2013 Investment Climate Statement - Morocco

2013 Investment Climate Statement
Bureau of Economic and Business Affairs
February 2013

Openness to, and Restrictions Upon, Foreign Investment

Morocco actively encourages foreign investment and has sought to facilitate it through macro- economic policies, trade liberalization, and structural reforms. The U.S. Free Trade Agreement (FTA) and the Association Agreement with the EU have led Morocco to reduce its tariffs on imports from the U.S. and the EU. Morocco has also signed a quadrilateral FTA with Tunisia, Egypt and Jordan, a bilateral FTA with Turkey, and concluded third round FTA talks with Canada in June, 2012. Additionally, it is seeking trade and investment accords with other African, Asian and Latin American countries. The Joint Committee established by the FTA held its third meeting in December 2012. At that meeting, the United States and Morocco announced agreement on three new initiatives: a Trade Facilitation Agreement, Joint Principles for International Investment, and Joint Principles for Information and Communication Technology (ICT) Services.

The OECD reviewed Morocco’s Investment Policy in 2010. The report stated that the growth of foreign direct investment (FDI) in Morocco reflected the, “significant progress Morocco made in improving investment conditions, especially by enhancing the transparency and predictability of policies and regulations governing investment.” The main outcome was the adoption, in the framework of the U.S. –Morocco FTA, of an approach that removes restrictions in all sectors (except for those specified in a negative list.) As a country that adheres to the OECD’s Declaration of International Investment, Morocco appointed a National Point of Contact (POC) to promote the Declaration’s principles and encourage their use. The Moroccan POC is chaired by the Director General of Morocco’s Investment Development Agency (AMDI). Additionally, in Paris on May 2012, Morocco signed the OECD’s Convention on Propriety, Integrity, and Transparency sending a strong message of their willingness to adopt best practices for a more open and transparent economy.

The U.S.-Morocco FTA has led to more than a quadrupling of bilateral trade and roughly a tripling of both the stock and annual flow of U.S. investment to Morocco. In the World Bank's 2013 "Doing Business" report, Morocco’s overall “Ease of Doing Business” rank dropped four spots from 93 to 97. Although Morocco made great improvements in making “Starting a Business” easier by eliminating the minimum capital requirement for limited liability companies, it also made registering property more costly by increasing property registration fees. The country's excessive bureaucratic red tape continues to be a major constraint on the competitiveness of the economy and deters investors. To facilitate foreign investment, the government has created a number of Regional Investment Centers (CRI) to minimize and accelerate administrative procedures. Investments in excess of 200 million MAD ($26 million) are, in addition, referred to a special ministerial committee chaired by the Prime Minister.

Though not a structural barrier to trade, the Office des Change’s (OC) prepayment limit of shipments is a defacto impediment. According to the OC’s Investment Guide, Moroccan companies can only prepay 40 percent of the total cost of their import shipment, leading them to use letters of credit to finance. This may be problematic for U.S. exporters who require 100 percent advance payment to finance their sales or who prefer markets where letters of credit are not needed to do business.

Morocco's 1995 Investment Charter applies to both foreign and Moroccan investors, with foreign exchange provisions favoring foreign investors. Foreign investment is permitted in nearly every sector. The world's largest phosphate producer, Morocco's Office Cherifien des Phosphates (OCP), has signed several joint venture agreements to set up new fertilizer and chemical plants, a move seen by analysts as a step towards liberalizing the phosphate sector. OCP appears to have shelved previous plans for an initial public offering, however. Additionally, although foreigners are prohibited from owning agricultural land, the law does allow for long-term leases of up to 99 years and permits agricultural land to be purchased for non-agricultural purposes. Morocco has sought to encourage foreign investment in the agricultural sector by making land available for leasing. Agricultural ventures by French, Spanish and Middle Eastern investors are targeted mostly at citrus and olives, with some small investments in grapes and berries.

During the campaign leading up to the November 2011 elections, the mildly Islamist Justice and Development Party promised to battle corruption and create a truly independent judiciary. Morocco’s new 2011 constitution also provides for an independent judiciary and guarantees conditions for a fair trial. In May 2012, Morocco began to review the requirements of judicial reform with the King’s appointment of a 40-member High Commission for Comprehensive Judicial Reform. As part of a national dialogue on judicial reform chaired by Justice Minister Mohammed Ramid that is scheduled to complete its work later this year, the High Commission is examining ways to improve the operations of Morocco’s overburdened court system. . Intended reforms include developing legal and financial regulation that is aligned with international standards to facilitate investment into Morocco.

The King chairs the Higher Council of the Judiciary and appoints half its members, providing him with substantial power over the judiciary. Many local observers have concerns that he remains the ultimate arbiter of justice. In May 2012, members of a group of Moroccan judges from the ‘Judges Club’ signed a petition calling for prosecutors to be allowed to operate independently of the executive branch and for the judicial reform to address corruption in the judiciary and political influence over legal proceedings.

