INVESTOR'S GUIDE
General Information
The Kingdom of Morocco is in the process of implementing reforms to modernize its economy and to open itself to the rest of the world.
The reforms concern:
- Regulatory aspects, particularly the investment charter, fiscal regimes, customs, external commerce, external investments, labor legislation and the judicial system.
- The setting up of regional investment centers with the principal objective being the promotion of investments;
- The privatization of agricultural land that is privately owned by the State
Investment Charter This charter, which is governed by Law 18-95, offers:
- Fiscal advantages;
- The freedom to transfer profits and capital;
- The partial refunding of the development of industrial parks by the State;
- Orientation and assistance of investors;
- The simplification and lightening of administrative procedures relative to investments;
- The promotion of offshore financial centers, free zones for exports and the regulation of free zone industrial warehousing.
Main clauses of the Investment Charter, law number 18-95
Exonerations
- Value-added tax (TVA) for material and equipment acquired locally or imported
- Business license ("Patente") during the first 5 years for industry and all other commercial activity
- Urban taxes for the first 5 years for new buildings and additions to existing buildings
- Corporation Taxes (IS) or General Income Taxes (IGR) for export companies
Reductions
- Import duties: 2.5% or 10% for material and equipment
- 50% of the corporate taxes (IS) or the General Income Tax (IGR) for export companies after the exonerated first 5 years, and during the first 5 years for arts and crafts companies and for companies installed in the Northern, Southern and Oriental provinces.
Other Advantages
- Preparation of a provision for investment from 20% of profits and up to a maximum of 30% of the projected investment.
- Digressive amortization of equipment
- Guarantee for the transfer of profits and of liquidation gains for foreign investments financed in foreign currency
-Partial refund by the State, in the framework of State-Corporation contracts, of:
+ 20% of the acquisition cost of land destined to the creation of investment projects;
+ 05% of the amount of the investment project for expenses related to external infrastructure;
+ 20% of the cost of professional training;
+ Partial refund, by the State, of the cost of setting up of industrial parks in the Northern, Southern and Oriental provinces.
Fiscal Plan
Measures that foster the promotion of investments are part of the Investment Charter. These apply to all sectors of activity, with the exception of the agriculture sector, which is has its own particular Fiscal Plan.
The principal measures concern:
For the agriculture sector:
- Agricultural material, inputs, irrigation equipment, livestock, animal feed and materials for raising and breeding animals are subject to a minimum importation duty of 2,5%.
- Irrigation equipment and greenhouses benefit from the clauses of decree number 2-83-605 established on July 29th, 1983, without a prior approval from the Minister of Industry.
- Drilling and sounding equipment for use in the search and use of ground water benefits from the clauses of the decree number 2-84-835 established on December 28th 1984, including a permanent favorable approval from the Minister of Industry;
- Exoneration of the T.V.A. (value-added tax) for the near totality of agricultural inputs and material, irrigation equipment, materials for the raising and breeding of livestock, etc.;
- The companies whose primary or complementary activity is agriculture are exonerated of agricultural revenues, as of December 31st 2010.
- The refrigeration units and packaging stations are exonerated from the corporate income taxes, when they are situated on the production site and are destined to the conservation or packaging of farm products.
For companies exporting their services:
These companies benefit on the revenues earned from exportation, with particular rebates of up to the total exoneration of income taxes for corporate and general taxes on revenues during a period of the first 5 years and with a reduction of 50% beyond that period. The rate of income tax for corporations is 35%, the maximum rate of general income tax is set at a maximum of 41,5%.
Investment plan for foreigners
The terms governing the investments made by foreigners rests upon the general policies between Morocco and the foreign investor. Foreign investors benefit:
- From the transfer of invested capital without limitations as to revenues;
- From the freedom to undertake termination of investment activity transactions;
- From a guarantee that invested funds can be retransferred;
- from no restrictions in terms of exchanging currency during importation;
- from a completely liberal system in terms of exporting goods and services ; this does not require prior approval from the change office.
Cost of Principal Production Factors
Cost of Irrigation Water
Defined Irrigation Perimeters
Surface water (Pumping fee in Dirhams/m3) : 0,06
Electricity
The table below gives the basic maximum fee for high tension (HT), very high tension (THT) and medium tension (MT).
Road Transport:
On routes through the plains, the base rate per ton per kilometer is fixed at 0,401 dirhams for a distance of between 151 and 175 km. This rate is multiplied by a coefficient that varies between 3,77 and 0,88 in function of the total distance.
These prices may be increased:
- for difficult itineraries : the increases in price vary from 30% for a poorly maintained road or a good dirt road to 125% for a very difficult dirt road or trail.
