INVESTMENT OPPORTUNITIES AND BUSINESS CLIMATE IN MOROCCO
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INVESTMENT OPPORTUNITIES AND BUSINESS CLIMATE IN MOROCCO 1
MOROCCO OVERVIEW
Capital Rabat 925 Billion MAD (2014)
GDP
US$ 116 Billion
Democratic and social Constitutional 27 768 MAD/ inhabitant (2014)
Institutional System GDP per capita
Monarchy US$ 3 270
Area 710 850 km²
Average growth 4% (over the last 5 years)
N° of inhabitants 33.8 million GDP Distribution Primary Sector 13%
Time Zone GMT (GMT+1 in summer) (2014) Secondary Sector 29%
Arabic and Amazigh (official) Tertiary Sector 58%
Languages
French, Spanish, English Inflation Rate 1.2% (2014)
2 Source: Haut Commissariat au Plan et Office des Changes
Contents
I Morocco: An Attractive Country For Investors
II Value Proposition
III Investment Incentives
IV Moroccan- African vision
3
A Stable Political Environment
A continuing drive for openness and democratisation
A monarchy established in the year 788 (12 centuries ago)
The Constitutional Council reviews the constitutionality of all laws
In July 2011, a referendum established a new Constitution, guaranteeing:
• Human rights • Improved moral standards in public life
• The legality of the State and its institutions • The plurality of the Moroccan identity
• Individual and collective liberty
Morocco, most stable country Morocco, most pacifist Morocco, most democratic
in North Africa in 2012 country in North Africa in country in Arab region in 2013
2013
According toThe Association According to Global Peace Index 2013 According to the Egyptian center
For International Affairs Ibn Khaldoun
4
MOROCCO, LOW RISK COUNTRY
Political Risk Security Risk
UNITED STATES LOW LOW
MOROCCO LOW LOW
QATAR LOW LOW
FRANCE LOW LOW Control Risks is an independent, global risk
consultancy specializing in helping organizations
SOUTH AFRICA MEDIUM MEDIUM manage political, integrity and security risks in
complex and hostile environments.
Working across five continents and with 36 offices
BRAZIL MEDIUM MEDIUM
worldwide, Control Risks provides a broad range of
services since 1975.
ROMANIA MEDIUM LOW
SPAIN MEDIUM LOW
JORDAN MEDIUM LOW
TUNISIA MEDIUM MEDIUM
TURKEY MEDIUM LOW
ALGERIA HIGH MEDIUM
5 EGYPT HIGH MEDIUM
Strong Macroeconomic Drivers
Average 2013 2014 African Country of the
4.8% #2 future 2013-2014
GDP Growth 4.8% 2.6% in Africa
2001-2013
#1 en 2011 - 2012
S&P affirms Morocco's rating
Inflation 1.8% 1.9% 1.1% and changes perspective from
negative to stable
2001-2013 Mai 2014
Fitch Ratings maintains
FDI Growth* 38% 25% 10% Investment Grade
Avril 2014
2011-2013
Christine Lagarde - FMI
Unemployment
rate 9.5% 9.9% January 2014
“… the economic reforms under way in
Morocco […] a model to follow in the
region. …"
6 * Flux Net des IDE entrant
Sources: Haut Commissariat au Plan, Office des Changes; Bank Al Maghrib; Banque Mondiale
Easiness of doing business
Free More than
No restrictions 100 protection
to capital for repatriation of
profits and foreign
non-residents Plus de 50
investment
capital for non- conventions
residents agreementsde
non double
and double
imposition+pr
taxation
otection de
1 2 3
l’investisseme
nt
7
3
A Business Environment Favorable to Investment
• 51 Double Tax Avoidance Agreements
• 62 Investment Protection Agreements
Investor
• Member of OECD Investment Committee
Protection • Member of International Centre for Settlement of Investment Disputes (ICSID)
• Member of MIGA (Multilateral Investment Guarantee Agency)
• The creation of the Business Environment National Committee (CNEA) to facilitate
procedures and access to information, and to carry out legal reforms
• The modernisation of business law
Legal Reforms • The strengthening of intellectual property protection
