Morocco's Business andInvestment Environment
Tokyo1 December 2013

Contents
I

Morocco: An attractive country for investors
 Political stability favourable to investment
 Strong macroeconomic drivers
 Ambitious sectorial strategies
 World-class infrastructureII

An attractive value proposition

III Morocco: Priority to investors
2

Strong macroeconomic fundamentals
GDP Growth(%)

Sustained
Sustained GDPGDP
growth
growth
1998-2000

2002-2009

2010

2011

Successfully
meeting the major
challenges, 2011.

Inflation (%)

Controlled
Controlledinflation
inflation
Mean 19901995

Mean 2002009

2010

Unemployment Rate (%)

2011
UrbanNational

Morocco maintains
A4 rating - 2011

Declining
Declining
unemployment
unemployment
1999

2010

2011

FDI ( in B DH)

29,5Rising
Rising FDI
FDI
95-99

00-04

05-09

Affirms
Morocco's
Investment rating2011

2010-2011

Public Debt (% of GDP)

Control
Control ofof Public
Public
Debt
Debt

52

2000

32010

2011

#1In Africa
2011-2012 African
Country of the future

Sources: Haut Commissariat au Plan & Ministère de l’Economie et des Finances

Ambitious sectorial strategies
INDUSTRY: EMERGENCE PACT
Launched in 2009
Objectives:• 1.6 % in additional GDP growth• 220 000 jobs created• Key sectors: automobile; aeronautics; electronics; IT;
food industry; textile

ICT: DIGITAL MOROCCO 2013
Launched in 2008
Objectives:• General access to high-speed internet• E-government• To encourage the use of IT in SMEs
 The greatest increase in the number of internet users
in Northern Africa in 2011
4

Ambitious sectorial strategies
RENEWABLE ENERGY
Launched in 2009 (Solar) and 2010 (Wind) with a budget of
US$ 15 billion
Objectives:• Renewable energy >40% of national production by2020• Capacity: 2 000 MW of solar power + 2 000 MW ofwind powerFINANCE: CASABLANCA FINANCE CITY
Launched 2010
Objectives:• To make of Casablanca a regional hub for theMaghreb and Western Africa.
• The creation of employment opportunities.
5

Ambitious sectorial strategies
LOGISTICS
Launched in 2010
Objectives:• To improve the country’s logisticalcompetitiveness• To reduce logistical costs from 20% to 15% of GDP• An integrated national network of 70 multi-flow
logistical zones

TOURISM: VISION 2020

Launched in 2010
Objectives:• 20 million tourists in 2020
• 200 000 new beds
• Tourism GDP: from US$6 billion in 2010 to US$14billion in 20206

Ambitious sectorial strategies
AGRICULTURE: GREEN MOROCCO PLAN
Launched in 2008
Objectives:• To modernise the agricultural sector• US$10 billion in additional GDP from agriculture• US$15 billion in public and private investments

FISHING: HALIEUTIS
Launched in 2008
Objectives:• US$1.5 billion in additional GDP• The creation of 75 000 jobs by 20207

Ambitious sectorial strategies
RETAIL: RAWAJ 2020
Launched in 2008
Objectives:• GDP from trade of DH98 billion, representing
12.5% of the country’s GDP.
• The creation of over 200 000 jobs.

HOUSING
Launched in 2009
Objectives:• To reduce the shortage of units• To build 100 000 units per year
• To expand social housing
8

Important infrastructure improvements

Airports• 15 international airports• Casablanca is #1 Europe-Africa hubTramways• Rabat and Casablanca• €1 billion

Tanger Med: world-class infrastructure in a
strategic geographical location.
• Annual capacity of 3 million containers.
• Capacity of 8.5 million containers in 2014.
• Objective: reach World Top-15.
• Integrated industrial, logistics, andcommercial zones neighbouring the port.
Ideal maritime platform to serve Europe andWestern Africa.

