Morocco’s Investment Charter: A Strategic Shift to Attract Foreign Investments and Promote Economic Growth
Africa Focus
Law Update: Issue 360 - Africa and Transport & Logistics
Nesrine RoudanePartner, Head of Office - Morocco
Morocco is a country with a strategic geographic location bridging continents, has taken a bold step towards enhancing its investment climate and attracting foreign direct investments (FDIs). The recently enacted Law Framework No. 03-22, known as the Investment Charter, sets out to support specific investment projects, reduce regional disparities in attracting investments, and prioritize key sectors for development.
Published in the official bulletin No. 7151 on December 12, 2022, the Investment Charter marks a significant departure from its predecessor, Law Framework No. 18-95 of November 8, 1995. With 42 articles, it lays out nine fundamental objectives that aim to shape Morocco’s economic landscape for the future.
Creating Stable Employment: A primary objective of the Investment Charter is to stimulate job creation by supporting investment projects that meet defined criteria.
Reducing Disparities in Investment Attraction: The Charter seeks to bridge the gap between regions by fostering investments in provinces and prefectures across the country.
Directing Investments Towards Priority Activities and Future Industries: By encouraging investments in key sectors and emerging industries, Morocco aims to drive its economic growth and stay at the forefront of innovation.
Enhancing Attractiveness as a Regional and International FDI Hub: The Charter aspires to elevate Morocco’s status as a sought-after destination for foreign direct investments in the region and on the global stage.
Promoting Exports and International Presence of Moroccan Companies: With a focus on export-oriented businesses, the Charter aims to boost internationalization and market access for Moroccan enterprises.
Encouraging Import Substitution through Local Production: The Charter seeks to reduce dependency on imports by promoting and supporting domestic production.
Achieving Sustainable Development Goals: In line with the United Nations’ Sustainable Development Goals (SDGs), the Charter aims to align investments with sustainable and socially responsible practices.
Improving the Business Climate: By streamlining procedures and enhancing the ease of doing business, Morocco aims to attract more investments and spur economic growth.
Increasing the Contribution of Domestic and International Private Investment: The Charter places importance on both domestic and international private investments to diversify the funding sources for economic development.
The Charter aims to boost internationalization and market access for Moroccan enterprises.
Compared to the previous charter, the new Investment Charter reflects Morocco’s ambition to position itself as a gateway to Africa. Unlike its predecessor, which mainly focused on tax relief, the new Charter adopts a more comprehensive and strategic approach. It aims to create a transparent and investor-friendly framework built around three core axes:
Comprehensive Support for Investment Projects:
Improving the Business Climate:
Unified Governance and Territorialization of Investments:
One of the core objectives of the Investment Charter is to support investment projects that meet specific criteria. It aims to reduce regional disparities between provinces and prefectures in terms of attracting investments and emphasizes the development of priority sectors. To achieve this, the charter introduces a system of comprehensive support through four main devices.
Common Investment Primes: The charter offers various common investment primes, such as the Employment/Capital Expenditure (CAPEX) ratio, gender-focused initiatives, future-oriented job creation, sustainable development, and local integration, all aimed at encouraging investments that align with these key aspects.
Territorial Primes: To promote investments in different regions, the charter grants a territorial prime of up to 15% of eligible investments for projects established in specific provinces and prefectures.
Sectorial Primes: The charter provides an additional 5% bonus on eligible investments for projects operating in priority sectors such as tourism, industry, digital economy, transportation, outsourcing, logistics, cultural industries, aquaculture, renewable energy, and waste management.
Recognizing the significance of a favorable business environment, the Investment Charter identifies seven priority areas for improving the business climate in Morocco:
Simplification of Procedures and Administrative Decentralization
Facilitating Access to Land
Enhancing Logistics Competitiveness
Promoting Green Energy Access
Offering Tailored Training Programs
Supporting Research and Development and Access to New Technologies
Diversifying Financing Methods
To ensure effective implementation, the Investment Charter introduces unified governance, led by the Prime Minister, and territorialization of investments. This includes the creation of dedicated investment departments, one-stop investment centers, and a national commission for investment.
The Moroccan government is fully committed to the successful implementation of the Investment Charter. To this end, it has already signed three decrees in March 2023, complementing the principal support mechanism for investment projects.
Looking ahead, the Charter sets a specific timetable for the enactment of complementary legislative and regulatory texts required for its full implementation:
Within three months from December 12, 2022, texts related to the basic support system and the specific support system for strategic investment projects will be published.
Within six months, texts pertaining to the specific support system for promoting Moroccan companies internationally will be released.
Within twelve months, a specific accompanying system dedicated to small and medium-sized enterprises (SMEs) will be implemented.
Morocco’s new Investment Charter demonstrates the country’s commitment to fostering a conducive environment for investments, bolstering its economic growth, and positioning itself as a regional and international investment hub. By offering targeted incentives, streamlining procedures, and enhancing governance, Morocco is well poised to attract increased foreign investments and promote sustainable economic development. The successful implementation of the Investment Charter will be pivotal in shaping Morocco’s economic landscape in the years to come.
For further information,please contact Nesrine Roudane.
Published in August 2023
