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Last updated: January 2013 UK Trade & Investment Doing business in Morocco
Are you a member of a UK company wishing to export overseas? Interested in entering or expanding your activity in the Moroccan market? Then this guide is for you!
The main objective of this Doing Business Guide is to provide you with basic knowledge about Morocco; an overview of its economy, business culture, potential opportunities and an introduction to other relevant issues. Novice exporters, in particular will find it a useful starting point. Further assistance is available from the UKTI team in Morocco. Full contact details are available at the end of this guide.
The purpose of the Doing Business guides, prepared by UK Trade & Investment (UKTI) is to provide information to help recipients form their own judgments about making business decisions as to whether to invest or operate in a particular country. The Reports contents were believed (at the time that the Report was prepared) to be reliable, but no representations or warranties, express or implied, are made or given by UKTI or its parent Departments (the Foreign and Commonwealth Office (FCO) and the Department for Business, Innovation and Skills (BIS)) as to the accuracy of the Report, its completeness or its suitability for any purpose. In particular, none of the Reports contents should be construed as advice or solicitation to purchase or sell securities, commodities or any other form of financial instrument. No liability is accepted by UKTI, the FCO or BIS for any loss or damage (whether consequential or otherwise) which may arise out of or in connection with the Report.
Content
INTRODUCTION........................................................................................................................4 PREPARING TO EXPORT TO MOROCCO..............................................................................9 HOW TO DO BUSINESS IN MOROCCO................................................................................10 BUSINESS ETIQUETTE, LANGUAGE AND CULTURE........................................................13 WHAT ARE THE CHALLENGES? ........................................................................................14 HOW TO INVEST IN MOROCCO............................................................................................15 CONTACTS..............................................................................................................................16 RESOURCES/USEFUL LINKS...............................................................................................17
Introduction
Morocco is situated in the north west of Africa and has a unique & strategic position - 3,000 km of coastline on the Atlantic Ocean & 550 km on the Mediterranean Sea, with mountains, plains, desert, rivers and about 1,000,000 hectares of forests. The total area is 446 550 km2. Morocco has made remarkable progress over the past few years in democratisation, respect for human rights and social and economic reform. A vibrant civil society and a vocal press contribute to one of the most open and tolerant of Middle East and North Africa countries. Morocco enjoys financial stability and economic reform is firmly on the Governments agenda. On October 13, 2008, the European Union granted Morocco "advanced status, reflecting the EU's decision to strengthen trade and political ties as well as to reward Morocco for its economic and democratic reform process. An EU-Morocco Agricultural Agreement liberalising trade in agricultural products, fish and fishery products came into effect in July 2012. The EU also began negotiating a Deeper Comprehensive Free Trade Agreement with Morocco in 2012. Its main objective is the progressive integration of Moroccos economy into the EU single market. The agreement will cover a full range of regulatory areas of mutual interest, such as trade facilitation, technical barriers to trade, sanitary and phytosanitary measures, investment protection, public procurement and competition policy. In June 2011, the Parliamentary Assembly of the Council of Europe (PACE) granted the Moroccan parliament the "Partner for Democracy" status. Diplomatic links between Britain and Morocco go back at least seven centuries. Britain is one of Moroccos oldest partners, and was Moroccos main trading partner during the 19th century. Over 400,000 British tourists visited Morocco in 2012 ranking third after the French and the Spanish. Research by the Boston Consulting Group in 2010 identified 40 African companies that are growing rapidly and emerging as global competitors. Five of those companies are headquartered in Morocco. The research also identifies a group of fast-growing nations which it describes as African Lions, Algeria, Botswana, Egypt, Libya, Mauritius, Morocco, South Africa and Tunisia, who will drive the continents growth, similar to the Asian Tigers. The UK is among the top six foreign investors in Morocco.
Attractive facilities and rebates for trade and investment Free Trade Agreements with several countries Industrial Parks/Off shoring centres. Free Trade Zones, Export Processing Zones and logistics centres Availability of Regional Investment Centres (one-stop-shops for inward investors) in all regions. Tax incentives and ease of repatriation for profits and dividends Petroleum Code / Mining code / other sectorial codes
Government sponsored development programs (e.g. Hassan II Fund) Investment Promotion and Protection Agreement and Double Taxation Agreement with the UK for the protection of existing and future investments.