- for the weight of the cargo: the increase in price varies from 15% to 100% (15% for a load between 4001 and 8000 kg; 100% for a load less than or equal to 100 kg with a minimum of 25 kg).
Railway Transport:
The applicable scales for the transportation of merchandise for full, ventilated wagons are as follows:
- Scale 1: 0,404 DH per Ton/km
- Scale 2: 0,364 DH per Ton/Km
- Scale 3: 0,312 DH per Ton/Km
- scale 4: 0,269 DH per Ton/Km
- To these prices, a fixed amount must be added of 12,75 dirhams/ton for full-wagons ;
- 25,51 dirhams/ton for smaller amounts.
- The TVA (value added tax) of 14% is added to the total amount.
Air Transport
The air transport rates are fixed for departure from Casablanca depending on the type, weight and destination of the merchandise.
The general rate from Casablanca, in dirhams/kg, for 500 kg and more:
Bordeaux –Paris –Rome : 10,00 – 11,80 – 12,15 - London –Amsterdam : 15,45 – 15,50 - Barcelona –Tunis : 8,35 – 8,40 - Montreal –New York : 21,00 – 21,80 - Jeddah : 36,25
Maritime Transport
Maritime transport, from Casablanca to the following destinations:
- European Union: 110 € / ton
- Canada: 130 € / ton
- Middle East: 160 € / ton
Salaries and overheads for laborers
Company work relations
Permanent worker: permanent work position as decided upon by the company
Occasional worker: daily recruiting depending on the company’s needs
Generally speaking, company work relations are governed by the labor legislation in effect.
Agricultural education system
- 3 higher education establishments (300 veterinarian engineers and doctors per year);
- 43 professional training establishments (1700 technicians and specialized technicians and 500 specialized workers)
- 9 high schools specializing in Technical Agricultural Training
Post-Secondary Agricultural Education
- The existing establishments :
The Institut Agronomique et Vétérinaire Hassan II : Rabat and Agadir
L'école Nationale d'Agriculture : Meknes
L'Ecole Nationale Forestière d'Ingénieurs : Salé and Ifrane
- Total capacity : 2800 students
- Diplomas granted :
Engineer (Agronomic, Topography, Agro-Industrial and Alimentary, Rural and Forestry Engineering)
Doctor of Veterinarian Medicine
Master's and Specialized Master's
Doctor of Agronomical Science
Specialized Horticultural Technician
- Number of Teachers and Graduates (2008-2009)
Portrait of Professional Training
Professional Training in Agriculture is dispensed by 43 training centers including :
• 8 Institutes of Agricultural Technology Specialized in Agriculture (ITSA), that train specialized technicians, general technicians and qualified workers;
• 13 Institutes of Agricultural Technology (ITA) that train technicians and specialized workers;
• 22 Agricultural Qualification Centers (COA) that offer training;
• 1.500 companies and farms that offer practical training to trainees.
This plan is characterized by two types of training:
• Cooperative training is governed by the Law 36-96. With this type of training, the students spend 50% of their time doing practical training in companies. At this time, there is a network of 1500 companies and farms that assure the trainees' training placement.
• Apprenticeship training is governed by Law 12-00 and its application texts. It is destined to young drop-outs and those who have completed the functional literacy program, especially the sons of agriculturalists who wish to take over their parents' role as heads of a family-owned agricultural farm.
The Kingdom of Morocco is in the process of implementing reforms to modernize its economy and to open itself to the rest of the world.
The reforms concern:
- Regulatory aspects, particularly the investment charter, fiscal regimes, customs, external commerce, external investments, labor legislation and the judicial system.
- The setting up of regional investment centers with the principal objective being the promotion of investments;
- The privatization of agricultural land that is privately owned by the State
Investment Charter This charter, which is governed by Law 18-95, offers:
- Fiscal advantages;
- The freedom to transfer profits and capital;
- The partial refunding of the development of industrial parks by the State;
- Orientation and assistance of investors;
- The simplification and lightening of administrative procedures relative to investments;
- The promotion of offshore financial centers, free zones for exports and the regulation of free zone industrial warehousing.
Main clauses of the Investment Charter, law number 18-95
Exonerations
- Value-added tax (TVA) for material and equipment acquired locally or imported
- Business license ("Patente") during the first 5 years for industry and all other commercial activity
- Urban taxes for the first 5 years for new buildings and additions to existing buildings
- Corporation Taxes (IS) or General Income Taxes (IGR) for export companies
Reductions
- Import duties: 2.5% or 10% for material and equipment
- 50% of the corporate taxes (IS) or the General Income Tax (IGR) for export companies after the exonerated first 5 years, and during the first 5 years for arts and crafts companies and for companies installed in the Northern, Southern and Oriental provinces.