International Rankings/Economic Indicators




Compared to Last Year


TI Corruption Index

88 out of 176

+8 spots


Heritage Economic Freedom

87 out of 179

+6 spots


World Bank Doing Business

97 out of 185

- 4 spots


MCC Gov Effectiveness

69th Percentile

Stayed the same; meets performance standard (MPS)


MCC Rule of Law

69th Percentile

+3 percentiles; MPS


MCC Control of Corruption

72nd Percentile

Stayed the same; MPS


MCC Fiscal Policy

37th Percentile

- 28 percentiles; Does not MPS


MCC Trade Policy

28th Percentile

-32 percentiles; Does not MPS


MCC Regulatory Quality

78th Percentile

- 5 percentiles; MPS


MCC Business Start Up

72nd Percentile

- 6 percentiles; MPS


MCC Land Rights Access

68th Percentile

-9 percentiles; MPS


MCC Natural Resource Protection

31st Percentile

-15 percentiles; Does not MPS


MCC Access to Credit

34th Percentile

Does not MPS


MCC Inflation

97th Percentile


Conversion and Transfer Policies

The Moroccan dirham is convertible for foreign investors for all current-account and selected capital-account transactions. Particularly, capital-account repatriation transactions are convertible if the original investment is registered with the foreign exchange office. Morocco's foreign exchange law enables expatriate employees to repatriate their entire salaries.

Foreign exchange is readily available through commercial banks for the following activities without prior government approval: Remittances by foreign residents; repatriation of dividends and capital by foreign investors; and payment for foreign technical assistance, royalties and licenses.

The Moroccan exchange rate regime is a conventional peg, based on a basket of currencies consisting of the euro and the US dollar, with weights of 80 and 20 percent respectively, broadly reflecting Morocco’s trade flows. The Moroccan dirham thus tends to move in line with the Euro. It fluctuated between 8.3 and 9.1 MAD to the dollar in 2012, with an unofficial average exchange rate for the year of 8.6 MAD to the dollar.

Expropriation and Compensation

The Moroccan Constitution (Article 15) stipulates that no expropriation can take place except in the cases and forms provided by law. The right to own property is guaranteed, but its extent and use may be restricted by law if the needs of economic and social planning and development require it.

Mission Morocco is not aware of any recent, confirmed instances of private property being expropriated for other than public purposes, or being expropriated in a manner that is discriminatory or not in accordance with established principles of international law.

Dispute Settlement

In general, investor rights are backed by an impartial procedure for dispute settlement that is transparent. No U.S. companies had investment disputes with the Government of Morocco in 2010 or 2011, but a few new cases emerged in 2012. U.S. advocacy is continuing to try to resolve them with the relevant government agencies.

While Morocco's commercial and appeals courts have generally improved the dispute settlement climate, Moroccan and foreign companies continue to complain about the inefficiency and the lack of transparency in the judicial system. Among King Mohammed VI's six priority areas identified in a 2012 speech to mark his 13 years on the throne, were improving economic development and ensuring the independence of the judiciary. In late 2009 a National Committee for the Business Environment (CNEA) was created in partnership with the private sector, and it has worked to identify needed reforms and raise awareness of business environment issues nationally and internationally. Recent UN and World Bank studies point to some progress on these issues, though they continue to highlight Morocco's shortcomings in a number of key areas, noting that bankruptcy protection and liquidation procedures are inefficient and that the courts are slow and often fail to enforce legal rulings. To strengthen the justice sector to deliver efficient and transparent services to citizens and businesses, the World Bank approved a $15.8 million Justice Sector Reform Investment Loan in June 2012.

The principal sources of commercial legislation in Morocco can be found in the Dahir of Obligations and Contracts dated 1913 and amended thereafter, in addition to the Code of Commerce dated 1996. According to the European Bank for Reconstruction and Development’s 2012 Morocco Country Assessment Report, the establishment of special commercial courts in 1997 led to some improvement in the handling of commercial disputes; nevertheless, the lack of training for judges on general commercial matters remains one of the key challenges to effective commercial dispute resolution in the country. In general, litigation procedures are time consuming and resource intensive, and there is no legal requirement with respect to case publishing.

In an effort to promote foreign investment, the Moroccan legislature has adopted laws to protect both foreign investors and their Moroccan counterparts. Morocco is a member of the International Center for the Settlement of Investment Disputes (ICSID) and a party to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (with reservations) and the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other states. The Law No. 08-05 issued on Thursday, December 6th 2007, constitutes a new system governing the conventional arbitration and mediation. The law provides significant margin for parties to freely adapt the provisions of the Code of Civil Procedure in their dispute, while providing them with a basic framework for situations they would not have expected. It stipulates that one should avoid cases where a procedure could be simultaneously presented before a court and an arbitration tribunal (or mediator) and creates a list of arbitrators with each court of appeal. Disputes may also be brought before 8 Commercial Courts, (located in Rabat, Casablanca, Fez, Tangier, Marrakech, Agadir, Oujda and Meknes) and three Commercial Courts of Appeal (located in Casablanca, Fez and Marrakech). These are comprised of professional judges and will consider all commercial disputes.

Arbitration finds increasing use in Morocco today. USAID, in collaboration with IFC, assisted the Government in 2008 and 2009 with the establishment of a national commission on Alternative Dispute Resolution (ADR) with a mandate to regulate mediation training centers and develop mediator certification systems. The goal of this program is to increase the use of mediation in the prevention phase of bankruptcy proceedings and in the resolution of business disputes outside of the courts. Although the program remains limited in its implementation, the business community has generally viewed early use of the system in Rabat and Casablanca as favorable. Additionally, under the labor chapter of the Free Trade Agreement, the U.S. Department of Labor has funded commissioners from the U.S. Federal Mediation and Conciliation Service to conduct mediation skills training for Moroccan labor inspectors in 2011 and 2012 and to union leaders and employer representatives in 2012.