• A new law on arbitration and mediation
• New banking regulations
• Administrative simplification
An Incentive Tax • Reduction of tax burden
System • The creation of funds specifically for investment promotion
• Morocco adhered to the OECD Declaration on Propriety, Integrity and Transparency in
International the Conduct of International Business and Finance and to the OECD Declaration on Green
Instruments Growth
8
Ambitious Sectoral Strategies
INDUSTRY: Performant Ecosystem Strategy 2020 AGRICULTURE: GREEN MOROCCO PLAN 2020
Launched in 2014 • Industrial GDP to reach 23% of global GDP Launched in 2008
• To modernise the agricultural sector
• Creation of 500 000 jobs
• US$10 billion in additional GDP from
• Creation of Industrial Development Fund: agriculture
$2.5 Bn
• Allocation of 1 000 hectars of land for • US$15 billion in public and private investments
rent
TOURISM: 2020 VISION LOGISTICS PLAN 2016
Launched in 2010 • 20 million tourists in 2020 Launched in 2010 • To improve the country’s logistical
competitiveness
• 200 000 new beds • To reduce logistical costs from 20% to 15% of
GDP
• Tourism GDP: from US$6 billion in 2010 to • An integrated national network of 70 multi-
US$17 billion in 2020 flow logistical zones
ENERGY: MOROCCAN SOLAR PLAN 2020 IT: MAROC NUMERIC
Launched in 2009 (Solar) and in 2010 (Wind) Launched in 2009 • Generalized access to broadband
• Renewable energy >40% of national • Encourage IT use by SMEs
production by 2020
• Development of government e-services
• Capacity: 2 000 MW of solar power + 2 000
MW of wind power
MINING SECTOR 2025 LIQUIFIED NATURAL GAS
• Turnover *3 1.5 Bn USD • 4,6 MM USD d’investissement
• Gas terminal
• Investment X10 0.4 Bn USD
• 400 km gazoduc
• Jobs X2 30 000 • Combined cycle power plant
10
Modern Infrastructure
Airports Tramways
• 15 international airports • Rabat and Casablanca Ports:
• Casablanca is #1 Europe-Africa hub • €1 billion
• Morocco has two coastlines
(Mediterranean and Atlantic)
• More than 95% of trade in Morocco
go through the seaway.
• Morocco has 38 ports of which 18
are devoted to foreign trade.
Tangier Med port:
• Ideal port platform to serve
Europe and West African countries
Highways Railway Network
• 2015: it will connect all the big cities of • First high-speed train in Africa
Morocco (Tangier-Casablanca) in 2018 –
€1.8 billion
11Integrated Industrial Parks (P2Is)
« Plug & Play »
TANGER FREE ZONE
TANGER AUTOMOTIVE CITY
ATLANTIC FREE ZONE TETOUAN SHORE
TECHNOPOLIS TANGER
TETOUAN BERKANE OUJDA SHORE
KENITRA OUJDA CLEANTECH
RABAT FES
CASANEARSHORE MEKNES
CASABLANCA
NOUASSEUR FES SHORE
AEROSPACE CITY
MARRAKECH
AGADIR
AGROPOLIS
LAAYOUNE
MARRAKECH SHORE
DAKHLA
OFFSHORING P2I AERONAUTICS P2I RENEWABLE
ENERGY P2I
GENERAL P2I AUTOMOBILE P2I AGRICULTURAL
P2I
12Contents
I Morocco: An Attractive Country For Investors
II Value Proposition
III Investment Incentives
IV Moroccan- African vision
13A Strategic Geographical Location
EUROPE
AMERICAS 9 miles MIDDLE EAST
TANGER MED
AFRICA
MOROCCO
14At The Crossroads Of The Continents
7h 5h
3h 3.5h
10d
NEW YORK 2d 3d
PARIS 3h FRANKFURT
3h
1h
2d
1d ROME
MADRID
22h
4h 30d
5d 4h BEIJING
ACCRA 4d
3h CAIRO
4d
DAKAR
10h
25d
SAO PAULO
Flight duration
Sea/land route
15 Sources: Royal Air Maroc; COMANAVUnique Set Of Free Trade Agreements
Agreement under negotiations
with Canada
Association Agreement with European Union
(1996)
Located just 14 km
from Europe
Agreement with Turkey (2003)
Agreement with United States of
America (2005)
Agadir Agreement (2004)
United Arab Emirates Agreement
(2003)
Arab League Agreement (1998)
Agreement under negotiations with the
Economic Community of West African
States (ECOWAS & CEMAC)
Since 2008, Morocco enjoys an Advanced Status with the EU.