Other Advantages
- Preparation of a provision for investment from 20% of profits and up to a maximum of 30% of the projected investment.
- Digressive amortization of equipment
- Guarantee for the transfer of profits and of liquidation gains for foreign investments financed in foreign currency
-Partial refund by the State, in the framework of State-Corporation contracts, of:
+ 20% of the acquisition cost of land destined to the creation of investment projects;
+ 05% of the amount of the investment project for expenses related to external infrastructure;
+ 20% of the cost of professional training;
+ Partial refund, by the State, of the cost of setting up of industrial parks in the Northern, Southern and Oriental provinces.
Fiscal Plan
Measures that foster the promotion of investments are part of the Investment Charter. These apply to all sectors of activity, with the exception of the agriculture sector, which is has its own particular Fiscal Plan.
The principal measures concern:
For the agriculture sector:
- Agricultural material, inputs, irrigation equipment, livestock, animal feed and materials for raising and breeding animals are subject to a minimum importation duty of 2,5%.
- Irrigation equipment and greenhouses benefit from the clauses of decree number 2-83-605 established on July 29th, 1983, without a prior approval from the Minister of Industry.
- Drilling and sounding equipment for use in the search and use of ground water benefits from the clauses of the decree number 2-84-835 established on December 28th 1984, including a permanent favorable approval from the Minister of Industry;
- Exoneration of the T.V.A. (value-added tax) for the near totality of agricultural inputs and material, irrigation equipment, materials for the raising and breeding of livestock, etc.;
- The companies whose primary or complementary activity is agriculture are exonerated of agricultural revenues, as of December 31st 2010.
- The refrigeration units and packaging stations are exonerated from the corporate income taxes, when they are situated on the production site and are destined to the conservation or packaging of farm products.
For companies exporting their services:
These companies benefit on the revenues earned from exportation, with particular rebates of up to the total exoneration of income taxes for corporate and general taxes on revenues during a period of the first 5 years and with a reduction of 50% beyond that period. The rate of income tax for corporations is 35%, the maximum rate of general income tax is set at a maximum of 41,5%.
Investment plan for foreigners
The terms governing the investments made by foreigners rests upon the general policies between Morocco and the foreign investor. Foreign investors benefit:
- From the transfer of invested capital without limitations as to revenues;
- From the freedom to undertake termination of investment activity transactions;
- From a guarantee that invested funds can be retransferred;
- from no restrictions in terms of exchanging currency during importation;
- from a completely liberal system in terms of exporting goods and services ; this does not require prior approval from the change office.
Cost of Principal Production Factors
Cost of Irrigation Water
Defined Irrigation Perimeters
| ORMVA/Tariffs by zone | Total fees DH/m3 | |
| Gharb | BBeht without pumping Beht with pumping PTI et STI sprinkling PTI et STI sprinkling |
0,22 0,27 0,25 0,45 |
| Souss-Massa | Massa. Souss upstream Issem rotation crops Issam planted Issem traditional |
0,20 0,20 0,56 0,53 0,18 |
| Loukkos | Rmel Drader Plains and low hills Gravitational sectors in plains (RD)... Moulouya Gravitational sectors Gravitational sectors with pumping (High Service Triffa) Garet perimeter |
0,46 0,46 0,27 0,23 0,41 0,48 0,18 |
| Haouz | Haouz central Tessaout upstream Tessaout downstream |
0,21 0,21 0,18 |
Electricity
The table below gives the basic maximum fee for high tension (HT), very high tension (THT) and medium tension (MT).
| Basic Fees in DH – all taxes incl. | HT and THT | M.T |
| Annual energy service fees (DH/KVA.AN) |
280 | 291 |
| Monthly consumption fees (DH/KWH) - Peak hours (HP) - Busy hours (HPL) - Off-peak hours(HC) |
1,0393 0,8271 0,6401 |
1,1657 0,9245 0,6369 |
Road Transport:
On routes through the plains, the base rate per ton per kilometer is fixed at 0,401 dirhams for a distance of between 151 and 175 km. This rate is multiplied by a coefficient that varies between 3,77 and 0,88 in function of the total distance.
These prices may be increased:
- for difficult itineraries : the increases in price vary from 30% for a poorly maintained road or a good dirt road to 125% for a very difficult dirt road or trail.
- for the weight of the cargo: the increase in price varies from 15% to 100% (15% for a load between 4001 and 8000 kg; 100% for a load less than or equal to 100 kg with a minimum of 25 kg).