Highways (number of Km)• 2000 - 2010: from 150 to 1 000 km (≈ x 7)
• 2010 -2015: from 1 000 to 1 800 km (≈ x 2)

9Railway Network• First high-speed train in Africa(Tangier-Casablanca) in 2015 –€1.8 billion

22 Integrated Industrial Parks (P2Is)
TANGER FREE ZONETETOUAN SHORETANGER AUTOMOTIVE CITYATLANTIC FREE ZONETANGERTECHNOPOLISTETOUANKENITRARABATCASANEARSHORECASABLANCAFES
MEKNES

BERKANEOUJDA SHOREOUJDA

CLEANTECHFES SHORE

NOUASSEURAEROSPACE CITYMARRAKECHAGROPOLISAGADIR

Emerging Real Estate
LAAYOUNEMARRAKECH SHOREDAKHLAOFFSHORING P2I
GENERAL P2I

10AERONAUTICS P2I
AUTOMOBILE P2I

RENEWABLE
ENERGY P2I
AGRICULTURAL
P2I

Main mission: to ensure the movement ofassets (through land searching andlocalizing, administrative and legalorganizing, turnkey delivery, and sitemanagement).
 Investments between DH 100 and 300
million encompassing between 5 000 m²
and 20 000 m²
 60% of funds allocated to P2Is and 40% tonon-P2I areas.

I

Morocco: An attractive country for investorsIIAn attractive value proposition
 A strategically ideal geographical location
 A competitive destination
 A unique network of Free-Trade Agreements
 A young and qualified workforce

III Morocco: Priority to investors
11

Morocco: a strategic geographical location
Europe14 km

Tangier
MedPortTanger
MedMorocco

12Tanger Med Port: Connections to 130 ports in 65 countries
A total traffic of 27 million tonnes in 2011, a rise of 17% from 2010
Ranking of Moroccan
shipping routes

13Competitive costs

Exportation costs*

Competitive salaries(average)

US$ per container

Tax Burden(% of profit)

US$ per month

+ 47%

14

Source: World Bank 2012

Access to custom fee exemptions
Agreement under negotiations
with Canada
Association Agreement with European Union(1996)

LocatedLocated just
just 1414 kmkmfromEuropefrom Europe

Agreement with Turkey (2003)

Agreement with United Statesof America (2005)

Agadir Agreement (2004)
United Arab Emirates Agreement (2003)
Arab League Agreement (1998)
Agreement under negotiations with theEconomic Community of West African
States (ECOWAS & CEMAC)

15

A quality workforce
A young and educated population• 64% of Moroccans are aged under 34 years• 6 million young people (between 18 and 35 years old)
• An active population of 12 million• 175 000 university students• 10 000 engineering graduates per year
• Over 100 public universities and schools• Over 200 private universities

A youth open to the world• 13 million internet users• 4,1 million Facebook users (39th in the world), including 80%
under 30 years old• Steady growth of English, Spanish, and German learning• Strong cultural and linguistic affinity with Europe16

IMorocco: an attractive country for investors

IIAn attractive value proposition

III Morocco: priority to investorsAn attractive incentive package
Free zones
An environment favourable to conducting business MIDA, your representative17

An attractive incentive package
Investment Promotion
Funds(IPFs)
 Eligibility Conditions:• Investment ≥ DH200 million• Jobs created ≥ 250
 Land Assistance: A contribution
up to 20% of acquisition costs
 External Infrastructures:assistance of up to 5% of total
amount of investment
programme Training: A contribution of up to20% of training costs.

18Hassan II Fund

Energy Funds

 Eligibility Conditions:• Total investment ≥ DH5million• Investment in goods andequipment ≥ DH2.5 million• Sectors: Automobile,aeronautics, nanotechnology,microelectronics, andbiotechnology.
 Land Assistance: 30% of costs ofland acquisition anddevelopment.
 Equipment: 10% of costs of new
equipment (excluding taxes andimport duties).