Performance Requirements and Incentives

At present, there are no general foreign investor performance requirements. However, in the event that government incentives are provided, requirements may be imposed, and if so, would be spelled out in the specific investment contract.

Morocco offers incentives designed to encourage foreign and local investors. Morocco’s framework law on investment, its “Investment Charter”, was enacted in 1995. This charter replaced the nine existing investment codes, and gave the same benefits to all investors regardless of the industry in which they operate (except agriculture which remains outside the scope of the Charter.)

Morocco provides a range of investment incentives including:

  • A corporate tax holiday during the first five years of business and a 17.5 percent rate thereafter.
  • VAT exemptions: Equipment goods, materials, and tools needed to achieve investment projects involving an amount higher than or equal to 200 million MAD are exempt from VAT on imports, within the framework of an agreement concluded with the State, during a period of 36 months from the start of business.
  • Import duty exemptions: Businesses that commit to making an investment of an amount higher than or equal to 200 million MAD are exempt from import duties (applicable to goods, materials, and tools needed for their project and imported directly by the companies) within the framework of an agreement concluded with the State.
  • Offshore activities: Offshore companies have exemptions in terms of registration and stamp fees. In the case of “offshoring” facilities, the government has offered telecommunications costs set at 35 percent below the market price and training grants of up to $7,000 for each Moroccan employee during the first three years of employment.
  • Investment Promotion Fund: state participation/funding (not to exceed 5 percent of total investment) in projects that: equal greater than or equal to 200 million MAD; create 250 or more stable jobs; located in one of these provinces: Al Hoceima, Berkane, Boujdour, Chefchaouen, Essmara, Guelmim, Laayoune, Larach, Nador, Oued Ed-Dahab, Oujda-Angad, Tangier-Asilah, Fahs-Bnj-Makada, Tan-Tan, Taounate, Taourirt, Tata, Taza, and Tetouan; contributes to environment protection; and transfers technology.
  • 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 percent of the cost) and for acquiring new equipment goods (the Fund can contribute up to 15 percent of the purchases of new equipment goods). These contributions are limited to 15 percent of the investment and 30 million MAD. Relevant sectors include: manufacturing equipment for the car industry, manufacturing components for electronic assemblies and subassemblies, manufacturing equipment for the aviation industry, manufacturing activitives related to nanotechnology, microelectronics, and biotechnology, and aeronautical maintenance and plans dismantling. Total investment must equal or be more than 10 million MAD (excluding duties and taxes). Aviation project investments must equal or be greater than 200 million MAD.

A new version of the investment incentive regime is currently undergoing a governmental review. Additionally, Morocco plans to enact a new mining law this year, overhauling 60 year old rules, in order to attract investors and boost the role of the mining sector in the economy. The reforms will not affect phosphates, however, which are the country’s top export earner and a resource monopolized by the state-controlled Office Cherifien des Phosphates (OCP). Legislation to further liberalize energy markets could also be introduced in the coming year, as could a new law regulating Public Private Partnerships in public services.

American citizens can enter Morocco for a period of three months without a visa. A Moroccan residence permit is required for a period of more than three months.

Right to Private Ownership and Establishment

Private ownership is permitted in all but a few sectors reserved for the state, such as phosphate mining. Economic analysts, however, speculate that as Morocco's phosphate processing increasingly becomes open to foreign investment, its mining sector may follow suit. Apart from a few exceptions, private entities may freely establish, acquire and dispose of interests in business enterprises.

Protection of Property Rights

The Moroccan Ministry of Trade and Industry oversees the industrial property office. According to the 2012 International Property Right (IPR) Index, Morocco ranks 59 out of 130 countries in protecting physical and intellectual property rights. The U.S.-Morocco FTA contains strong intellectual property protections, which were incorporated in Moroccan intellectual property legislation in 2006. Pursuant to its FTA obligations, Morocco enacted legislation that increased protection of trademarks, copyrights and patents. While the protection of IPR is improving as a result of these provisions, counterfeit DVDs and CDs remain widely available throughout Morocco and weaknesses remain in the country's mechanisms for detection and sanctioning of internet-based IPR violations. Morocco's Customs Office, Copyright Office (BMDA), and the Office of Industrial and Commercial Property (OMPIC) have initiated campaigns to target Morocco's largest counterfeit manufacturers and importers, with mixed success. Consumer product companies have stated that counterfeiters have become increasingly sophisticated in their production and distribution of counterfeit goods.

Secured interests in property are recognized and enforced through the "Administration de la Conservation Fonciere."

In 2011, Morocco took the significant step of completing its accession to the Budapest treaty on patents and to the WIPO treaties on Copyright and Phonograms. Morocco is also a signatory to the Anti-Counterfeiting Trade Agreement (ACTA), though it has not yet entered into force. The ACTA establishes an international framework that will assist parties in their efforts to effectively combat the infringement of IPR, in particular the proliferation of counterfeiting and piracy, which undermines legitimate trade and the sustainable development of the world economy.

Transparency of the Regulatory System

Morocco’s Decree 2-06-388 of 5 February 2007 sets the conditions and terms for public procurement. It provides a detailed framework for public procurement and conforms to the principles of good governance, which guide efforts on an international level. The 2007 Decree applies to central government and local authorities. Public enterprises and establishments can adopt their own specific regulations provided they comply with regulations regarding competition and transparency. The new mechanism seeks to encourage competition by introducing the principle of equal treatment for bidders in all phases of procurement and by requiring the contracting authority to provide adequate and equitable information to all competitors via the government procurement website.

