exceeding USD 10 billion. In the same year, the total stock of FDI stood at USD 63.2 billion. The main investing countries in terms of stock are France (30.8%), the UAE (20.3%), Spain (8%), Switzerland (5.7%), and the U.S. (5%); whereas the sectors receiving the most FDI are industry (almost one-fourth), real estate (20%), communication (12.4%), tourism (9.5%), energy and mining (6.4%), and banking (5.7% - data Foreign Exchange Office). In 2022, Morocco has attracted nearly USD 34 billion in greenfield FDI projects, double the previous record set in 2008. Chinese companies, especially in the electric vehicle supply chain, have significantly contributed to this surge. Notable projects include Gotion High-Tech's agreement with the Moroccan government for its first African gigafactory and Huayou Cobalt's plan to invest USD 19.5 billion in an electric vehicle battery components factory. The country has also secured major FDI ventures in renewable energy, chemicals, and tourism. According to the latest figures from the Moroccan Foreign Exchange Office, in the first half of 2023, Morocco recorded a net inflow of foreign direct investments of MAD 16.3 billion, down by 57.2% from the same period one year earlier.

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 ranks 70th among 132 economies on the Global Innovation Index 2023, 101st out of 184 on the 2023 Index of Economic Freedom, and 94th out of 180 on the Corruption Perception Index.

 
Foreign Direct Investment 202020212022
FDI Inward Flow (million USD) 1,4192,2662,141
FDI Stock (million USD) 71,97572,99463,278
Number of Greenfield Investments* 625271
Value of Greenfield Investments (million USD) 2,6593,77515,328

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: March 2024

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