Morocco Economy Overview

Currency

Moroccan Dirham (MAD)

Working hours

44 hours/week

Public/bank holidays

13 public holidays

Capital

Rabat

Languages

Arabic and Berber

Population

37 million

Minimum hourly salary

Public Sector: 20.83 MAD

Private Sector: 16.36 MAD

Agricultural Sector: 12.47 MAD

Tax year

1st Jan – 31st Dec

Date format

DD/MM/YYYY

Misclassification penalties

Misclassifying employees as independent contractors can lead to significant fines, back payments of social security contributions, and potential legal consequences.

Fun fact

Morocco is home to the world’s largest desert, the Sahara, and has one of the oldest universities in the world, the University of Al Quaraouiyine, founded in 859 AD.

Morocco has undergone an economic transformation in the past decade and has bounced back from the financial crisis in 2008, which hit it hard. It has moved up rapidly from position 130 in the World Bank’s index of ‘Doing Business’ to a ranking of 53 in just 11 years, placing it back on the world stage as a viable nation when it comes to business and trade.

It has not streamlined its operations as much as more developed nations, and the red tape to operate there, coupled with a wealth of non-codified texts to navigate, can be burdensome, but depending on which region of the country you want to set up in it is overall a great place to do business.

As of 2024, the GDP per capita of this North African country is approximately $3,442, with a total GDP in the region of $130bn, with a growth change rate of 1.3% (2022). The Finance Minister of Morocco is expecting 2024 growth of 3.7%, followed by 3.6% the year after, and then a 2026 projection of 4%.

The country has launched many new programs to stimulate economic growth in recent years, including the New Development Model, the Social Protection Program, and the New Investment Charter, which seeks to create half a million jobs in three years.

Overview of Morocco's Economy

Morocco endured an extensive period of slow growth prior to 2010, but in recent years, it has bucked that trend and sought to establish itself as a key player on the global stage when it comes to doing business there. Morocco also has great potential for foreign investment.

Economic SectorContribution to GDP
ServicesMore than 50%
Tourism (Marrakech and Agadir)Plays a large role in keeping the country ticking
IndustrialBurgeoning sector with rapid development in construction and manufacturing
AgricultureAround 40% of Moroccans work in this sector

However, this sector can also be volatile due to climate fluctuations, including a lack of rain, which can have an impact on overall GDP. It’s also a large exporter of phosphate minerals, seafood, and textiles.

Taxes

Employer Tax: 20.71% to 25.71%

Family Allocation

6.4%

Social Allocation/Benefits

8.6% (ceiling of 6,000 MAD)

Health Insurance

4.11%

Professional Training Tax

1.5%

Social Solidarity Tax

Progressive based on profits (2.5% – 5% for 1 million to 40 million MAD profits; 5% for profits over 40 million MAD)

Employee Tax: 8.05%

Social Allocation/Benefits

4.29%

Health Insurance

2.26%

Social Solidarity

1.5% for individuals earning 120,000 MAD annually

Income tax

Morocco has a progressive tax system for individual income.

Gross Income (MAD)

Up to 40,000

40,001 – 60,000

60,001 – 80,000

80,001 – 100,000

100,001 – 180,000

Above 180,000

Tax Rate

 0%

 10%

 20%

 30%

 34%

 37%

Business Regulation in Morocco

Although there are limits on some kinds of foreign investment, such as agriculture and fishing, there is generally no distinction made between investments made nationally or internationally, however, there are some business regulations which stipulate how much investment capital can be repatriated.

There are also some regulations surrounding loans of an investment nature to corporate entities registered in Morocco. When it comes to tax, corporate tax is set at 37% if you are in the financial sector (such as banking and insurance), but for regular businesses, it is 30%. For businesses with an annual turnover of less than MAD 3,000,000 (approximately $314,000), you can benefit from a huge reduction in corporation tax to just 15%.

As with many ‘upper-middle-income’ countries that are still classed as developing, Morocco has a lot of red tape that can hinder businesses, and new laws are constantly being made to better regulate the economy in line with more developed nations.

When setting up a business, expect to produce multiple copies of the same document for different departments, and be prepared to obtain all official verification, like stamps, to operate properly within the law.

Benefits of Doing Business in Morocco

There are multiple advantages to doing business in this part of the world, not least because it is conveniently located in the north of the continent, allowing it to operate as a gateway to further business. Importers in Morocco are savvy and have likely already scoured foreign markets for the best suppliers, so long-term strategies for penetration into the markets must be implemented to succeed here.

For businesses planning on hiring labour—such as in the textile, commerce, agricultural, or industrial sector—the fact it is so inexpensive is a major draw, with the average minimum wage per hour being just $1.80. Even though large sections of the population are uneducated, many thousands of Moroccans have been educated outside of the country and are available for highly skilled work. 

Foreign investors also benefit from multiple banking benefits. Investments are made freely and do not need approval, as in some countries, whether operating as a sole trader or if you’re interested in increasing capital from a business already operating in Morocco. There are also many double tax treaties, bilateral investment agreements signed with multiple partner countries, and a Free Trade Agreement with the United States.

