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developement

The Industrial Development Plan

Was first launched in 2014 , with the aim of building an efficient and competitive industry to generate jobs, increase the industrial share in the national Gross Domestic Product, and improve Morocco’s attractiveness for investments . It paved the way for the creation of numerous funds and strategies aimed at supporting said investments .

The 2020-2025 phase focuses mainly on “the consolidation of the achievements made within the framework of the first phase of the plan and their generalization to all regions, by integrating small and medium enterprises and by placing industry at the heart of technological transformations .”

Source: Ministry of Industry and Commerce

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developement

The Industrial Development Fund (FDI)

A competitive financing offer is in place under a partnership agreement between the state and the banking sector that commits to support industrial companies (competitive rates, support for restructuring, support for internationalization, etc.) and to provide the necessary consultancy and support to project leaders.

Granted that the company is in accordance with the criteria, it can benefit from the following :

  • A global bonus for tangible and intangible investments of up to 30% of the total investment amount, excluding taxes ;
  • An export growth bonus of up to 10% of additional export sales ;
  • An annual import-substitution bonus ;
  • An annual incentive to set up in Morocco of up to 2% of the additional annual sales generated by orders addressed to Morocco for companies intending to reside in the country.

Source: Ministry of Industry and Commerce

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Investment Promotion Fund (FPI)

Under the Investment Charter and aimed for all of the industrial sectors, the Investment Promotion Fund (FPI) offers partial coverage by the Government of certain expenses related to :

  • The acquisition of property for by covering up to 20% of the cost of land ;
  • External infrastructure, reavhing up to 5% of the total amount of the investment (10% in the case of an investment in the sector of spinning, weaving or finishing) ;
  • Vocational training, by taking charge of up to 20% of the cost of the training .

These contributions may be combined as long as the total contribution of the state does not exceed 5% of the total investment programmed, or 10% in the case of investment in the sector of spinning, weaving or finishing, or when the investment project is located in a suburban or rural area .

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developement

Hassan II Fund for Economic and Social Development

It offers grants of up to 15% of the total investment amount, capped at 30 million dirhams, in the automotive, aeronautics and electronics sectors, with the following conditions:

  • 30% of the cost of professional buildings on the basis of a maximum unit cost of 2 000 dirhams per square meter before tax (excluding any contributions by the state for the acquisition of property and/or the construction of professional buildings) ;
  • 15% of the cost of acquisition of new capital goods (excluding import duty and tax) (excluding any contributions by the state for the acquisition of capital goods) ;
  • Regarding the automotive industry only: 15% of the purchase of used equipment imported and intended for stamping, plastic injection or in the manufacture of tools and moulds (excluding any other state contribution paid for the acquisition of capital goods) ;

As part of the Industrial Acceleration Plan, aid from the Hassan II Fund has been extended to include the chemicals and para-chemicals industries (ICP). The Fund provides a financial contribution of up to 15% of the total amount of the investment, capped at 30 million dirhams, detailed as follows :

  • 10% of the cost of commercial buildings (excluding any other state contribution given for the acquisition of land and/or construction of professional buildings) ;
  • 20% of acquisition cost of new capital equipment (excluding any other state contribution given for the acquisition of capital equipment) .

Source: Ministry of Industry and Commerce

FPI Eligibility Conditions

Morocan legislations are oriented towards improving the tax system applicable in the free zones in order to favour the establishment and development of industrial, commercial and services activities in these zones .
The tax system applicable is extremely advantageous (particularly regarding corporation tax) and encouraging for any private industrial or commercial investor :

  • The exemption from import duty : On capital equipment, materials and tools necessary for the implementation of the investment project with a total cost greater than 200 million dirhams applies for 36 months counting from the signing of the investment agreement, this exemption is extended to parts, replacement parts and accessories imported at the same time as the aforementioned equipment .
    Furthermore, Goods entering the free zone as well as rendered services from Moroccan territory are VAT exempted ;
  • The exemption from VAT : On imports of capital equipment, materials and tools necessary for the implementation of the investment project with a total cost greater than 200 million dirhams applies for 36 months from the start of activity by the company or from the date of issuance of the building permit, and may be extended by six months in the event of force majeure (renewable once), this exemption is extended to parts, replacement parts and accessories imported at the same time as the aforementioned equipment ;
  • Corporate Tax : Exemption from corporation tax (IS) for the first 5 years, and then a rate of 20% for the following 20 years ;
  • Income Tax : Exemption from income tax (IR) during the first 5 years, and then a reduction of 80% of tax on gross earned income during the following 20 years;
  • Taxes of dividends and Profit Shares : Dividends and other similar proceeds from shareholding, distributed by companies located within the free zone and generated by activities carried out in these zones are exempt from tax on dividends from stocks, shares and similar income when paid to non-residents ;
  • Registration fees and stamp duty on capital operations : Acts of incorporation and capital increase and acquisitions of land for implementation of the investments is exempted from registration fees and stamp ;
  • Tax on patents and urban Tax : Companies based in the free zones enjoy the benefit of full exemption : From the tax on patents for the authorized activities they carry out during the first 15 consecutive years as of the start of operation, and from the urban tax for buildings, machines and equipment attributed to the carrying out of authorized activities for a period of 15 years running as of the completion or the installation thereof ;
  • Specific aid for the offshoring sector : Tax assistance dedicated to offshore companies has been provided, namely :

    • -State contribution pertaining to income tax for offshoring companies established in Integrated Industrial Platforms (P2I) in order to reduce the burden of income tax so that it does not exceed 20% of taxable gross revenue ;

    -Full exemption from company tax during the first five years, and a taxation rate of +17% thereafter .

    Moreover, under the Industrial Acceleration Plan, an agreement was concluded with the national telecommunications operators with the goal of improving the telecommunications services offered to the companies of the sector (CRM, ITO and BPO) in order to increase their competitiveness .

The small and medium-sized enterprises of the sector can benefit from specific support within the framework of programmes developed by the National Agency for the Promotion of Small and Medium-sized Enterprises (ANPME):

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