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Foreign Direct Investment

According to UNCTAD's World Investment Report 2022, FDI flows to Morocco reached USD 2.1 billion in 2021, up by more than half compared to one year earlier. Similarly, the total stock of FDIs stood at USD 72.9 billion or around 55.5% of GDP. Morocco's FDI profile is quite diversified, with a consolidated presence of some large multinationals in manufacturing industries, including automotive, aerospace and textiles. In 2021, more than half of the FDI inflows to Morocco have been concentrated in three sectors: real estate activities (27%), manufacturing industries (17.3%) and financial and insurance activities (11.3%). The main investing countries have been France (historically the main investor), the United Arab Emirates, the UK, the U.S. and the Netherlands. In terms of stocks, agriculture has the highest share, followed by financial and insurance activities, mining and quarrying, ICT and wholesale and retail trade. According to the latest figures from the Moroccan Foreign Exchange Office, in the first eleven months of 2022, FDI flows to Morocco increased by 31.5% to MAD 35.3 billion, whereas Moroccan investments abroad reached MAD 17.3 billion, the highest level in the last five years (+7.1% y-o-y).

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 67th out of 132 in the 2022 Global Innovation Index and 87th out of 180 in the Corruption Perception Index.

 
 
Foreign Direct Investment 201920202021
FDI Inward Flow (million USD) 1,7201,4192,153
FDI Stock (million USD) 66,55171,97572,941
Number of Greenfield Investments* 1116252
Value of Greenfield Investments (million USD) 3,0692,4691,816

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.

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Investment Opportunities

The Key Sectors of the National Economy
Textile-clothing, tourism, agriculture, aquaculture, automotive.
High Potential Sectors
Call centers, high-technology, green energy (the country has the world’s largest concentrated solar power facility with storage, near Ouarzazate)
Privatization Programmes
In recent years, Morocco has launched an ambitious program of privatisation in many sectors of the economy. The largest privatisations were carried out in the sectors of mobile telephony, finance, tobacco stores and water supply.
Nevertheless, as of March 2021, the Moroccan Treasury held a direct share in 225 state-owned enterprises and 43 companies, including telecommunications companies, banks, and insurance companies, as well as railway and air transport companies (US Department of State).
The government relaunched Morocco’s privatization program before the Covid-19 pandemic but the plan was delayed. The 2022 budget schedules the privatisation of Marsa Maroc, Maroc Telecom, La Mamounia, Energie Electrique de Tahaddart (EET), Biopharma and Sonacos.
Tenders, Projects and Public Procurement
Tenders Info, Tenders in Morocco
 Global Tenders, Tenders in Morocco
 MCA Morocco
 

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors
The Moroccan government holds a monopoly on phosphate extraction through the 95% state-owned Office Cherifien des Phosphates (OCP). Moreover, several sectors remain under public monopoly, managed either directly by public institutions (rail transport, some postal services, and airport services) or by municipalities (wholesale distribution of fruit and vegetables, fish, and slaughterhouses).
Sectors in Decline
Textile-clothing, fishing.
 

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