Opportunities in Morocco
Morocco offers opportunities in all sectors. Sectors where UK expertise particularly matches Moroccan demand includes: Construction and Infrastructure - there are major urban and rural infrastructure projects, new motorways, road and rail construction, urban and national transport development programmes, port and airport upgrading, building of new towns and industrial areas. Tourism and Recreation the governments ambitious tourism agenda offers wide scope with leisure facilities, hotel construction, marina and resort development, management training and catering. Safety and Security one of Moroccos top priorities. Great opportunities for fire, safety and security companies border and access control, surveillance and detection equipment, imaging and police technology. Financial Services The Casablanca Stock Exchange is the second largest in Africa and aspires to be the regional hub for raising finance. Moroccan Banks are expanding throughout West Africa, including through purchase of privatised local banks. Morocco launched its regional financial services centre (Casablanca Finance City) in 2012 and is developing it in collaboration with Singapore. Morocco is starting to show an interest in Islamic Finance; Energy and Environment privatisation of utilities continues. Morocco has ambitious plans to develop renewable energy resources, both due to increased awareness of environmental issues and in order to reduce dependence on imported energy; Water and waste management improvements in the water infrastructure are a key national objective. Concessions are being awarded to private companies to run water and sewerage networks. Those areas where Morocco is concentrating its own efforts in accordance with its industrial development plan (the plan dmergence) e.g. automotive, aeronautics, etc offer opportunities for cooperation between UK and Moroccan companies. Opportunities also exist in areas that underpin Moroccos development such as education and training, healthcare etc which attract both a considerable budget from the Moroccan Government and International aid money. Agriculture continues to be an important part of Moroccos economy (14% of GDP, albeit falling, and employs some 40% of the population) and offers niche opportunities.
to 2009 figures. The upward trend continued in 2011 as exports increased by 9.8% to a total of 739m. Moroccan exports to the UK in 2011 totalled 719m. Main products exported to Morocco from the UK are as follows: TOP UK EXPORTS JAN-SEP 2012 Gas natural & manufactured Road vehicles Petroleum & related products Metalliferous ores & metal scrap Textile yarns & fabrics Medicinal and pharmaceutical products Power generating machinery & equipment Electric machinery & Appliances Beverages General industrial machinery Miscellaneous manufactured articles Chemical materials & products Machinery specialised for particular industries TOP UK EXPORTS 2011 Gas natural & manufactured Petroleum & related products Metalliferous ores & metal scrap Road vehicles Iron & Steel Medicinal & Pharmaceutical products Textile yarns & fabrics Other Transport Equipment Machinery specialised for particular industries Plastics in primary forms Power generating machinery & equipment Chemical materials & products Miscellaneous manufactured articles Beverages TOP UK EXPORTS 2010 Gas natural & manufactured Petroleum & related products Road vehicles Miscellaneous manufactured articles Textile yarns & fabrics Medicinal & Pharmaceutical products Metalliferous ores & metal scrap Specialized industrial machinery Cereals & Cereal preparations Plastics in primary forms Beverages Office machinery & ADP machinery Power generating machinery VALUE M 104.7 66.9 45.7 31.4 27.6 16.6 11.4 8.9 7.8 7.7 7.2 7 6.3 VALUE M 70.9 64.9 60.6 53.9 50.2 36.2 34.6 26.1 12.4 12.3 11.5 10.1 9.9 8.7 VALUE M 112.5 77.5 49 45 35.5 22 20.5 16.5 13 12 11 11 10.5
There is an Investment Promotion and Protection Agreement and Double Taxation Agreement with the UK for the protection of existing and future investments. British companies represented in Morocco include household names such as Shell, Unilever, GlaxoSmithKline, Cadbury, G4S and Imperial Tobacco. UK Trade & Investment Doing business in Morocco
Economic Overview