16Tanger Med Port - Logistics Hub of international stature
Connections to 120 ports in 56 countries, with 40 services
Index of maritime
connectivity in Morocco
0
16
20
40
60
80 84
100
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Current capacity of 3 million containers (8millions in 2016)
2 container terminals
3.1 million TEUs * in 2014 (+20%)
Ambition: To be included in the World Top 15
17Morocco: an unparalleled connection between Europe, the
Middle East, and Africa
Number of international Direct connections to 32 Direct connections to 24 cities
passengers: European cities in Africa and the Middle East
Steadily growing
In millions
15.1 15.1
13.5
11.5 12
10.1
8.5
2006 2007 2008 2009 2010 2011 2012
Mohammed V Airport in Casablanca: best airport in North Africa in 2012
According to the International Association of Airports
18 Sources: Office National des Aéroports & Royal Air MarocCOMPETITIVE COSTS
Competitive cost of labor1 Lower exports costs2 Attractive tax rates3
Production worker - Annual total cash ($) US$ per container % of commercial profits
Spain 32,090 Mexico 1,499 Algeria 72.7%
Turkey 12,498 Spain 1,310 China 64.6%
Mexico 6,279 Algeria 1,270 Tunisia 62.4%
Tunisia 5,966 Turkey 990 Spain 58.2%
Algeria 5,793 China 823 Mexico 51.8%
China 5,763 Tunisia 805 Morocco 49.3%
Morocco 5,538 Morocco 595 Turkey 40.1%
1. Including salary, non-variable remuneration and incentives 2. Associated costs with all procedures required to export goods 3. Taxes and
19 mandatory contributions paid by the company during the second year of activity. Source: World Bank 2014, Mercer 2013, BCG analysisStrong people advantage
A young and well educated workforce Government support for training
64% of Moroccans are aged under 34 years Dedicated entity for professional training
175 000 university students (OFPPT)
25 000 engineering graduates per year for A network of 337 schools with ~400 000
2015 and 25 000 for 2020 trainees
Training in 6 industries:
• Industrial, Tertiary, Construction, ICT,
Tourism, Transport & Logistics
OFPPT center IFMIA Tangier
~10 millions of French speakers
~6 millions of Spanish speakers
English: ranked 45th WW and 2nd in North Government partnering with investors for
Africa1 training
Strong cultural and linguistic affinity with Creation of an Automotive Training Institute
Europe (IFMIA) for the workers of the Renault plant
Morocco financed 100% of the training
facility
1. World index of English level, by « Education First » organization - Source: Arab Social Media Report, Dubai School of Government; Haut Commissariat au Plan,
20 Ministère de l’Enseignement Supérieur, Agence Nationale de Réglementation des Télécommunications, press search, BCG analysisAccelerated Industrial Plan 2014-2020 : building à momentum for
industrialization
Achieve the acceleration of our …Through a development focus on
industrialization… ecosystems
• Corner stone of the IAP
Employment 500 000 Ecosystems and
sectorial support
• Tool to integrate and modernize
industrial sectors
Industrial job creations
• Industrial Fund: 20 Bn Dhs
Value creation + 9pts Support
measures
•
•
•
Land: 1000 ha
Dedicated financial products
Coordinated training plans
Increase of the Industry’s share • Offset and imports substitution
in the GDP to 23%
• Transverse objectives of the IAP
Trade Balance 0
Rebalancing of the external accounts
Trade balance
and inclusive
development
•
•
•
Rebalancing of the trade balance
Informal inclusion
Vertical integration SME/LE
through exports promotion and
substitution to imports
2
1MOROCCO: HUB FOR EXPORTS
CASE OF AUTOMOTIVE: X30 IN 10 YEARS
Automotive exports from Morocco Top 10 destinations of Automotive
(base 100 = 2004) exports from Morocco (2009-2013)
2,999
BELGIUM GERMANY POLAND
4% 6% 2%
1,788
FRANCE
35% ROMANIA
2%
769 SPAIN
443
212 291 367 405 13% TURKEY
100 137
10%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
EGYPT
10%
EQ. GUINEA
• Cabling for automotive
3%
• 8 production units; 1st in 2001
• 16 000 jobs
• 2nd largest employer in Morocco
22 Source: TrademapRENAULT TANGIERS
• TANGIER FACTORY : the largest
automotive plant in Africa (2013)
• 6 000 employees
• Production Capacity : 340 000 vehicles per year
• Production : 250 000 vehicles (2015 est. )
• 800 vehicles/day
• 300 hectares, o/w 220 hectares of covered buildings
• Bodywork-assembly, power trains, spare parts
• Vehicles produced: Dacia Lodgy, Dacia Dokker et Dacia
The 400 000th vehicle produced by Renault Tanger, a Dacia Lodgy grand taxi. Dokker Van on the 1st line and Dacia Sandero + Dacia
Sandero Stepway on the 2nd line launched in September
2013 (30 vehicles/hour)
• 1.1 billion € : 700M€ for 1st line and 400M€ for the
2nd line lunched in 2013.