 Eligibility Conditions:• Investment in equipment
goods ≥ DH2.5 million• Signature of aninvestment contract with
the State Budget of DH52 Billion
 Objectives:• To finance new energy
facilities, especially in the fieldof renewable energy.
• To offer subsidies to projectleaders.

An attractive incentive package
Moroccan Fundfor Tourism
Development (FMDT) SizeCurrently DH1.5 billion,
increasing to DH15 billion overthe next 10 years.
• Objectives- To support the carrying out of“Vision 2020”- To produce a significant impact
on the Moroccan economy andto ensure financial stability forinvestors.
 Eligibility Conditions :• The projects in question will
operate in the fields of hotel
infrastructure, recreation,entertainment, business tourism,
and touristic cultural
infrastructure.

19General TaxCode Eligibility Conditions• Investment ≥ 200
millions DH VAT exemption for theimportation of equipment
goods, materials, and tools forthe 36 months following thestart of the activity.

Casablanca FinanceCity
 Eligibility Conditions• Activities with nonresident businesses• Compliance withfinancial legislations andregulations.
 Full exemption for the first 5years of activity and a rate of
8.75% thereafter.
 Reduced corporate tax rate of10 % Income tax set at 20%

Free zones in Morocco
Incentive
Incentive benefits
benefits inin FreeFree
Zones
Zones

TANGER FREE ZONETANGER AUTOMOTIVE CITYATLANTICFREE ZONETANGERTETOUANKENITRABERKANE
OUJDA

RABAT

FES
MEKNES
CASABLANCA

 Exemption
Exemption fromfrom custom
custom fees
fees andand
simplified
simplified customs
customs procedures
procedures Full
Full exemption
exemption fromfrom corporate
corporate tax
taxfor
first
5yearsandarateof8.75%
for first 5 years and a rate of 8.75%
forfor thethe following
following 20
20 years.
years.

MARRAKECHAGADIRNOUASSER AEROSPACECITY

 Full
Full exemption
exemption fromfrom income
income tax
tax forforfirst
first 55 years
years andand aa reduction
reduction ofof 80%
80%
forthefollowing
20years.
for the following 20 years.
 No
No restrictions
restrictions onon capital
capital orordividend
dividend transfers.
transfers.

20LAAYOUNEDAKHLAOUJDA SHORE
CLEANTECH

A business environment favourable to investment
Investor
Investor
Protection
Protection••51
51 Double
Double Tax
Tax Avoidance
Avoidance Agreements
Agreements••62Investment
ProtectionAgreements
62 Investment Protection Agreements••MemberMember ofof OECD
OECD Investment
Investment CommitteeCommittee••MemberofInternationalCentre
Member of International Centre forfor Settlement
Settlement ofof Investment
Investment Disputes
Disputes (ICSID)(ICSID)••MemberofMIGA(MultilateralInvestment
GuaranteeAgency)
Member of MIGA (Multilateral Investment Guarantee Agency)

Legal
Legal Reforms
Reforms•• The
The creation
creation ofof thethe BusinessBusiness Environment
Environment National
National Committee
Committee (CNEA)(CNEA) toto facilitate
facilitateprocedures
procedures andand access
access toto information,
information, andand toto carry
carry out
out legal
legal reforms
reforms•• TheThe modernisation
modernisation ofof businessbusiness lawlaw•• TheThe strengthening
strengthening ofof intellectualintellectual property
property protection
protection•• AA newlaw
onarbitration
andmediation
new law on arbitration and mediation•• NewNew banking
banking regulations
regulations•• Administrative
Administrative simplification
simplificationAn
An Incentive
Incentive Tax
TaxSystemSystem•• Reduction
Reduction ofof tax
tax burden
burden•• Thecreationoffunds
The creation of funds specificallyspecifically forfor investment
investment promotion
promotion

InternationalInternational
Instruments
Instruments•• Morocco
Morocco adheredadhered toto thethe OECD
OECD Declaration
Declaration onon Propriety,
Propriety, Integrity
Integrity andand Transparency
Transparency inin thetheConductofInternationalBusinessandFinanceandtotheOECDDeclaration
onGreenConduct of International Business and Finance and to the OECD Declaration on GreenGrowthGrowth

Morocco is "the most improved" country in business regulations in 2011+21 positions in global ranking

21

MIDA, serving investors

22Thank you for your attention

www.invest.gov.ma

23

APPENDIXES

Major investment projects of 2011• €160M invested in aerospace manufacturing factory.
• Start of implementation in 2012 and of manufacturing in 2013.