Despite government efforts to increase the system's transparency, Morocco's administration is opaque and difficult to navigate. Routine permits, especially those required by local government agencies, can be difficult to obtain. Morocco has sought, with some success, to increase the transparency of its public tenders. However, recent moves to decentralize the procurement process have seen only limited implementation pending the government’s general “regionalization” plan.

In 2006 a new charter for the central bank created an independent board of directors and prohibited the Ministry of Finance and Economy from borrowing from the central bank except in exceptional circumstances.

Section 166 of the new 2011 constitution outlines the authority of the Competition Council or the “Conseil de la Concurrence” as an independent executive body with investigatory powers. Together with the Central Authority for the Prevention of Corruption, “Instance Central de Prevention de la Corruption,” the Competition Council acts as one of the main actors in charge of improving public governance and advocating for further market liberalization.

In the World Economic Forum’s Global Competitiveness Report 2012-2013, the surveyed companies cite inefficient government bureaucracy as the most problematic factor for doing business in Morocco, followed by lack of access to finance, and corruption.

Efficient Capital Markets and Portfolio Investment

The World Bank and International Finance Corp 2012 Doing Business Report found that Morocco made more progress than any other country in the world in improving its business environment with reforms in “dealing with construction permits,” “protecting investors,” and “paying taxes” in 2010 and 2011.

Morocco's banking system is one of the most liberalized in North Africa. Nonetheless, it is highly concentrated, with the six largest banks accounting for 85 percent of banking sector assets and access to finance, particularly for small and medium sized enterprises, remains challenging. The IMF/World Bank's updated Financial System Stability 2008 Assessment concluded that the system was "stable, adequately capitalized, profitable and resilient to shocks." It noted the progress Morocco has made in deepening financial intermediation (At the end of 2011 54 percent of the population had a bank account, up from 39 percent in 2009, and 36 percent in 2007) and in reducing the overall level of non-performing assets (down from 11 percent in 2006 to 6 percent at the end of 2008 and 5.5 percent by the end of 2009). In its October 2011 assessment, the IMF noted that Morocco would need to mobilize additional resources and continue to strengthen core capital to adequately support credit growth in the future.

Morocco’s sovereign rating by Moody’s is stable at Ba1, and stands at BBB- and stable by Fitch. On October 12, 2012, Standard & Poor’s Ratings Services revised its outlook on Moroccan bank Banque Centrale Populaire (BCP) to negative from stable, but affirmed its BBB- credit rating.

A new Moroccan banking law was passed in 2006, strengthening the supervisory power of the central bank and improving risk management practices. Morocco has generally completed adoption of Basel II capital adequacy and risk management guidelines in order to improve financial stability and adopted International Accounting Standards (IAS) intended to enhance transparency.

Credit is allocated on market terms, and foreign investors are able to obtain credit on the local market. There are some cross-shareholding arrangements, but they are not tailored to exclude foreign investment. The Mission has not received any reports of efforts by the private sector or industry to restrict foreign participation in standard-setting organizations. The government has actively sought out the participation of foreign investors for discussions on improving the business climate in Morocco.

Some foreign banks are critical of what they view as a lack of proportional participation in the Moroccan Bankers' Association. However, Moroccan banks are largely in compliance with the Basel I standards and have become almost completely Basel II compliant as required by the Moroccan central bank. Banks are supervised on a consolidated basis and must provide statements audited by certified public accountants. In 2009, ten banks submitted consolidated financial statements based on Basel II standards.

The Casablanca Stock Exchange (CSE), founded in 1929 and re-launched as a private institution in 1993, is one of the few regional exchanges with no restrictions on foreign participation. The market weakened in 2008 and fell further in 2009 when the global credit crisis and its spillover into the real economy dampened foreign investment inflows and demand for exports. The Bourse rebounded sharply in 2010 with the MASI (Moroccan All Shares Index) growing by 21.17 percent. Although the Casablanca exchange only saw two Initial Public Offerings (IPOs) during 2010, one of the listings came from Morocco’s largest and most important insurance company, CNIA SAADA Assurance, which listed 15 percent of its shares on the exchange in November. Investors predicted similar gains and more listings in 2011 but the regional turmoil of the Arab Spring and persistent weakness in the global economy appeared to cause many investors to take a wait-and-see approach. As a result, activity in the market declined during 2011.

CSE ended 2012 in the red in the MASI and MADEX (Moroccan Most Active Shares Index), dropping 0.32 pc and 0.35 pc y/y respectively. The total volume of trade of the session was nearly 842.31 million dirhams, while the market capitalization remained above 445.26 billion dirhams.

The Morgan Stanley Capital International’s (MSCI) 2012 Annual Market Classification Review announced the addition of MSCI Morocco Index to the list of country indices for potential reclassification to “Frontier Markets” from “Emerging Market” status as part of the 2013 Annual Market Classification Review. The review is tentatively scheduled for July, 2013. The report stated that, “the MSCI Morocco Index is more in line with the size and liquidity requirements of Frontier Markets following a significant decrease in liquidity since 2008, which resulted in a simultaneous decrease in the number of constituents in the MSCI Morocco Index.” Currently the MSCI Morocco only has three constituents: ADDOHA, Maroc Telecom, and Attijariwafa Bank.

