Dahir (Bill) n ° 1-10-196 of December 30, 2010 promulgating the Law No. 44-10 relating to the Status of "Casablanca Finance City" (Official Gazette n ° 5904 bis). Decree n ° 2-11 - 323 of 6 September 2011 on the implementation of Law No. 44-10.
The new international financial center in Casablanca "Casablanca Finance City" is part of a financial and economic strategy to optimize the flow of capital to the region and make Morocco a regional and international hub for financial services, investment and insurance activities.
February 20th 2012: the CFC commission granted the CFC status to the first two companies
Objectives and incentives of "Casablanca Finance City"
The creation of the new financial hub "Casablanca Finance City" ("CFC") is the result of a long process of reform of national financial market, become a model at the regional level and for others emerging country. The objective is to establish an appropriate environment to develop the financial place with appropriate competitive measures, which could enable Morocco to position itself as an intermediary between the European capital and investment needs in Africa. Indeed, Morocco is now third African economy behind Egypt and South Africa, for its financial activity.
Law 44-10, combined with the Budget Act for Fiscal Year 2011, provides tax exemptions and incentive measures for companies exporting services. These will be exempted from corporation tax for the first five years of practice (under CFC status) in respect of their foreign sales and net capital gains securities from foreign sources. After this exemption period, these companies will be subject to a reduced rate of corporation tax set at 8.75%. The regional and international offices with the status mentioned above are subject to tax at a specific rate of 10% from the first year of the grant of the status. In addition, the income paid to employees required to work in a company benefiting from the CFC status, will be subject to a single income tax of 20% (a reduction of 18 percentage points compared to the current marginal rate) for a maximum period of 5 years from the date of taking office.
Considerable tax exemptions have certainly been decided to make "Casablanca Finance City" the new financial hub of Africa, but to benefit from them, it is necessary to be eligible to the conditions of "Casablanca Finance City."
Scope and eligibility to the status of "Casablanca Finance City"
According to Law 44-10, the financial center "Casablanca Finance City" is open to companies performing financial or non-financial activities on a regional or international level operating in the credit, insurance, insurance brokerage and asset management sectors. The following companies are also involved: the professional service providers which perform and manage activities including financial offshoring, computer services and specialized financial services, as well as companies operating as regional or international headquarters which ensure the coordination of services activities operated in one or several foreign countries.
The institutional promotion and management of the project of "Casablanca Finance City" are entrusted to the company "Moroccan Financial Board." The Board consists of six financial institutions: Bank Al Maghrib, CDG, Attijariwafa Bank, Banque centrale Populaire, BMCE Bank, , and the Casablanca Stock Exchange.
In addition, the CFC commission established by Decree n ° 2-11 - 323 of 6 September 2011 and chaired by the Minister of Finance is in charge for granting or removing, on proposal of the "Moroccan Financial Board", the "CFC" status to companies performing eligible activities and supporting the following conditions:
- To comply with the legislation applicable to the entity and in particular with the regulations relating to foreign trade and exchange control;
- Implement their activities with non-resident legal entities; Decree n ° 2-11 – 323 specifies the minimum percentage of turnover to achieve with these entities for “CFC” activities:
- 20% for the 1st full fiscal year;
- 40% for the 2nd and 3rd full fiscal years;
- 60% for the 4th full fiscal year, and the following fiscal years;
- Establish an effective separation between the activities undertaken on the local market and those carried out on the international market.
Thus, we can consider that the benefits of that status would be open to both newly established companies as existing companies. In this respect, under the condition relating to the physical location, the latter would be required to transfer their registered office in the area reserved for the future financial center of Casablanca (whose perimeter must be set by regulation).
The provisions of Law 44-10 are intended to be amended with regard to conditions of eligibility and companies which are eligible for CFC status. A draft amendment bill mainly aims at making the following modifications:
- expansion of activities eligible for CFC status (e.g. providers of investment services, reinsurance);
- softening of conditions of eligibility (e.g. authorization of representative offices of financial firms to locate in CFC);
- payment of a fee to the "Moroccan Financial Board" (MFB) at the filing of application forms and an annual fee for other services rendered by the MFB;
- obligation for companies benefiting from the CFC status to abide with a code of conduct drafted by the MFB.
The economic influence of the city of Casablanca should be amplified by the project of Casablanca Finance City which aims to give a new financial dimension to the city, and to position it as a true base of finance at the regional and continental levels.