Number of produced vehicles (000s)
• Environment :
250.0
174.2 – - 98% reduction of CO2 emission 135 000 tonnes of non
48.9 100.9
Production prize in the emitted CO2 per year;
5th « Sustainable Energy – 100% of the current power needs are generated by wind wills and
2012* 2013 2014 2015** Europe Awards » water turbines;
organised by EU
*Inauguration Feb. 20th 2012 – Water withdrawals for industrial processes are 70% lower*
**Forecast * For a conventional plant of equivalent size.
23PSA Peugeot Citroën : Kenitra site
• €557 MILLION to build a plant in Kenitra
province
• To be completed by 2019
• 4.500 direct jobs and 20,000 indirect
• Production Capacity : 200,000 cars and 200,000
engines per year
• B- and C-segment vehicles
• PSA Peugeot Citroën creates a new OPENLAB in
Morocco dedicated to the "car of the future“:
• The new OpenLab, dubbed "Sustainable Mobility
for Africa", will engage in a four-year research
programme to explore sustainable mobility systems
with three core focuses: the electric vehicle of the
future, renewable energy and the logistics of the
future;
“The country is provided by high standard infrastructures and allow us access a high qualified and educated
employees. The kingdom of Morocco has been chosen for the settlement of our company because of the win-win project elaborated
by our teams. The agreement signed with the Kingdom of Morocco will allow us to increase our production capacity in the heart of
the region in order to achieve our goal of selling one million vehicles by 2025.“
Carlos Tavares, Chairman of the Managing Board
24BOMBARDIER: MIDPARC
• 55 000 m² total industrial area owned by
BOMBARDIER in MIDPARC exportation free
zone (opened in 2013)
• 850 employees by the year 2020
• Production : mechanical components and
sub-assemblies (leading edges …) for Canadair
Regional Jet (CRJ) wings, a civilian airliner
conceived by the Canadian airframe
manufacturer (carried out so far in Belfast).
• 37.5 millions € to be invested in sourcing by
BOMBARDIER site in Nouaceur Free zone the year 2024 for an expected global quantity
is the le 3rd Group's of 500.000 pieces
largest industrial site , following the site • Nearly de 8.4 millions € will be set aside for
of Queretaro in Mexico and Belfast’s site sourcing from Morocco
in Northern Ireland.
• 13.1 millions € : allocated budget for the
construction of the covered area of 14.000 m²
o/w 9.500 m², and 18 m height, platform
dedicated to production
25STELIA AEROSPACE AU MAROC
STELIA Aerospace, 100% subsidiary of
AIRBUS group (fusion : Aerolia & Sogerma,
jan.2015), 1.8 milliard € and6,100
employees worldwide (800 in Morocco )
Site launch: 2nd plant in Midparc Nouaceur,
15.000 m2 (Dec. 2015), delivery scheduled
for June with operational force of 150-200
emp.