Analysts note that the market is buoyed by continuing restrictions on the ability of Moroccans to invest abroad. Gradual easing of these limits is widening Moroccan investors' options, however, and recent changes in the Moroccan exchange regime seem aimed at allowing Moroccan financiers to invest more freely into neighboring markets.

In the 2012-2013 World Economic Forum’s Global Competitiveness Report, Morocco improved from the 73rd rank in 2011 to 70th in 2012. In the report’s eighth pillar, “Financial Market Development” Morocco received a score of 4.8 for “Availability of financial services.” ( where 1 = not at all; 7 = provides a wide variety). Morocco received a 3.2 for “Ease of access to loans” (where 1 = difficult; 7 = easy) and 5.3 for “Soundness of banks” (where 1 = insolvent and may require bailout; 7 = generally healthy with sound balance sheet.)

Several international financial institutions (IFIs) and major regional and bilateral organizations continue to be active in Morocco. In August, 2012 the IMF approved a $6.2 billion liquidity line (PLL) to help against swing in oil prices and potential fallout from the downturn in Europe. According to the IMF survey, “the liquidity line provides Morocco with a useful insurance policy for meeting immediate financing needs should these risks materialize. It aims to strengthen investors’ confidence and facilitate international market access by signaling that Morocco’s current policies are sound, and that the authorities have adequate resources to draw upon if needed. The PLL is precautionary, and Morocco has said that it does not intend to draw on it in the absence of exogenous shocks.”

The Moroccan government laid out future banking sector reforms in its July 2012 Letter of Intent to the International Monetary Fund (IMF) for the PLL. It reported that the Bank Al-Maghrib (BAM), Morocco’s Central Bank, will reform liquidity ratios towards international standards. Starting from 2013, banks will be required to comply with stricter rules on risk diversification. Nonperforming loans (NPLs) of banks have fallen from 6 percent at the end of 2010 to 5.1 percent at the end of May 2012. BAM will maintain its requirements for adequate funding of such loans. In addition, BAM will strengthen its micro-prudential surveillance in the context of the risk-based approach. In parallel, the Ministry of Finance, BAM and other regulators are strengthening their coordination in order to preserve financial stability.

In their First Review under the Two-Year PLL (December 2012), staff from the IMF reported, “The banking sector has proven resilient to the global crisis and remains sound overall.” The report also noted that continuing efforts to foster deeper financial access, especially in rural areas, and strengthen intermediation, would help access to credit, particularly for small and medium sized enterprises, and contribute to higher and more inclusive growth.

Competition from State-Owned Enterprises

The public enterprise portfolio comprises 241 state-owned enterprises (SOEs), 42 percent of which operate in productive sectors and 38 percent in the social domain, according to a 2012 report by the OECD. The Treasury has direct equity interest in 44 companies, 43 percent of which operate in the infrastructure sector. Act No. 69-00 on State Financial Control of Public Enterprises, adopted in 2003, defined Moroccan SOEs for the first time into three categories: (1) state companies are those in which public bodies hold all the equity, (2) public subsidiaries are companies of which public bodies hold more than half the equity, and (3) semi-public companies are companies of which public bodies hold no more than half of the equity.

In 1993 a vast program of privatization was put in place. Between the start of the program to its end in August 2011, total revenue from divestment of SOE shares and the granting of telecom licenses totaled about 107 billion MAD. Privatization has given a boost to Morocco’s economy through its ability to attract foreign direct investment. FDI Intelligence elected Morocco as the “African Country of the Future 2011/2012.” Privatization revenues, channeled through the Hassan II Fund for Economic and Social Development, have also contributed to the country’s development.

Moroccan SOEs are overseen by boards of directors or supervisory boards. These bodies are governed by the Financial Control Act and the Limited Liability Companies Act. The operation of SOE governance organs is monitored by the Ministry of Economy and Finance’s Department of Public Enterprises and Privatization. Pursuant to Act No. 69-00, SOE annual accounts are published. Under Act No. 62-99, or the Financial Jurisdictions Code, the Court of Accounts and the Regional Courts of Accounts audit the management of a number of public enterprises.

Currently, a number of governance-related initiatives are considered of priority. These include an initiative that aims to help SOEs contribute to the emergence of regional development clusters. Additionally, the Code of Good Governance Practices for Public Establishments and Enterprises came into effect in March 2012. The code is aimed at enhancing SOE’s overall performance, including by requiring increasing use of standardized public procurement and accounting rules, outside audits, the inclusion of independent directors, board evaluations, greater transparency, and better disclosure. The Government is also attempting to improve the use of multi-year contracts with major SOEs as tool to enhance performance and transparency.

In July 2011, French oilseed giant Sofiproteol acquired a forty-one percent stake in Moroccan cooking oil producer Lesieur Cristal for $164.5 million.

Corporate Social Responsibility (CSR)

CSR has gained strength in tandem with Morocco's economic expansion and stability. The country's businesses are slowly embracing responsibility for the impact of their activities on the environment, communities, employees and consumers. As an example, the General Federation of Moroccan Businesses (CGEM) has awarded "social labels" to companies based on a systematic analysis of the effects of their activities. The Moroccan Association of Textile and Apparel Industires also awards a “Fibre Citoyenne” label to worthy companies. Additionally, Morocco launched the UN “Global Compact” network in 2006 in Casablanca. The project provides support to companies who affirm their commitment to social responsibility. The major trade unions (CDT, UMT, UGMT, FDT) and CGEM were among its initial members. Maroc Telecom most recently joined in November 2012, demonstrating its commitment to adhere to the Compact’s principles in the area of human rights, labor law, environment, and corruption.

