Investors who wish to establish a company in Morocco can find it frustrating when they do not know the formalities.
Why establish your company in Morocco
In Morocco, the practice of an industrial, commercial, artisanal activity or any service providing activity, can be carried out:
- Either individually as a natural person or under the auto-entrepreneur regime with certain limitations;
- Or by the establishment of a company. As such, Morocco is ranked third in Africa according to the World Bank’s Doing Business 2020 report. This is mainly due to the administrative procedures for establishing a company.
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This article shows you the steps to follow to establish a company in Morocco.
Encouraged by various reforms, the establishment of a company in Morocco has become relatively simple.
However, it requires a personalized support throughout the process, in order to avoid any disappointment. In this sense, the chartered accountant is the preferred partner to help in the proper preparation of the future establishment and its particularities. It is also strongly recommended to call upon local chartered accountants. For example, for a domiciliation in Casablanca, a chartered accountant in Casablanca would be able to accompany his clients as closely as possible and answer their questions in a reactive manner. The same goes for a company located in Marrakech which, in order to benefit from a better support, would have to contract the services of a chartered accountant based in Marrakech.
Before launching any procedure to establish a company in Morocco, the investor wishing to carry on an activity in Morocco, must set beforehand the following elements:
Establish a company in Morocco – choosing a legal form
To establish of a company in Morocco, several legal forms are possible:
Partnership (Société de personnes)
Such companies are said to be intuitu personae. In other words, the partner personality is essential. In this legal form, the partners are personally and jointly liable for the debts of the company, out of their personal property. Partnerships include general partnerships (sociétés en nom collectif), limited partnerships (sociétés en commandite simple) and joint ventures (sociétés en participations);
In contrast to partnerships, capital companies emphasize on the importance of the capital contribution of the founding partners. The liability of the partners is limited to their contributions. Capital companies are namely, limited liability companies (L.L.C) (Société à Responsabilité Limitée), Public Limited Companies (P.L.C.) (Société Anonyme) and Simplified Public Limited Companies (S.P.L.C) (Société Anonyme Simplifiée).
In the following, we will limit ourselves to highlighting the specificities of L.L.C and P.L.C forms, which represent the most common legal forms in Morocco.
Limited Liability Company (L.L.C – SARL)
The LLC is the most popular legal form for in Morocco. In 2019, the LLC form accounted for 93.8% of newly established companies according to the Establish company in Morocco barometer of the Moroccan Office of Industrial and Commercial Property (OMPIC),
Generally, to establish an LLC in Morocco, at least 2 founding partners are required. However, a single partner may establish an LLC. In this case, it is called a one-person LLC. It is adapted to small and medium enterprises and has the following main characteristics:
- Partners can freely determine the amount of share capital. Moroccan law does not require any minimum amount;
- Shares are not freely transferable to third parties outside the company. A co-partner can object to the transfer of shares to a third party who is not a partner at the time of the transfer;
- Manager(s) of the LLC are not required to be Moroccan residents or to hold shares in the company;
- The appointment of an External Auditor is required only when the annual turnover exceeds the threshold of MAD 50 million tax excluded. The appointed Auditor must be registered with the Moroccan Order of Chartered Accountants;
Public Limited Company (P.L.C – S.A)
This is the second most used legal form in Morocco. It is mandatory for institutional investors (banks, insurance companies…) and companies whose shares are listed on the Casablanca Stock Exchange. It is also used by large national and international companies.
The main characteristics of the P.L.C are:
- A minimum of 5 shareholders;
- The minimum share capital must be set at MAD 300,000. If the company is listed on the Casablanca Stock Exchange, it cannot be less than MAD 3,000,000;
- Free transferability of shares;
- Managing the LLC is ensured either by a Board of Directors (composed of at least three members) or by an Executive Board (5 members at most).
- Obligation of appointing an External Auditor.
The company’s sector of activity:
Investors must ensure that the company’s activity is not regulated (doctor, accountant, architect, etc.). Where applicable, they must check whether they meet the necessary conditions (diploma, personal qualification, etc.) to obtain all necessary approvals and authorizations from the regulatory authorities.
Choosing a corporate name
Investors must check that the trade name they wish to give the company is not already reserved and can, as such, be used for registration in the Commercial Register. Thus, an application to obtain a trade name must be addressed to the Moroccan Office of Industrial and Commercial Property (OMPIC).
If the requested trade name is available, OMPIC will issue a certificate, called “negative certificate”. This certificate is mandatory for registration in the commercial register.
Once the negative certificate has been obtained, the investor is able to start the establishment of his company. To establish a company several step must be respected:
Designation of the registered office of the company to be established (Headquarter)
Every company in Morocco must have a registered office. Two ways are possible to designate the registered office of the company:
– First, by concluding of a commercial lease contract;
– Otherwise, by obtaining a certificate of domiciliation issued by a domiciliation company. A domiciliation in Casablanca generally costs between MAD 250 and 500 per month. Same for a domiciliation in Marrakech.
