The various forms of business enterprises in Morocco are:
- Share companies : the stock company (SA), the limited liability company (SARL) and the limited company with shares
- Entities with specific regulations : investment companies, co-operative societies, consumer co-operative and friendly societies
Besides the sole partnership, the SA and the SARL are the two most widely used types of commercial companies in Morocco.
The Stock Company (SA)
The corporation is a commercial company in which the partners are called shareholders due to a right represented by negotiable stocks or shares, and are only liable up to the extent of their contribution.
In return, a new law of 17 October 1996 regulates stock companies. This law applies to all stock companies established on or after 17 October 1996. Companies established prior to that date have until 1 January 2000 to comply with the provisions of the new law. Under the new law, an SA must have paid-in capital of at least DH 300,000 (Dh 3 million for “publicly traded companies”) and at least five shareholders which can be either legal entities or individuals. The maximum number of shareholders is unlimited. It can be incorporated only after the capital is entirely subscribed. The minimum nominal value of the shares is DH 100.
All stock companies must appoint at least one statutory auditor. The new law on stock companies, published in October 1996, requires the auditor to express an opinion on the annual accounts.
The Limited Liability Company (SARL)
The limited liability company is halfway between partnerships and share companies. Small entities generally adopt this form, in part because the rules governing the formation and operations of limited liability companies are less stringent than those that regulate stock companies. The shareholders are only liable up to the amount of their contribution.
A new law of 1 May 1997 regulates the SARL established on or after 1 May 1997. Companies established before this date are granted a transitional period until January 2000 to comply with the new regulations. Under the new law, a SARL must have paid-in capital of at least DH 100,000 and may have between 1 and 50 shareholders. If the number of partners of a SARL grows to exceed 50, the company must be converted to a stock company. The articles of limited liability companies specify the rules governing transfers of shares. A majority of shareholders, generally 75%, is required to approve the transfer of shares to a third party.
The limited liability company must appoint at least one statutory auditor.
Moroccan income tax is payable at the corporate rate by resident companies, non-resident companies deriving taxable income from activities carried out in Morocco and branches of foreign companies carrying on business activities independent of those performed by their head office. In general, only Moroccan-source income is subject to tax.
Taxes on Individuals
Individuals are liable to Moroccan income tax only on income arising in Morocco. However, in the case of income from employment received by a resident individual, the whole of that income is deemed to arise in Morocco whether the duties of employment are performed in Morocco or abroad and wherever the income is paid. In effect therefore, a resident individual is liable for Moroccan income tax on his worldwide employment income.
- Value Added Tax
- Business License Tax
- National Solidarity Tax
- Professional Training Tax
- Urban Tax
- Withholding Tax
- Registration Duties
Prior to 1996, Morocco used to have various investment codes for exports, tourism, industrial , mining, maritime, handicraft and real estate investments. These codes have been cancelled starting from 1 January 1996. Morocco has however adopted and investment charter which sets up the main objectives regarding the promotion and development of investments in Morocco within the next ten years.
The charter’s main objectives are to improve the tax environment, review the tax incentives and set up new incentives for investments. More specifically, these objectives consist of the following :
- reducing the tax burden relating to the acquisition of equipment,
- reducing the income tax rates,
- offering tax incentives to promote regional development,
- promoting offshore and free-trade zones,
- apportioning more equitably the tax charges among taxpayers …
Moreover, the income tax incentives regarding exports, industrial and handicraft investments have been maintained through their inclusion in the corporate tax law in 1996.
Remittances of capital and related income to non-residents are guaranteed. No limitations are imposed on the time or amount of profit remitted. Loans must be authorised by the Office of Exchange Control.
To be employed in a company, a foreigner must be a resident in Morocco and obtain an authorisation from the Ministry of Labour.
A non-resident cannot stay more than three months in the country.
Nationals of certain countries require visas to enter Morocco.