Over the last decade, Morocco has significantly liberalised its trade regime and strengthened its financial sector. These reforms have enhanced the overall productivity of the economy and heightened its resilience to shocks. In 2011 Morocco had a GDP of $99 bn and a GDP per capita of $3,084. According to the IMF GDP growth in 2011 was 4.9%, but the IMF forecast this will dip in 2012 to 2.9%, before rebounding to 5.3% again in 2013. Inflation has remained at around 1% over the last three years, but the IMF forecast that it will rise to 2.2% in 2012 and to 2.5% in 2013 due to the impact of rising global energy and food prices. The budget deficit at the start of 2012 was around 7% of GDP but the Government hopes to reduce this to 5%. Estimated public debt as a ratio of GDP was 65% in 2011 (2011 estimate for UK is 79.5%). Unemployment reached 9% in 2011 and the IMF predicts that it will decrease slowly to 8.9% in 2012 and 8.8% in 2013. Agriculture remains an important part of the economy. It employs around 39.5% of the population and represents about 14-6% of GDP, a percentage that is falling but remains substantial. Low rainfall and unusually low temperatures in early 2012 have resulted in lower cereal crop yields, so Morocco will have to increase cereal imports. Increased spring rainfall has however improved the outlook for the fruit and vegetable crops. There is a large public sector, and long-term challenges include preparing the economy for freer trade with the US and EU, raising living standards, and improving education and job prospects for Morocco's youth. The authorities have realised that reducing poverty and providing jobs is key to domestic security and development. The coalition government appointed in 2012 has made several announcements stressing their intention to improve governance, reform the justice system, and increase transparency in order to boost the economy and attract foreign investors. Morocco has displayed clear regional ambitions with projects such as the Tanger Med and Nador West med ports and the upcoming Casablanca finance city. It has signed Free Trade Agreements with the EU and the US for a gradual liberalization of trade and dismantling of customs tariffs by 2012/13. Morocco has also signed free trade agreements with Turkey, Jordan, Tunisia and Egypt and maintains growing business ties with Sub-Saharan African countries. Negotiations on an EU-Morocco fisheries agreement will resume in 2012 after an extension of the previous agreement was rejected by the European Parliament in late 2011.
Population
The current population of Morocco is approximately 33 million. 52 % live in urban areas and 48% in rural ones. Almost half the population is below the age of 20 and a very high percentage of the population is uneducated and illiterate. However, illiteracy rate in Morocco dropped from 43% in 2004 to 30% in 2010, according to recent figures issued by the Education Ministry.
Political Overview
Morocco has a history as an independent nation state stretching back to the 9th century, interrupted only by the brief interlude of the Protectorate (1912-1956) when the country was divided into French and Spanish zones. For many years Manchester had powerful commercial links with Morocco, especially Fes, and as a result a number of Moroccans became British protected, which included the right to a passport. Morocco, unlike most of the rest of the Middle East, was never part of the Ottoman Empire. Morocco is a constitutional monarchy. King Mohammed VI, who came to the throne in 1999, retains much of the executive power, but the Parliament and part of the government (with the exception of the Prime Minister and key Ministers) is democratically elected. Morocco has a bicameral Parliament consisting of an Upper House or Chamber of Counsellors, and a Lower House or Chamber of Representatives.
King Mohamed VI has recently taken steps to address some of the demands of the population, including a call for major constitutional reforms to move the country towards more democracy. A new constitution was approved in July 2011 and parliamentary elections took place on 25 November 2011. The moderate Islamist party (Development and Justice Party PJD) won most votes but not a majority so formed a coalition government with four other parties plus some independent MPs in January 2012. The new government is giving priority to social issues, with particular emphasis on healthcare, education, employment, housing and justice. The Moroccan Government sees itself as a force for stability in the region. Morocco has played a solid role in support of the Middle East Peace Process, has d taken part in a number of UN peacekeeping operations and is currently a non permanent member of the UN Security Council. To the South, the Moroccans administer the disputed territory of the Western (formally Spanish) Sahara. Moroccan/Algerian relations are strained over the question of Western Sahara and the land border between the two remains closed. Both Governments are however working to improve relations and there has been an increase in Ministerial visits in both directions. This improvement in relations has led to hopes that the Arab Maghreb Union might be revitalised leading to greater regional trade integration and consequently to greater prosperity.