Business Expansion Options in Morocco

There are multiple ways businesses can expand into Morocco and tap into its economic potential. Here are the four main ways to do it successfully.

Morocco Employer of Record (EOR)

Choosing to opt for an Employer of Record (EOR) in Morocco is popular because it helps to avoid the hassle of the country’s complex system of labour laws. This approach means you can tap into the market at all levels and get things going with your business operations much more easily than setting up separate entities to manage the workforce.

There are no specific regulations relating to EOR in Morocco, and it is similar to temporary solutions to hire workers because if you don’t have a local base there yourself, your business cannot hire staff in the traditional way. Having an EOR work as an intermediary for the company is a great way to circumvent the hiring process.

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Recruitment Agencies

Recruitment agencies in Morocco help businesses expand by connecting them with skilled local talent across various industries.

Remote People provides recruitment solutions that simplify hiring and ensure compliance with Moroccan labor laws.

For businesses looking to grow in Morocco, Remote People offers the expertise and resources needed to build a local workforce quickly and effectively, making it a practical solution for market expansion.

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Morocco Professional Employment Organization (PEO)

If you don’t want to establish a legal entity in Morocco, then partnering with a Professional Employer Organisation (PEO) is another option.

Various professional organisations with offices in Morocco can help businesses enter the market very quickly, and they take over much of the administration, which can burden companies wishing to focus solely on their business activities.

They can help businesses set up operations and take care of everything from navigating the Moroccan payroll and taxes to ensuring compliance with all of the national and local laws.

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Subsidiary Incorporation

To begin operations in the country, companies are able to create a subsidiary, which may take many months to complete and comes with lots of associated fees. These subsidiary laws vary by region you want to set up the business in, and you can choose from various forms, including an LLC and a joint stock company (as well as a simplified version of a joint stock company).

An LLC is the easiest method and requires a certificat négatif, which can be obtained online, a set of notarised and apostilled incorporation documents, a declaration of investment, and a bank account. The company also needs to be registered with the Social Security system to hire employees.

Branch Registration

Creating a branch of an existing foreign entity in Morocco is easier than setting up a subsidiary, as it’s not creating a brand-new entity. To do this, the parent company needs to create documentation (known as procès-verbal) giving the name and location of its HQ in Morocco. Registration with the tax authority is essential, too. It must also be placed on the National Commercial Register and Social Security Fund.

Business Opportunities in Morocco

Morocco’s multifaceted economy, strategic location, and proactive government initiatives have converged to create a fertile ground for businesses to thrive across a wide range of sectors.

As the nation forges ahead on its path of economic growth and development, it presents a compelling invitation to bold entrepreneurs and astute investors to capitalize on the abundant opportunities that lie within its borders.

The government’s unwavering commitment to fostering a conducive business environment, exemplified by sweeping reforms aimed at streamlining administrative processes and attracting foreign investment, has further heightened Morocco’s allure as an investment destination par excellence.

OpportunityRationale
Automotive Industry

Morocco has emerged as a leading automotive manufacturing hub in Africa, with several global automakers establishing production facilities in the country.

The sector benefits from Morocco’s skilled workforce, competitive labor costs, and favorable trade agreements with the European Union.

Renewable Energy

Morocco has set ambitious targets for renewable energy production and has invested heavily in solar, wind, and hydroelectric projects.

The country’s abundant solar and wind resources, combined with the government’s supportive policies, create significant opportunities for businesses involved in the development and deployment of renewable energy technologies.

Agribusiness

Morocco’s diverse climate and agricultural resources offer opportunities for businesses involved in the production, processing, and export of agricultural products.

The country is a major producer of citrus fruits, olives, and vegetables, and there is potential for growth in the organic and value-added food sectors.

Tourism

Morocco’s rich cultural heritage, stunning landscapes, and warm hospitality continue to attract millions of visitors each year.

The tourism sector offers opportunities for businesses involved in hospitality, transportation, and related services.

Investment in tourism infrastructure and the development of new attractions can further boost the industry’s growth.

While establishing a company in Morocco may involve navigating through significant bureaucratic hurdles, which can be time-consuming and costly, there are alternative avenues for businesses to operate in the country and leverage its skilled and cost-effective labor force.

By carefully assessing the local market dynamics and exploring various entry strategies, such as partnerships, joint ventures, or outsourcing arrangements, businesses can effectively mitigate the challenges associated with setting up a direct presence in Morocco.

The key to success lies in adeptly navigating the intricacies of the Moroccan market and adapting to the unique opportunities and challenges it presents. By conducting thorough market research, understanding the regulatory landscape, and building strong local networks, businesses can position themselves to unlock the door to success in this vibrant and promising market.

With a well-crafted strategy, a willingness to adapt, and a keen eye for opportunity, companies can establish a solid foundation for growth and prosperity in Morocco’s thriving business landscape.

For those with the vision, acumen, and determination to seize the moment, Morocco offers a stage set for success. By leveraging the country’s diverse economic sectors, strategic location, and supportive government initiatives, businesses can forge a prosperous future in the heart of this dynamic and rapidly evolving market. The opportunities are ripe for those ready to embrace the challenges and reap the rewards of operating in one of North Africa’s most promising economies.