hanae belsakri
Rédaction Par Hanane Belaskri

19.09.2021 | Bh Adviser | Morocco

CREATING COMPANIES IN MOROCCO: HOW TO CREATE A COMPANY IN MOROCCO IN 15 DAYS?

SETTING UP A COMPANY

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Morocco is a country known for its openness to foreign investment and, as such, it occupies the third position in Africa in the World Bank’s Doing business 2021 ranking. Doing Business 2021 de la Banque Indeed, setting up a business in Morocco is quite simple as it only takes a few days to file for incorporation and register a limited liability company or a joint stock company.

This enables investors, whether local or foreign, to get up and running quickly and start focusing on business opportunities in Morocco.

That said, incorporating a company will require thorough preparation in advance and tailored support to avoid any potential complications during the incorporation process.

In this light, we will review the various steps involved in incorporating a company and starting a business in Morocco.

STEP 1: CHOOSING THE LEGAL STRUCTURE

Foreign businesses have several legal forms to choose in order to carry out their activities in Morocco. The different types of company in Morocco fall into three main categories:

  • Partnerships: General partnership, restricted partnership and joint venture.

  • Capital Companies: Limited Liability Company, Public Limited Company, Simplified Public Limited Company and Partnership limited by shares.

  • The Branch Office

In Morocco, the legal forms of companies most commonly used are the limited liability company (SARL) and the public limited company (SA).

The SARL is the legal structure usually chosen by investors since it represents more than 97% of the 162,877 companies incorporated during the period 2010-2014 according to the Moroccan Office of Industrial and Commercial Property (OMPIC).

For these reasons, we will only explain the features of the SARL, the SA and the branch:

LIMITED LIABILITY COMPANY (SARL)

The SARL or Limited Liability Company is a legal entity with legal personality. It can be set up by a single partner (known as a single-partner SARL) or by several partners.

This legal form is generally suitable for small and medium-sized enterprises and has the following main characteristics

  • Non-free transferability, except between spouses or relatives, and non-negotiability of the company shares.

  • A minimum of two founding partners, except for single-member SARLs.

  • There is no lower limit in terms of minimum share capital. However, it is preferable for reasons of credibility with your future partners (banks, customers, suppliers) to have a share capital of at least 100 000 MAD.

  • The director(s) of the SARL are not required to be resident in Morocco or to hold shares in the company.

If the SARL’s turnover (excluding tax) exceeds MAD 50,000,000, an auditor must be appointed.

THE PUBLIC LIMITED COMPANY (SA)

This is the second most popular legal form in Morocco. The shareholders hold a negotiable security (share) and their liability for losses is limited to the amount of their contribution.

The main characteristics of the SA are :

  • the free transfer and negotiability of shares.

  • A minimum of 5 shareholders.

  • Minimum share capital of 300,000 MAD or 3,000,000 MAD in case of a public offer

  • An auditor must be appointed.

There are two types of public limited companies:

  • A public limited company managed by a management board (at least three members and at most twelve members).

  • A public limited company run by a management board responsible for the management of the company and a supervisory board which controls the management of the management board on behalf of the shareholders.

THE SIMPLIFIED JOINT STOCK COMPANY (SAS)

A Branch Office is a company established by a foreign parent company. As such, it has no legal authority (legal personality) or assets (own property or share capital) separate from the parent company.

The shareholders of the SAS must be companies with a share capital of at least 2,000,000 dirhams, which is the value of exchange in foreign currency.

The SAS is a joint stock company which is not subject to restrictive rules such as those of a public limited company or a limited liability company. The management provisions are in the articles of association. The only requirement is to appoint a chairman.

BRANCH OFFICE

A Branch Office is a company established by a foreign parent company. As such, it has no legal authority (legal personality) or assets (own property or share capital) separate from the parent company.

The Branch Office is managed by the legal representative of the head office, who is usually an employee.

As the SARL is the legal form most used by investors in Morocco, we will describe its incorporation process. The incorporation of SAs and branches will be the subject of another blog post.

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STEP 2: OBTAIN THE NEGATIVE CERTIFICATE

The Negative Certificate is an administrative document issued by the Moroccan Office of Industrial and Commercial Property (OMPIC). This administration acts as a business search in Morocco or a business directory in Morocco and periodically updates the list of businesses in Morocco. It certifies that the business name applied for by the investor is available and can be registered in the trade register.

The application for a Negative Certificate is made online on the OMPIC website, and its validity period has been recently reduced to 90 days.

STEP 3: SIGNING A COMMERCIAL LEASE OR DOMICILIATION CONTRACT

To be duly registered, any company in Morocco must have a registered office address.

In this respect, two options are possible:

  • Renting premises by signing a commercial lease contract.

  • To be domiciled in a business centre.

The domiciliation is generally the most popular option for companies because of its low cost and simplicity. Indeed, 72% of newly created companies in Casablanca have used domiciliation in their start-up phase, according to estimates by the Moroccan Association of Business Centres (AMCA).

STEP 4: OPENING A BUSINESS BANK ACCOUNT

This process is mandatory for SAs and SARLs with paid-up capital exceeding MAD 100,000.

This consists of opening a temporary bank account in a local bank where the company’s share capital is transferred.

