At ITC we feel that it would be a useful exercise to provide detailed information on those countries that, thanks to their hard work and constant striving for progress, offer a wide variety of business opportunities for our industrial base. This is precisely the case of Morocco, a country which is in the middle of a dynamic development process and figures in the world lists of countries with the highest growth rates. According to the magazine FDI Intelligence its potential in Africa is second only to that of South Africa.
This evolution was not created i a vacuum, there many objective reasons that make Morocco a natural target for business: its strategic access to European markets and its position in North Africa that makes it an idea jumping off point for other North and Western African markets.
Following is a summary of the strengths and challenges, business opportunities and a few pointers to the most important business practices and considerations to be taken into account to ensure that your Moroccan adventure goes a smoothly as possible.
The Moroccan market has a number of strengths that make it an attractive proposition when considering industrial development in the area.
- A well developed network of global communications and transport.
- “Open skies” agreement with the EU and low-cost flights from several European bases.
- A strong banking and financial sector.
- Competitive labour costs.
- Fiscal incentives: there are no capital restrictions and profits and dividends may be re-exported without restriction.
- Well placed in the 2015 World Bank’s “Doing Business”.
Notwithstanding its strengths, Morocco still presents challenges that have to be resolved:
- Excess bureaucracy.
- Legislation badly carried out.
- Fakes and counterfeiting.
- The country received a negative report in the barometer of global corruption: Corruption Perception Index.
- Competition from European Union countries and, increasingly, that of countries outside the Union.
- A very price sensitive market and low consumer spending.
Potential for Growth
Morocco has displayed remarkable economic progress over recent years. Due largely to considerable liberalisation of the market and restructuring of the financial sector.
Growth of GDP was 4’9% in 2011, a drop to 2’7% for 2012, it was up again to 4’4% in 2013 but lost 2 percentage points in 2014. GDP is forecast to reach 4’9% in 2015.
Agriculture is still the preponderant sector in the economy providing employment for some 40% of the population and representing about 20% of the GDP. Whilst traditional industries such as mining and construction have registered lower figures recently, overall industrial output has shown appreciable growth to offset this. This is largely attributable to the automotive and aero-spatial industries, chemicals and food processing.
Free Trade Agreements
May 2013 saw the opening of talks between Morocco and the European Union on the reform of the free trade agreement. This was to include areas not covered in the previous accord such as services and public contracts and led to a simplification of customs procedures and better protection for investment.
Hispano-Moroccan Business Opportunities
In general, Spanish products are extremely well thought of and received in Morocco which has led to companies from practically all the industrial fabric of Spain have met with significant success both as exporters and when establishing branches or subsidiaries in the country.
Greatest success is to be expected in those sectors that receiving public funds and are financed by international banks. Public calls for bids for water treatment and renewable energy plants are not only of interest to those large companies which will formally win the contracts, but for small and medium sized ones that will find opportunities in subcontracting work.
Although faced with tough competition, other sectors worth studying in Morocco are those related to agriculture (irrigation and machinery), construction and furniture making.
We would not like to conclude this article, without highlighting the opportunities that are to be found in energy, security. Education and training, construction and infrastructure.
The Moroccan government has an ambitious plan to develop energy from renewable sources: make concerted efforts to protect against the deteriorating environment and to place special emphasis on energy efficiency. Their medium term target is to considerably reduce if not eliminate dependency on imported fuels.
In 2011, approximately 94% of fuel need were covered by imports, which means tht opportunities for business can be in the following sectors:
- Renewable energies
- Energy efficiency
- Exploration for fossil fuels
- Environment, water and waste management.
- Mineral exploration
This is becoming one of the Government’s priorities in Moroccan sporting and tourist infrastructure such as:
- Fire protection
- Border control
- Surveillance and detection
- The use of imaging techniques in police work.
Education and Training
The Moroccan deficit in education and training with respect to Europe means that the demand here for these services at all levels is constantly increasing. Vocational training is especially attractive in all sector of industry and requires the input of countries, such as Spain with more experience in the field.
The main areas to be targeted are:
- Basic schooling.
- Language teaching.
- Agreements and exchanges with overseas universities.
Construction and Infrastructure
Plans are underway in Morocco to complete and put into motion a large number of projects that will offer a wide range of opportunities to Spanish business:
- Urban and rural infrastructure
- Construction of new motorways, roads and railways.
- Improvements in ports and airports.
- Development of urban and rural transport.
- Construction of new towns and industrial parks.
- Investment in tourist amenities, hotels and resorts.
Factors to be Contemplated by Start-ups
Companies planning to enter the Moroccan market can, in general, do it in one of the following ways:
* Direct exports.
* Creating a company.
* Appointing a distributor or sales agent.
* Joint venture, licensed manufacture or subcontracting.
As specialists in overseas trade, we would always recommend having a local representative, even though your choice of entry may be direct exports.
Before staring any business activities in Morocco it is highly recommended that you seek specialised fiscal and legal advice which will smooth out the difficulties faced when reaching any business agreements.
Contact the ADMI (The Moroccan Agency for Investment and Development). They can be of great use when seeking details information on specific regulations covering exports in the country.
Intellectual Property and Copyright
The main protection of this nature is: trade marks, patents and copyrights for both businesses and individuals.
In Morocco is is vital to protect your trade marks to avoid fakes and counterfeiting. This may be obtained through the OMPIC (Moroccan Agency for Industrial and Commercial Property). They will, of course, also provide detailed information on the applicable legislation regarding trade marks, patents and copyright.
Technical Standards and Regulations
Spanish companies can seek information from (IMANOR) the Moroccan Institute for Standards.
Fiscal and Customs Aspects
Control of all imported goods is the responsibility of the Moroccan Customs Service. Import duties depend on a number of factors including type of goods and the country of origin.
All imported goods must be declared in customs whatever the type of transport used and the vast majority can be imported without an import licence.
The following tariffs and duties may be applicable:
- Import duty, dependant of type of goods.
- Para-fiscal Import Tax: 0’25%
- VAT (20% in general though for some goods and services it is 14% or 7%).
All commercial and sales operations in Morocco must be covered by:
- Bill of Lading
- Import Export Documents
- Certificate of Origin
- Bank certificate for customs clearance
- Packing List
The official languages of Morocco are Arabic and Berber, but the language of business is French. Although it is increasingly common to find English spoken in business we would advise using French for all correspondence and negotiations.
You would also be well advised to avoid Ramadan which usually falls some time in July or August.
No visa is necessary for stays of under three months and the passport should be valid for the duration of the stay. Any foreign national intending to work in the country will need a work visa.
The official Moroccan web page for the Government and Public Services is: http://www.service-public.ma/en/web/guest/home and you will find this invaluable when seeking information.
Source for some of the date contained in these article:www.ukti.gov.uk