• Thales establishes its African Headquarters in Morocco (formerly in France)• Morocco = 15% of turnover in Africa• 50/50 Joint Venture: new factory for the production of harnesses and electricity
cabinets for tramways and high-speed trains.
• €30M• 400 jobs
• 1st Four Seasons in North Africa.
• €160M investment on 15 hectares.
• Inaugurated November 2011

• €90M• Acquisition of 63.9% of Moroccan pharmaceutical manufacturer Promopharm.

25

Major investment projects announced in 2012
• Launch of its new 13 000 m² logistics platform in Sapino Industrial Park.
• €3.5M investment.

• Inauguration of new 3 000 m² factory in Berrechid.
• €3.2M investment and additional €11M investment for 2014.
• Should employ 2 500 people.
• The Indian number one in generic medicine manufacturing opens in Casablanca.
• Approximately €2M invested.

• €20M investment.
• Established in Tangier Automotive City, near Tangier.

• €40M investment in its Nouaceur factory for a new production line for “Pulpy” juice,
the newest addition to its Miami brand.
• Total investment of €80M for the whole of its Moroccan activities in 2012.
26

The fight against corruption in MoroccoMorocco signed the United Nations Convention against Corruption on 9 December 2003 and ratified it on 9May 2007.



Morocco signed the OECD Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions in 1997 and ratified it in 2000.

The Central Authority for Corruption Prevention (L’Instance Centrale de Prévention de la Corruption - ICPC)
was created in March 2007.

The Council of Competition and the ICPC were constitutionalised in June 2011.

A harmonious and coherent system to fight against corruption was implemented in June 2011.



The new Constitution guarantees free elections, strict neutrality, fair access to resources, protection forwitnesses of corruption, etc.

The new government is immediately and firmly committed to fighting corruption, having launched 59
measures related to good governance while strengthening the ICPC’s acting authority.

27

Morocco in the world

Member of the United Nations (UN) since November 1956.

Non-permanent member of United Nations Security Council (UNSC) until 2013.



Member of the World Trade Organisation (WTO) since January 1995.

Member of OECD Investment Committee.

The Kingdom of Morocco is a very active member of the NATO Mediterranean Dialogue, established by theforeign ministers of NATO countries in December 1994.

Major non-NATO ally since January 2004.

Major partner of the European Union (EU).

Signature of Morocco-EU Advanced Status in 2008.
Since February 2012, Morocco has gained the right to participate in all current and future EU programmes.

Morocco is also a member of the Arab League (AL), the Arab Maghreb Union (AMU), Francophonie, theOrganisation of the Islamic Conference (OIC), the Group of 77, the Union for the Mediterranean (UfM), andthe Community of Sahel-Saharan States (CEN-SAD).

28

Morocco offers a solid banking systemwith local players who are developing internationally thanks to their presence in Africa.

Key Factors• The highest penetration of banking services in Africa after South Africa.
- Bank assets reached 73% of GDP, as opposed to 69% in Egypt and 33% in Algeria.
• 3 national banks in African Top-10- Attijariwafa Bank: #6- Groupe Banque Populaire: #8- BMCE Bank: #9• A strong presence in African countries to support Moroccan businesses.

$1.5B Turnover$0.8B Turnover$35B Assets$19B Assets

2010: African Bank ofthe Year

29

Source: BCEAO, IMF – World Economic Outlook, April 2010, PNUD – HDR database (2010), Bank Al-Maghrib, websites & annual reports, BCG analysis