While there is no legislation mandating specific levels of CSR, foreign and some local enterprises follow generally accepted principles such as the OECD CSR guidelines for multinational companies. NGOs are also taking an increasingly active role in monitoring corporations' CSR performance.

Political Violence

Morocco is a monarchy with a constitution, government, Parliament and judiciary, in which ultimate power and authority rest with the King. A process of qualified democratic reform is underway, and the country is broadly regarded as politically stable. The U.S. Government maintains excellent relations with Morocco and designated Morocco a Major Non-NATO Ally in 2004. A series of terrorist bombings in Casablanca in March 2003, as well as the bombing of the Argana Café in Marrakesh in April 2011, highlight the fact that Morocco continues to face a terrorist threat. U.S. facilities were targeted in 2007. Counterterrorism cooperation is excellent. The Moroccan Government aggressively investigates terrorist suspects and has dismantled a number of terrorist cells over the past year.

Demonstrations occur frequently in Morocco and usually center on domestic issues. Most demonstrations have been peaceful and orderly. There are infrequent reports of anti-American sentiment and isolated instances of violence. Most recently, on September 12, 14, and 16, 2012, protesters held demonstrations in Casablanca in response to the video, The Innocence of Muslims, produced in the U.S. The largest turnout of the three demonstrations consisted of 300 protesters who gathered near the U.S. Consulate.

During periods of heightened regional tension, large demonstrations may take place in major cities. Additionally, the “Arab Spring” of 2011 led to the creation of the February 20th Movement in Morocco. This disparate group of protesters has taken to the street in numbers between a few hundred to tens of thousands almost every Sunday from its inception through March 2012. It has since attempted to inspire new popular protests, but attendance is often low. Unions and labor groups organize street marches or protests from time to time to protest working conditions, salary levels, or other social benefit issues.

The sparsely settled Western Sahara was the site of armed conflict between the Moroccan Government and the POLISARIO Front, which demands independence. A cease-fire has been in effect since 1991, but sovereignty over the territory remains disputed. Negotiations to reach a settlement resumed in 2007 under UN auspices, but the dispute hampers development in the territory, as well as economic and political integration in the North Africa region.


Corruption has been a subject of political discussion since before independence in 1956. Morocco has a wide body of laws and regulations to combat corruption, but it remains a problem, in part due to the low salaries in the public sector. Parliamentary elections in November 2011 brought to power a coalition led by the mildly Islamist Party of Justice and Democracy, which highlighted anti-corruption during its election campaign, as had other parties in past campaigns. A new government anti-corruption agency was set up in 2007 but became operational only in January 2009. Headed by a respected senior Moroccan official who has been active in anti-corruption efforts since the founding of "Transparency Maroc," a non-governmental organization, the agency was created to "moralize" Moroccan public life and to propose specific steps the government can take to address the issue.

Morocco signed the UN Convention against Corruption in 2007 and hosted the States Parties to the Convention’s Fourth Session in 2011. In 2008, a new government anti-corruption agency, the Central Authority for the Prevention of Corruption (ICPC), was set up. Headed by a respected senior Moroccan official who has been active in anti-corruption efforts since the founding of "Transparency Maroc," a non-governmental organization, the agency was created to "moralize" Moroccan public life and to propose specific steps the government can take to address the issue. In 2010, the ICPC and its partners, the National Agency for the Promotion of Small and Medium Sized Enterprises (ANPME), the Moroccan business federation (CGEM), and the Ministry of Economic and General Affairs (MAEG) launched, with the support of the German Technical Cooperation (GTZ), the first portal of exposing corruption, www.stopcorruption.ma, which allows for anonymous submissions.

According to the 2012 Corruption Perception Index published by Transparency International, Morocco dropped 8 spots from its 2011 rank to 88th out of 176 countries. Government officials have criticized the Index, which reflects public perceptions concerning corruption, for not emphasizing recent anti-corruption efforts. These include enhancing the transparency of public tenders and implementation of a requirement that senior government officials declare their assets at the start and end of their government service.

Since 2003 Morocco has taken a series of steps to counter terrorist finance, strengthen controls against money laundering, and conform to international accounting and banking standards. Comprehensive anti-money laundering legislation was passed in 2007, drawn largely from recommendations made by the Organization for Economic Cooperation and Development's (OECD's) Financial Action Task Force (FATF). Morocco has created a Working Group on money laundering and counter-terrorism financing to coordinate policy and training across the various agencies of the Moroccan government. An independent Financial Intelligence Unit became operational in 2009. In July 2011 Morocco joined the Egmont group, an informal network of FIUs.

Bilateral Investment Agreements

The U.S. and Morocco signed a BIT on July 22, 1985, but its provisions were subsumed by the investment chapter of the U.S. –Morocco FTA which entered into force of January 1, 2006. The BIT’s dispute settlement provisions remain in effect for ten years after the effective date of the FTA for certain investments and investment disputes which predate the Agreement.