Drafting of the articles of association
The most crucial step in the establishment procedure is the drafting of the company’s contract, called articles of association. These include a set of contractual and legal provisions that define, amongst other things:
- First, the rules of management and administration of the company to be established;
- Second, the rules of the relationship between the partners;
- And also, the rules of relationship with respect to third parties;
In order to comply with the legal provisions in effect, the articles of association must contain certain mandatory information, under penalty of the company being declared null and void. Said information include, amongst others, the name of the company, the legal form chosen, the identity of the partners, the amount of the share capital, each partner’s contribution…
It is strongly recommended to use the services of a professional for the drafting of the articles of association (chartered accountant, notary, business lawyer…). The latter will be able to provide you with his expertise to meet the specificities of the company to be established and its operating mode.
Thereafter, the partners are required to sign the articles of association and to register them with the Registry and Stamp Office of the Regional Tax Department where the company’s head office is located. On average, there is a 96-hour delay between the filing of the registration application and its withdrawal. On the other hand, thanks to the e-registration platform set up by the Moroccan tax administration (Direction Générale des Impôts), which is accessible to chartered accountants, registration is carried out within a maximum of 24 hours. This is considerably time saving.
Funds blocking to establish a company in Morocco
This step is mandatory for:
- LLCs whose share capital is higher than MAD 100,000;
- PLCs regardless of their share capital.
The investor must deposit in this blocked bank account at least 1/4 of the share capital. The bank then delivers a certificate of blocking to be attached to the incorporation file.
Submission of the company’s incorporation file
There are two options available for investors:
The ‘normal’ procedure
With this method, the creation of a company is carried out through the following steps in a consecutive manner:
- Registration of the company with the tax authorities: this is done through a declaration of existence which must be sent to the tax authorities within a 30 days deadline following the date of establishment of the company. This declaration must be accompanied by the articles of association and proof of the address of the registered office (certificate of domiciliation or a lease agreement). At the end of this step, the administration delivers a certificate of registration for the Professional Tax to the creator;
- Registration of the company with the commercial register: In addition to the certificate of registration with the Professional Tax, the registration file must include a declaration of registration and must be filed with the commercial court of the city where the company’s registered office is located. The commercial court issues an extract from the commercial register called Model J, certifying the company’s establishment.
- Affiliation of the company to the National Social Security Fund (Caisse Nationale de Sécurité Sociale) (CNSS): This affiliation is made through an application within a deadline of one month from hiring the first employee ;
The creation via the Regional Investment Centers:
Contrary to the normal procedure detailed above, the Regional Investment Centers (CRI) act as a single-window service and group together the registration services with the tax authorities, the trade register and the CNSS. Generally, the company is established within a maximum period of 10 days.
The Commercial Court issues the extract from the Commercial Register called Model J. The issuance occurs within one week after the company’s incorporation.
Legal advertisements after the end of the procedure for the creation of a company
After registration at the Trade Register, the company proceeds to two mandatory legal publicity formalities, namely :
- Firstly, publication in the official bulletin ;
- Secondly, the publication in the legal gazette.
At the end of this stage, the company is validly established. Thus, it will only have to open a bank account to launch its activity.
Once established, the company is bound by several obligations
- Firstly, accounting obligations :
- Keep an accounting of its operations in accordance with the legal provisions in effect;
- Proceed to the annual deposit at the clerk’s office of the commercial court;
- Secondly, tax obligations:
- Prepare tax returns during the year. These declarations include Corporate Income Tax (CIT), Value Added Tax (VAT) and Income Tax (IR).
- Transmit to the tax authorities its tax balance sheet at the end of the year. Banks often ask for it for the granting of credit lines;
- Then, social obligations:
- Fill out several social declarations during the year related to the remuneration granted to the company’s employees.
Using the services of a chartered accountant is the best way to comply with these obligations. The latter is the most appropriate professional:
- Because of his multidisciplinary training in finance, tax law and labor law;
- The monopoly in the field of statutory auditing;
- His mastery of the economic environment.
Our firm, a member of the Order of Chartered Accountants in Morocco, strong of its experience, puts at your disposal chartered accountants in Casablanca to establish your company in Morocco.
Are you looking for a chartered accountant in Marrakech? Our office in Marrakech can assist you in all matters related to your accounting and tax affairs (company creation, domiciliation in Marrakech, tax studies, …).
Where to establish a company in Morocco?
The economic capital of the Kingdom, the city of Casablanca is one of the cities with the highest number of company creations in Morocco. Marrakech comes in second place in terms of number of creations. Most of the company creations in Marrakech are in the tourism sector.