Once the capital has been transferred, the bank issues a capital blocking certificate.

STEP 5: SIGNATURE OF THE COMPANY'S ARTICLES OF ASSOCIATION

The drafting of the company’s articles of association is the most critical stage in the formation of a company in Morocco.

In fact, the articles of association are the company’s founding documents and cover all the rules governing relations between shareholders and towards third parties. It is an essential document which will define the rules which will guide your company and which will represent the “constitution” of your company.

This document can be drafted in two different ways:

  • Get a professional (accountant or company lawyer) to prepare all the articles of association.

  • Drafting your company's articles of association yourself.

It is recommended that you call on a professional to draw up the articles of association in order to avoid any inconvenience or unpleasant surprises at the commercial court.

In principle, it is not a good idea to use standard templates (which can easily be found on the Internet). These templates will never correspond to the specificities of your company and its operating model.

Having completed the drafting of the Articles of Association, the founding partners can sign the final Articles of Association without being physically present in Morocco.

STEP 6: SUBMITTING THE INCORPORATION FILE TO THE REGIONAL INVESTMENT CENTRE (CRI)

Negative certificate, Final Articles of Association of the company, CRI single form, Copies of the identity cards or passports of the directors and shareholder representatives. Articles of Association and extract from the commercial register of the parent company, if applicable. All the incorporation documents are then filed with the Regional Investment Centre in the city where the company’s registered office is located.

The CRI acts as a one-stop-shop for the incorporation of companies in Morocco and brings together the services of the commercial court, the tax authorities, the Moroccan Office for Business Research (OMPIC), and the Social Security (CNSS).

STEP 7: COLLECT THE INCORPORATION FILE FROM THE CRI

In practical terms, the company is usually incorporated within a week to 10 days from the date of filing.

The documents issued by the CRI include

  • A Form for the notification of the company's identifiers.

  • A Certificate of Registration for Business Tax.

  • A Declaration of Existence issued by the tax authorities.

  • A Certificate of Registration with the National Social Security Fund (CNSS)

  • The originals of the duly registered articles of association.

The Trade Register issues the extract from the Trade Register called Model J within one week of the company’s constitution.

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STEP 8: LEGAL PUBLICATION

As soon as the company is incorporated, the formalities of legal publication in a newspaper and in the official bulletin must be completed.

STEP 9: COMPLETE OPENING OF THE BUSINESS BANK ACCOUNT

Upon completion of these steps, the entire incorporation file is sent to the bank for the final opening of a business bank account.

STEP 10: DECLARATION TO THE OFFICE EXCHANGE ADMINISTRATION

Under the foreign exchange regulations foreign investors are allowed to freely transfer abroad all the proceeds of their investments in Morocco(dividendes,sale price of shares and liquidation proceeds) provided that the initial investment is made in one of the foreign currencies listed by the Moroccan central bank.

In view of the subsequent transfer of dividends abroad, a report of the foreign investment in Morocco must be submitted to the Office des Changes.

Lastly, the final tasks to be completed are ordering a seal for your company and choosing an accounting firm for bookkeeping and tax compliance.

SOME PRACTICAL ADVICE

When starting a business in Morocco, it is recommended that a professional carry out a preliminary study of the legal, social, and tax implications of your project in Morocco.

The foreign investors must transfer the initial paid-up capital in foreign currencies to benefit from the free transfer of the profits generated by these investments.

It is important not to use a standard model of statutes that do not correspond to the specificities of your company and its operating model.

It is recommended to draft a partnership agreement when the company has several shareholders.

The Choice of business centers is essential. You should ensure that their office is located in a reputable business district. You should also check that it is a well-established business and that it is not in danger of closing unexpectedly. You should also be particularly careful when signing your domiciliation contract.
 

It is also advised that you use an English-speaking advisor (accountant or business lawyer)to avoid any potential problems during the incorporation process.

Lastly, intellectual property aspects should not be overlooked. It is therefore strongly recommended to protect your business with a local trademark to avoid any potential litigation.

After the Crown pandemic, Morocco developed a strategy to attract foreigners and entrepreneurs willing to start a business in Morocco, with operating basic freedom for investors and entrepreneurs willing to start a business in Morocco the right to transfer profits, the right to transfer products, and the facilities to open bank accounts in Morocco.

Morocco has carried out several economic, social, and legal reforms to ensure and facilitate the residence of foreign investors in Morocco by encouraging tax measures, simplification, and standardization of procedures through the creation of regional centers for investment.

Morocco has one of the best investment climates in the world, offers a luxurious environment, and is the largest consumer market in Africa. It attracts investors with its stable management and protection of intellectual property rights in Morocco.


Morocco attracts many investors to start businesses in Morocco, so why not become one of these investors?

A ” business startup ” is a company that is unclear 1. What is its market? 2. Who are its target customers. 3. How to profit income.

Hanane Belaskri is an Accountant and Tax Advisor, She is the Managing Partner of BH Adviser,the accounting firm that supports foreign companies in their accounting, payroll and tax compliance, so that they can grow with confidence in Morocco and Africa.
Do not hesitate to contact us for more information regarding the incorporation of your company in Morocco.

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