An offer dedicated to Equipment Industrials and Constructors
The automotive sector has expanded in Morocco during the last 5 years, especially with regard to the Equipment Industrials and the Constructors.
As the Moroccan automotive sector presents important development opportunities, the Government decided to strengthen the competitiveness of Morocco through the Emergence Pact, which started after the speech made by King Mohamed VI for the 55th anniversary of the People and King Revolution on August 20, 2008.
The Moroccan industrial strategy aims at developing the investment capacity of Morocco through the definition of a Moroccan Offer dedicated to Equipment Industrials and Constructors.
The Moroccan Offer for the automotive sector is articulated around three main points:
The setting up of export free trade zones and integrated industrial zones
The setting up of export free trade zones (in particular in Tangier and Kenitra), created by the law 19-94 dated February 15th, 1995, offering many advantages (as an example, the EFZ of Melloussa I and II are dedicated to the mega Renault plant and the plant of its subcontractors):
- Incentives from a corporate income tax viewpoint: exemption during 5 years followed by a reduced rate at 8,75% during 20 years; afterwards, the company benefits from a 17.5% rate (reduced rate applicable to all exporters);
- Absence of VAT and customs duties;
- Absence of WHT in case of distribution of dividends to foreign shareholders;
- Exemption of business tax during 15 years;
- Exemption of registration duties upon the setting up of the company and for the acquisition of the land;
- Out of the scope of the Moroccan foreign exchange regulation.
Setting up of integrated industrial zones, such as Rabat-Technopolis, created by the Circular Bill 9/2007 of May 7th, 2007 offering logistic and environmental advantages, due to their geographic locations and industrial development capacities:
- Allow the benefits of Hassan II Fund provisions;
- Allow the benefits of the favourable tax regime applicable to export companies (see below).
The development of qualified human resources, through a training grant system dedicated to automotive (by the Moroccan Employment Agency named “ANAPEC”)
In application of the Emergence Pact, a training contribution is granted per participating employee (who must be Moroccan citizens, graduated and looking for a job), according to the following scale:
Training upon the
hiring in EUR
Training during the continuous
formation in EUR
The assistance upon the investment through the HASSAN II Fund
The support of investments in some industrial sectors has been established since September 2000 by the Hassan II Fund and the Ministry of Industry, allowing to benefit from a grant if the industrial project is considered eligible according to several cumulative conditions:
- An eligible activity, such as manufacturing of electronic components for the automotive sector;
- The global amount of the investment project has to be higher than MAD 5 millions (duty and VAT free);
- The amount of the investment related to the equipment goods has to be higher than MAD 2.5 millions (duty and VAT free).
These grants are negotiable, but can neither exceed 10% of the global amount of the investment nor the amount of MAD 20 millions.
Regime applicable to export companies (out of export free trade zones, see above)
Moroccan standard law provides for a favorable regime applicable to export companies, operating as services providers or goods exporters:
- CIT: exemption of CIT on export turnover during 5 years; afterwards, taxation at a reduced rate of 17,5%;
- VAT: Exemption of VAT on exports (both services and goods).
How we can help
CMS has a network of international lawyers specialised in the Automotive sector who can help you develop Moroccan business opportunities.
You can also rely on CMS Bureau Francis Lefebvre Maroc, that has gained a certain expertise while assisting its clients in the automotive sector, among which are the following:
- RENAULT GROUP: tax assistance during the implementation of the RENAULT Group within the export free trade zone of Tangier, including the preparation of a draft tax appendix to the Master agreement of implementation and the assistance to tax audits.
- VALEO GROUP: assistance to tax audits.
- FAURECIA GROUP: legal assistance for the implementation within the zone of Kenitra.
- DELPHI GROUP: tax structuring and customs regime design.
Wilfried Le Bihan
T + 212 (0) 661 46 89 28