Railway Transport:
The applicable scales for the transportation of merchandise for full, ventilated wagons are as follows:
- Scale 1: 0,404 DH per Ton/km
- Scale 2: 0,364 DH per Ton/Km
- Scale 3: 0,312 DH per Ton/Km
- scale 4: 0,269 DH per Ton/Km
- To these prices, a fixed amount must be added of 12,75 dirhams/ton for full-wagons ;
- 25,51 dirhams/ton for smaller amounts.
- The TVA (value added tax) of 14% is added to the total amount.
Air Transport
The air transport rates are fixed for departure from Casablanca depending on the type, weight and destination of the merchandise.
The general rate from Casablanca, in dirhams/kg, for 500 kg and more:
Bordeaux –Paris –Rome : 10,00 – 11,80 – 12,15 - London –Amsterdam : 15,45 – 15,50 - Barcelona –Tunis : 8,35 – 8,40 - Montreal –New York : 21,00 – 21,80 - Jeddah : 36,25
Maritime Transport
Maritime transport, from Casablanca to the following destinations:
- European Union: 110 € / ton
- Canada: 130 € / ton
- Middle East: 160 € / ton
Salaries and overheads for laborers
| Agricultural Sector | Industrial Sector | ||
| Minimum wage | * as of July 1, 2004 | 50 dh/day (SMAG) | 9,22 dh/hour (SMIG) |
| Seniority bonuses | * 2 years * 5 years * 12 years * 20 years * 25 years |
5% 10% 15% 20% 25% |
5% 10% 15% 20% 25% |
| Social Security | * employee's contribution * employer's contribution |
4,29% 8,60% |
4,29% 17,16% |
| Benefits paid by the CNSS |
- * Sick day benefits (I.J.M.) - * Maternity leave daily benefit - * Pension for surviving spouse - * Retirement pension - * Invalidity - * Family allowance |
- 66,66 % of daily salary (for a maximum of 2 years) starting on the 4th day - 100 % of daily salary (during 98 days) - 50 to 70% of salary to a maximum of 6000 dh - 50 to 70% of salary to a maximum of 6000 dh - 50 to 70% of salary up to a maximum of 6000 dh - not granted |
- 75 % of daily salary (for a maximum of 2 years) - 100 % of daily salary (for 98 days) - 50 to 70% of salary to a maximum of 6000 dh - 50 to 70% of salary to a maximum of 6000 dh - 50 to 70% of salary up to a maximum of 6000 dh - first 3 children 150,00 dh - 3 following children 36,00 dh |
Company work relations
Permanent worker: permanent work position as decided upon by the company
Occasional worker: daily recruiting depending on the company’s needs
Generally speaking, company work relations are governed by the labor legislation in effect.
Agricultural education system
- 3 higher education establishments (300 veterinarian engineers and doctors per year);
- 43 professional training establishments (1700 technicians and specialized technicians and 500 specialized workers)
- 9 high schools specializing in Technical Agricultural Training
Post-Secondary Agricultural Education
- The existing establishments :
The Institut Agronomique et Vétérinaire Hassan II : Rabat and Agadir
L'école Nationale d'Agriculture : Meknes
L'Ecole Nationale Forestière d'Ingénieurs : Salé and Ifrane
- Total capacity : 2800 students
- Diplomas granted :
Engineer (Agronomic, Topography, Agro-Industrial and Alimentary, Rural and Forestry Engineering)
Doctor of Veterinarian Medicine
Master's and Specialized Master's
Doctor of Agronomical Science
Specialized Horticultural Technician
- Number of Teachers and Graduates (2008-2009)
| Establishment | Teachers / Researchers | Graduates (bac+6 & bac +5) |
| IAV Hassan II | 254 | 411 |
| ENA Meknes | 56 | 122 |
| ENFI | 25 | 24 |
| 335 | 557 |
Portrait of Professional Training
Professional Training in Agriculture is dispensed by 43 training centers including :
• 8 Institutes of Agricultural Technology Specialized in Agriculture (ITSA), that train specialized technicians, general technicians and qualified workers;
• 13 Institutes of Agricultural Technology (ITA) that train technicians and specialized workers;
• 22 Agricultural Qualification Centers (COA) that offer training;
• 1.500 companies and farms that offer practical training to trainees.
This plan is characterized by two types of training:
• Cooperative training is governed by the Law 36-96. With this type of training, the students spend 50% of their time doing practical training in companies. At this time, there is a network of 1500 companies and farms that assure the trainees' training placement.
• Apprenticeship training is governed by Law 12-00 and its application texts. It is destined to young drop-outs and those who have completed the functional literacy program, especially the sons of agriculturalists who wish to take over their parents' role as heads of a family-owned agricultural farm.
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