Morocco’s BIT can be found here: http://unctad.org/Sections/dite_pcbb/docs/bits_morocco.pdf

The Investment Chapter of the FTA can be found here: http://www.ustr.gov/sites/default/files/uploads/agreements/fta/morocco/asset_upload_file651_3838.pdf

OPIC and other Investment Insurance Programs

Morocco's agreement with the Overseas Private Investment Corporation was most recently updated in March 1995. In March 2011, Secretary of State Hillary Clinton announced that OPIC will provide up to 2 billion dollars in financial support to catalyze private sector investment in the Middle East and North Africa region, including Morocco. Morocco is also a member of the Kuwait-based Arab Investment Guarantee Organization (OAGI) and the Multilateral Investment Guarantee Agency (MIGA).

MIGA's first guarantee in Morocco, totaling $9.9 million, was issued to Banco Exterior de España, S.A. (BEX), a leading Spanish trade finance bank, for its $10 million loan to expand the wholesale and retail commercial activity of its majority-owned subsidiary in Morocco, Banco Exterior Maroc, S.A. (BEM).

On March 28, 2012, MIGA issued a guarantee of $3.5 million to Fons Mediterrània Capital, F.C.R. de Régimen Simplificado of Spain (FMC) covering its investment in JP Industrie, S.A. (JPI) in Morocco. The coverage is for a period of up to five years against the risks of transfer restriction, expropriation, and war and civil disturbance. MIGA also issued a guarantee of €1.9 million ($2.7 million equivalent) covering an investment by Fons Mediterrània Capital, F.C.R. de Régimen Simplificado of Spain (FMC) in Soroa Pépinières, S.A.R.L. (Soroa) in Morocco. The coverage is for a period of up to five years against the risks of transfer restriction, expropriation, and war and civil disturbance.

For more details please see www.opic.gov


Once strong and politically influential, the Moroccan trade union movement is now fragmented and no longer possesses the political clout it carried 50 years ago when it helped lead the country to independence. Nevertheless, 5 of the more than 25 trade union federations retain the potential to influence political life. Although unions claim high membership rates, Morocco has about 600,000 unionized workers, less than six percent of the 11.26 million workforce.

Moroccan labor law and practice draw from French models. The labor code was reformed in 2004, reducing the maximum workweek from 48 to 44 hours. Labor codes concerning unions and the right to strike do not cover domestic workers. Investors continue to view labor regulations as a significant constraint. They complain that procedures regarding lay-offs remain complicated and onerous, and they impose a significant financial burden on companies. Rules regarding foreign personnel are also vague and can lead to conflicting interpretations and arbitrary decisions.

Morocco has ratified the International Labor Organization (ILO) convention covering the right to organize and bargain collectively, and any group of eight workers can organize. Article 29 of the Constitution gives workers the right to strike, but no detailed law defines it. For a union to engage in collective bargaining it must have at least 35 percent of the enterprise's workforce as registered members. The Ministry of Interior occasionally intervenes, especially if the Government believes strategic interests are threatened. There are mandatory procedures governing the settlement of disputes, though the Government settles them on a case-by-case basis.

The official 2011 national unemployment figure dropped to 8.9 percent from 9.1 percent in 2010. The Moroccan High Commission for Planning (HCP) is reporting a second quarter national unemployment rate of 8.1 for 2012. The more meaningful urban unemployment figure improved from 13.7 percent in 2010 to 13.4 percent in 2011 and reached 12.3 percent at the end of second quarter 2012. However, those same statistics appeared to show an increasing rate of unemployment among urban 15 to 24 year-olds. HCP reported a 32.2 percent 2011 unemployment rate for urban 15 to 24 year-olds. In 2011, in response to social pressures, the government raised the minimum wage. The industrial minimum wage now stands at 12.24 MAD per hour, approximately $1.46, up from a previous wage of 11.70 MAD. Meanwhile, the agricultural minimum wage also rose, reaching 63.39 MAD per day, approximately $ 7.57.

Foreign Trade Zones/Free Ports

The Tangier Free Zone (TFZ) launched in 1999 and began operations in 2000. 300 hectares of the zone are dedicated to an industrial zone under customs. TFZ is reserved for companies whose business is export oriented. Several advantages are granted to Tangier Free Zone: investors are exempt from any formality once permission is given, it is not subject to any control and activities are exempt from all duties and trade taxes, as well as corporate tax during the first five years. Dividend income from investments distributed by companies located in export processing zones are not subject to withholding tax if they are distributed to non residents and to a rate of 7.5 percent when paid to residents. For the customs, goods entering or leaving the export processing zones for export, as well as those obtained in these areas are exempt from all duties, taxes or surcharges levied on the importation, distribution, consumption, production or export.

Moroccan labor laws still apply, but few, if any, firms are unionized. There is also an offshore banking law covering Tangier.

Foreign Direct Investment Statistics

The Moroccan foreign exchange office maintains balance of payments statistics that include annual foreign exchange inflows for private foreign investment. These statistics differentiate between foreign direct investment (purchases of companies or increases in capital), portfolio investment, and short-term financing for current account expenditures, e.g. lending to a subsidiary for purchases of equipment. The following tables are based on balance of payments statistics.

