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Employing in Morocco

At a glance

Employment in Morocco

Morocco has a relatively modern labour system, with the workforce roughly divided into one third agriculture, one third mining, manufacturing and construction, and the remaining in the trade, finance and service sectors. A large informal economy also exists, made up of street vendors, domestic workers and other underemployed and poorly paid individuals.

While unionisation does not make up a significant proportion of workers, several trade unions do exist in the country; the largest being l’Union Marocaine du Travail with 700,000 members.

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Payroll & Tax in Morocco

Foreign companies operating in Morocco may find it challenging to deal with the complexities of the country’s tax system. The primary concerns for a foreign company that needs to comply with tax laws in Morocco are: Individual income tax (IIT) for employees in Morocco, social security costs, VAT, withholding tax, business tax and permanent establishment concerns.

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Immigration / Work Permits in Morocco

As in most other countries, the hiring of foreign nationals in Morocco is subject to the availability of qualified local candidates to perform the role. Foreigners wishing to work in Morocco are required to obtain a work permit and registration card, which indicates the nature of the work that will be performed in the country.

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Incorporation

There are three types of business forms available to foreign companies in Morocco. Each of these business forms has distinct advantages and disadvantages, as well as differing scope of business activities, registration requirements and minimum capital requirements. In most cases it will depend on the degree of commitment a company has to Morocco and the planned business activity.

When setting up a company in Morocco, you have the following options:-

  • Corporation
  • Branch Office
  • Liaison Office

This article provides a general guideline for foreign businesses on entering Morocco for business purposes. In particular, it looks at common pathways to establishing a business presence in Morocco, generally through a corporation, branch office or liaison office. In addition, various economic, tax and regulatory factors are provided throughout as a source of useful information to assist those who will enter the Moroccan economy. The guide also looks at some immigration requirements such as obtaining appropriate visa status.

Data is based on the time of writing, November 2015 or closest available dates.

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GEO Solutions or DIY Employment in Morocco?

GEO Solutions or DIY Employment

Companies entering Morocco must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities. A GEO or Morocco Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have a Moroccan entity established that can run payroll.

A DIY approach will typically take 6-9 months until there is a properly incorporated WFOE ready to run payroll and cost up to 6 figures if registered capital is required. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally Shield GEO is responsible for all compliance issues related to the employment.

Using Shield GEO Employer of Record Services in Morocco

Payroll Morocco
Management Fee for Employer of Record Services / Monthly Payroll Costs

Please contact us for a quote

Notes

Shield GEO pays the employee on a monthly basis, typically on the last working day of the month although we can adapt to your preferred schedule. Income tax and social security (where applicable) are deducted at source and paid to the local tax authorities.

 
Grossed income Tax Rate (%)
0 - MAD 30,000 0
MAD 30,001 - 50,000 10
MAD 50,001 - 60,000 20
MAD 60,001 - 80,000 30
MAD 80,001 - 180,000 34
Above MAD 180,001 38
Tax Returns Supplied

Yes

Corporate Tax Requirements

The fiscal year begins on 1 January and ends on 31 December of the same year.

Companies must file a corporate income tax return together with a copy of the financial statements with the inspector of direct taxes for the district in which their company headquarters are located within 3 months after the end of the fiscal year.

Companies must make advance payments of corporate income tax. For companies with a 31 December year-end, the payments must be made by 31 March, 30 June, 30 September and 31 December. Each payment must be equal to 25% of the previous year’s tax. If the minimum tax does not exceed MAD3,000, it is fully payable in one instalment. Payment of the minimum tax exceeding this amount is made in accordance with the rules applicable to the corporate income tax.

The corporate tax amount cannot be lower than a minimum contribution (MC), MAD 1500 and must be made in a single payment, before the end of the third month following the start of the current financial year

Employers Social Security and statutory contributions

Employers are required to make the following contributions:

1. Family benefits: 6.4%

2. Death and other daily compensation for illness, pregnancy etc: 8.6% (capped at MAD 6,000)

3. Professional training tax: 1.6% (uncapped)

4. Mandatory health insurance: 3.5% (uncapped)

For more details, please refer to the section on Employment.

Employees Social Security and statutory contributions

Employees are required to make the following contributions:

1. Death and other daily compensation for illness, pregnancy etc: 4.29% (capped at MAD 6,000)

2. Mandatory health insurance: 2.0% (uncapped)

For more details, please refer to the section on Employment.

Corporate Income Tax Rate

The current corporate income tax rate (impôt sur les sociétés) is 30%. However, a special rate of 37% applies to insurance and banking and financial institutions.

Preferential rates apply to companies with a taxable income of MAD 300,000.

Payroll Tax

No

Sales Tax

VAT is imposed on the supply of taxable goods and services in Morocco. Taxable persons charge VAT on their taxable supplies (output tax) and are charged with VAT on goods  which they receive (input tax).

The current standard rate of VAT imposed on taxable goods and services is 20%, with reduced rates of 14%, 10% and 7%.

Withholding Tax

Morocco imposes withholding tax (WHT) on certain classes of income earned by non-residents:-

  • Dividends: 15%
  • Royalties, patents, know-how, technical assistance fees and remuneration for most services: 10%
  • Interest: 10%/20%/30%
  • Rental on equipment: 10%
  • Indemnity for non-permanent employees: 30%
 A reduced rate may be available under an applicable Double Tax Treaty.
Other Tax
  • Professional tax, on gross rental value of the business premises: 10-30%
  • Local services tax; annual tax on the rental value for professional tax purposes: 6.5-10.5%
  • Registration duties, on transfers of real property or businesses: 1-6%
  • Contribution to support social cohesion (la contribution pour l’appui à la cohésion sociale); payable by companies, public institutions, associations and other similar organizations, funds liable to corporation tax, coordination centers and other legal entities with a net income exceeding MAD 15million: 0.5 – 2%
Work Permits
Business Visas
Others
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