Getting here
Passports/visas British citizens holding valid British passports can travel to Morocco for up to three months without a visa. But passports should be valid for at least six months beyond the planned date of departure. By Air There are several International airports throughout Morocco, most having regular services to Europe although not necessarily the UK. But only Royal Air Maroc have direct flights between London and Casablanca (in addition to flights between London and Marrakech). Several low cost airlines (e.g. Easy jet, Ryan Air and Air Arabia) and BA operate flights from the UK to Marrakech and other tourist destinations. Taxis from Casablanca airport to the city centre cost approximately DH 250 (around 19) and the trip may take up to 1 hour depending on traffic conditions. There are also airport buses and a frequent train service to the City centre.
Morocco is not a market that can be successfully entered or cultivated by correspondence. There can be a reluctance to disclose information over the telephone. Regular visits and personal contact are vital in establishing a relationship of confidence with potential agents and customers in Morocco. The business language is French. Whilst knowledge of English is growing rapidly, with increasing numbers of businessmen fluent in the language, ability to work and supply material in French will greatly increase your options. Gateways/Locations - Key areas for business Although Rabat is the capital city and seat of Government, Casablanca is by far the largest city with a population of around 4 million people. It is the commercial and industrial heart of the country, accounting for over 60% of the countrys economy. 30% of the banking network and 38% of industrial units are based in the city. Virtually every significant business enterprise has its headquarters/main office in Casablanca. Tangiers, especially with the development of the new Tangier Med port and Free Zone, is also a major centre. For business in the tourism sector, Marrakech, Fes and Agadir are the main tourist destinations The UK Trade & Investment Team in Morocco is based at the British Consulate General in Casablanca there are no UKTI staff in Rabat.
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However, as already noted, even when exporting direct it is advisable to appoint a local representative. The main types of local company are: General Partnership Limited Partnership Private limited Company (Societ Responsabilit Limite - S. A. R. L) Limited liability Company (Societ Anonyme - S. A.) Limited partnership with shares Joint - venture company
The most common are the limited liability company and the private limited company.
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Responding to Tenders
In Morocco all supplies and services to government bodies are awarded through public tender. These are published in local newspapers (essentially in Le Matin and LEconomiste), on individual bodies websites and on www.marchepublic.ma. Although increasing numbers of tenders are issued in English, correspondence and bid documents should be submitted in French unless the tender specifies otherwise. Bids that fail to adhere strictly to the published requirements will be rejected. Companies may submit their bids direct but it is generally helpful to have a local representative to advise on procedures and requirements and to attend the bid opening in order to answer any queries.
Documentation
Documentation must be prepared with great care, and strictly in accordance with the customer's specification; any discrepancy, however minor, can lead to difficulties with the customs and to substantial delays in payment. The documents should be sent in advance of the goods. The documents most often required are: Proforma invoices (the country of origin of the goods must be shown with the name of the manufacturer) Bill of Landing (airway bill for goods imported by air) showing gross weight, size and volume of the consignment and the name and address of the consignor Import or export documents Certificates of origin: documents that certify the origin of the goods with a view to application of preferential rates (mainly for temporary import) Banker's certificate for customs clearance of imports (issued by the bank where the import document holder is domiciled) Packing list
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Language
Arabic and Tamazight are the official languages of Morocco, but the business language is French although an increasing number of business people can speak English. It is advisable that written correspondence and trade literature should be in French. The forms of address acceptable in France are also acceptable in Morocco. Thus, a Minister may be addressed as Monsieur le Ministre; the director of a company would be addressed as Monsieur le Directeur etc. A list of local translators and interpreters is available from the British Consulate in Casablanca.
Negotiations
Contacts need to be cultivated by personal contact and regular visits to the market for a successful business partnership. Morocco is also a price sensitive market and the quality/price ratio must be attractive for the business relationship to go any further.