~40 millions € investment
400 - 500 employees (futur)
Activity : specialized in assembling complex
aerospace sub assemblies (tq. Fuselage
elements of A320 et A330, size of 3-4 m)
26 *Present in Morocco since 1951 through the subisidiary Maroc AviationINFRASTRUCTURE 2016: 3.3 Bn US$ Investment • Roads and Highways: 1.1 Bn US$ • Train: 0.4 Bn US$ • Ports: 0.77 Bn US$ • Airports:0.1 Bn US$ 27
RENEWABLE ENERGY
Energy source in %
WIND WIND
5% COAL 14% COAL
HYDRO 28% SOLAIRE 27%
27% 14%
GAS HYDRO
FUEL FUEL
13% 14% GAS
27% 10%
21%
2010 2020
Objective 2020: reach 42% of the installed power
from reneweable energy
28NOOR Thermosolar Power Plant Ouarzazate
• NOOR I Ouarzazate : the world’s largest parabolic
trough CSP power plant, 160MW and 3 hours of
thermal storage
• 470 000 tons/year (of operation) of CO2 reduction
• Up to 1 000 workers (during construction) and 60
(operation)
• US$ Cents 18.9 / kWh, lowest contracted tariff ever
ascribed to date for Concentrated Solar Power
Technology
• 2nd phase of NOOR in Ouarzazate, the largest
solar power complex in the world :
• Technology provided by SENER (also equity investor NOOR II and III projects : 200MW and 150MW
in NOOR II) solar power plants based on CSP (7.2 hours and 8
hours molten salt storage), with a total value of $
• 25 years term PPAs signed between ACWA Power 2.0 Billion (funded on 80/20 debt to equity basis)
and Masen
Saving approximately 1,108,600 tons of CO2
• Masen holder of 25% equity in NOOR II and III
Commercial operation exp. during Q3/Q4 2017
• SENER and SEPCO III constructors of both projects
29 CSP*: Concentrated Solar Power Technology; PPAs** Power Purchase Agreements.Contents
I Morocco: An Attractive Country For Investors
II Value Proposition
III Investment Incentives
IV Moroccan- African vision
30An Attractive Incentive Package
Conventional Regime
Industrial and
Offshoring Sector
Investment Development Hassan II Fund
Incentives
Fund
Eligibility Conditions: Eligibility Conditions: Corporate tax Full exoneration for
• Investment ≥ 100 M DH • Total investment ≥ 1O M DH first 5 years and 17,5% starting
• Jobs created ≥ 250 • Investment in goods and from the 6th year
or • Transfert of technoloy equipment ≥ 5 M DH
Income Tax : 20% cap in
• Implementation in a priority area • Sectors: Automobile,
Nearshoring Business Parks
• Protection of environment aeronautics, nanotechnology,
microelectronics, and
Land Assistance: A contribution up to biotechnology. Training Subsidies up to US$7,800
20% of acquisition costs (over 3 years)
Contributions are limited to a
External Infrastructures: assistance maximum of 15% of the total
of up to 5% of total amount of investment and 30 million DH
investment programme covering land, building and
equipment goods.
Training: A contribution of up to 20%
of training costs.
31An Attractive Incentive Package
General Tax Casablanca Finance
Free zone regime
Code City
Eligibility Conditions Eligibility Conditions Eligibility Conditions
• Investment ≥ 100 M DH • 85% of sales to be • Activities with non-resident
achieved abroad businesses
VAT exemption for the • Compliance with financial
importation of equipment goods, Unlimited exemption from legislations and regulations,
materials, and tools for the 36 customs duties foreign trade and foreign
months following the start of the Simplified customs procedures exchange
activity. Corporate tax = 0% for 5 years and
This exemption is also granted to 8.75% for 20 years For service companies CFC status:
parts, spare parts and accessories Income tax = 0% for 5 years, then Total exemption from corporate
imported at the same time as the 80% tax reduction for 20 years tax for companies during the first
above equipment Business tax exemption for 15 5 years of operation and 8.75%
years thereafter.
Value Tax Added : unlimited For regional and international office:
Exemption from import of exemption for goods delivered Taxed at a reduced rate of 10%
equipment goods, materials, and and services (corporate tax)
tools for the 36 months after the Registration fees: exemption acts Specific taxation rate of 20% for
signing of the Investment of incorporation and capital wage income (income tax)
Agreement increase Exemption acts of incorporation
and capital increase
32Contents
I Morocco: An Attractive Country For Investors
II Value Proposition
III Morocco : priority to investor needs
IV Moroccan- African vision
33African economic potentialities
• By 2050, Africa's economy would be
close to 10 times bigger than it is today.
• Six of the world’s ten fastest-growing
economies in the world over the last
decade were in Africa. It is expected to
be seven by 2020.
• The economy in the Sahel region is
growing by more than 5% annually.
• There is a rise of a consumer society,
which increases demand, boosts local
production and amplifies middle class.
In 2014, 106 million Africans should have an
annual income of over $ 5,000*
The true size of Africa embraces China, the US, India, Eastern Europe and the
most important Western European countries
34 * BloombergMoroccan companies, large footstep in Africa
Construction
ICT & Media Mining Banking Insurance Telecom Pharmaceutical Air transport
and Real Estate
Alegria Tunisia
Libya
Mali
Mauritania Niger
Senegal
Burkina Djibouti
Faso
Guinea Nigeria
Benin
Ivory Coast Central African Ethiopia
Cameroun Republic
Liberia Ghana
RDC
Equatorial Guinea Uganda
Kenya
Gabon
Congo Burundi
Tanzania
Angola
Madagascar
35THANK YOU www.invest.gov.ma
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