Foreign Direct Investment Stock in Morocco by Country
(Millions of USD)















United Arab Emirates

















































United States














Saudi Arabia














Other Countries














Exchange Rate (MAD/USD)







Source: Office des Changes, www.oc.gov.ma, exchange rate conversion based on end of year exchange rate reported by Morocco’s Central Bank

* Preliminary Data

Foreign Direct Investment Stock in Morocco by Country
(Millions of Moroccan Dirham)















United Arab Emirates







Saudi Arabia



































United States



































Other Countries














Source: Office des Changes, www.oc.gov.ma

* Preliminary Data

Private Investment and Loans from the United States

(Millions of USD)

Nature of operation







Direct Investment







Portfolio Investment







Private loans














Source: Office des Changes, www.oc.gov.ma, exchange rate conversion based on end of year exchange rate reported by Morocco’s Central Bank

* Preliminary Data

Foreign Direct Investment Stock from the U.S. by Sector
(Millions of USD)






















Real Estate
























































Others Services





















Source: Office des Changes, www.oc.gov.ma, exchange rate conversion based on end of year exchange rate reported by Morocco’s Central Bank.

* Preliminary Data


Industries Marocaines Modernes
Parent company: Procter and Gamble
Sector: Soaps and toiletries
Number of employees: 700

Coca-Cola Export Corporation
Parent company: The Coca-Cola Export Corp.
Number of employees: 5,000 (including employees of NABC, Coca-Cola’s bottling partner)

FRI—McDonald’s Morocco
Parent company: McDonald’s Corporation
Number of employees: 2,000
-Plan to invest nearly $60 million over three years beginning in 2011

MATIS Aerospace
Parent company: Boeing/Royal Air Maroc/Labinal (Joint venture)
Sector: Aerospace production
Number of employees: 580

Delphi Automotive (former division of GM)
Sector: Auto part manufacturer
Number of employees: 4,890
-Present in Tanger-Med Free Trade Auto Zone, produces for export only

Sector: Automotive supplier
Number of employees: 4
-Working in TangerMed Free Trade Auto Zone, supply three paint colors for Dacia vehicles; plan to expand to 25 employees

Kraft Foods
Sector: Food products
Number of employees: 200

Mars North Africa and Levant
Sector: Food products
Number of employees: 13
-Invests about $1.2 million per year

Lear Automotive
Sector: Automotive
Number of employees: 2,500
-Produces for export only; Present in Tanger-Med Free Trade Automotive Zone and Rabat Technopolis and has plans for additional plants in 2013

Sector: Food production and distribution
Number of employees: 85
-Recently invested $17 million in a storage facility at the Casablanca port (Silos du Maroc) in partnership with the local railway company

Minco Aviation Electronics
Sector: Aviation/Hi Tech
Number of employees: 66
-Produces for export only

Kerzner International
Sector: Tourism - Mazagan Beach Resort
Number of employees: 1,300

Colgate Palmolive Maroc
Sector: Pharmaceutical and cosmetic
Number of employees: 122

Parent company: The Consortium Global Environmental Sustainability, Inc. (GESI) and Edgeboro International Inc.
Sector: Waste Management
Number of employees: 70
- Investing about $7.5 million over 10 years in Fes project and about $100 million over 18 years in Casablanca project

Parent company: International Paper
Sector: Packing
Number of employees: 1,500

Fruit of the Loom
Sector: Textile
Number of employees: 2,300
-Production of high quality t-shirts for export to European market only

Dell Computers
Sector: Computers/Hi Tech
French-language call centers
Number of employees: 2,000

Sector: Pharmaceutical
Number of employees: 151

Sector: Security
Number of employees: 1500

Jacob Delafon (owned by Kohler)
Sector: Sanitary Products
Location: Tangier
Number of employees: 570 employees

Greif Packaging
Sector: Metal and plastic packaging
Location: Casablanca
Number of employees: 260 employees


Jorf Lasfar Energy Company
Parent company: TACA Energy (operated by CMS Energy)
Sector: Independent power project
Number of employees: 317

Sector: Packing/Transportation
Number of employees: 300

Lafarge Betons
Parent company: Lafarge (France)
Sector: Concrete
Number of employees: 160

Holcim (Maroc)
Parent company: Holcim (Switzerland)
Sector: Concrete
Number of employees: 501-1,000

Tecmed Maroc
Parent company: Grupo ACS (Spain)
Sector: Waste collection
Number of employees: N/A

Bymaro S.A.
Parent company: Bouygues S.A. (France)
Sector: Construction and civil engineering
Number of employees: 1,500

Renault Maroc
Parent company: Renault S.A. (France)
Sector: Motor vehicle assembly
Number of employees: 285

Alstom Maroc
Parent company: Alstom (France)
Sector: Power generation and transport
Number of employees: N/A

EADS Maroc Aviation
Parent company: European Aeronautic Defense and Space Company (Europe)
Sector: Aeronautics and defense
Number of employees: 251-500

Sanofi-Aventis Maroc
Parent company: Sanofi-Aventis SA (France)
Sector: Pharmaceutical manufacturing
Number of employees: 185

Novartis Pharma Maroc
Parent company: Novartis International AG (Switzerland)
Sector: Pharmaceutical
Number of employees: 180

Nestlé Maroc
Parent company: Nestlé SA (Switzerland)
Sector: Consumer packaged goods
Number of employees: 590

Imperial Tobacco Morocco
Parent company: Imperial Tobacco (UK)
Sector: Tobacco
Number of employees: 1,000+

The Morocco Mall
Parent Company: Al Jedai Group (Saudi)
Sector: Retail
Number of employees: 5,000+

Bombardier Aerospace
Parent Company: Bombardier (Canadian)
Sector: Aerospace
Number of employees : 850 (expected)