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Development Assistance
Morocco is a substantial recipient of aid and loans from the World Bank, the United Nations Development Programme and other United Nations agencies, Arab and Islamic development funds, the EU and the European Investment Bank. A wide range of developmental and infrastructure projects have been financed with this aid in agriculture, education, energy, mining, ports, roads, transport, water supply, health and housing. Morocco also receives various forms of aid through bilateral programmes and international donors and remains one of the largest beneficiaries of MEDA (Euro Mediterranean Partnership an EU programme) funds. Morocco is also one of the beneficiary countries of the Deauville Partnership, which agreed in April 2012 to launch a new initiative to help five Arab countries, including Morocco, to access capital markets to accelerate their development. Britain is one of the largest single contributors (Euros 100 million over 3 years) to the EU development programme for Morocco, as well as a major contributor to UN programmes on governance, health, environment and rural development in Morocco. During his visit to Morocco in October 2011, Foreign Secretary William Hague launched the UKs Arab Partnership programme in Morocco to support reforms related to political participation, fight against corruption, and good governance. Under this programme the UK is funding projects worth just under 1 million in 2012-13.
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Contacts
If you have a specific export enquiry about the Morocco market which is not answered by the information on this report, you may contact: Ms Badia Mrani - Trade & Investment /IT Support Officer Email: badia.mrani@fco.gov.uk Tel: +212 (0) 522 85 74 17
In the UK
Kate Roye Senior Country Manager, Morocco UK Trade & Investment 1 Victoria Street, London SW1H 0ET Tel: 020 7215 4892 Email: kate.roye@ukti.gsi.gov.uk Sandrine Jayet Country Manager, Morocco Tel: 020 7215 4947 Email: sandrine.jayet@ukti.gsi.gov.uk
Others
British Embassy 28 Avenue Sidi Mohamed Souissi - Rabat Tel: +212 (0) 537 63 33 33 Fax: +212 (0) 537 75 87 09 Web site: ukinmorocco.fco.gov.uk Mr Clive Alderton HM Ambassador (from December 2012) Mr Alan Gogbashian Deputy Head of Mission British Chamber of Commerce for Morocco (BCCM) 65 Avenue Hassan Seghir Casablanca Tel: +212 (0) 522 44 88 60 Fax: +212 (0) 522 44 88 68 Email: britcham@menara.ma Web site: www.bccm.co.ma Mr Mohamed Raihani - President Mrs Ilham Bennis General Manager The British Chamber of Commerce in Casablanca, which has about 400 members, works to increase trade between Morocco and the UK and is a successful example of its kind. Its mission is to help businesses succeed by promoting their interests and expanding their opportunities in the UK market.
Ms Fatima-Zahra Kerdoum Trade & Investment Officer Sector: Renewable Energy E-mail: fatima-zahra.kerdoum@fco.gov.uk Tel: +212 (0) 522 85 74 21 UK Trade & Investment Doing business in Morocco
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Resources/Useful Links
Gov.uk
GOV.UK provide an overview of export basics including licensing, customs procedures, classifying and movement of goods, other regulatory information and export paperwork issues. It also introduces exporters to the UK Trade Tariff.
https://www.gov.uk/browse/business/imports-exports
Country Information:
BBC Website:
http://news.bbc.co.uk/1/hi/country_profiles/default.stm https://fco-stage.fco.gov.uk/en/travel-and-living-abroad/travel-advice-by-country/
http://www.cilt.org.uk/workplace/employer_support/in_your_area.aspx
Economic Information:
Economist:
http://www.economist.com/countries/
Export Control
Export Control Organization:
Intellectual Property
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Market Access
Market Access Database for Tariffs (for non-EU markets only):
http://mkaccdb.eu.int/mkaccdb2/indexPubli.htm
https://www.gov.uk/government/topics/europe
http://www.bsigroup.com/en/sectorsandservices/ Disciplines/ImportExport/
National Physical Laboratory: http://www.npl.co.uk/ Intellectual Property: http://www.ipo.gov.uk/
Trade Statistics:
National Statistics Information: http://www.statistics.gov.uk/hub/index.html UK Trade Info: https://www.uktradeinfo.co.uk/
Travel Advice:
FCO Travel: http://www.fco.gov.uk/en/travel-and-living-abroad/
Produced by the UKTI team in Morocco Last Updated: December 2012 Crown Copyright 2012 You may reuse this information (not including logos, images and case studies) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit www.nationalarchives.gov.uk/doc/open-government-licence/ or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk. This publication is also available from our website at www.ukti.gov.uk or for more information please telephone +44 (0)20 7215 5000.
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