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Morocco

Executive Summary

At the confluence of Europe, Sub-Saharan Africa, and the Middle East, Morocco seeks to transform itself into a regional business hub by leveraging its geographically strategic location, political stability, and world-class infrastructure to expand as a regional manufacturing and export base for international companies. Morocco actively encourages and facilitates foreign investment, particularly in export sectors like manufacturing, through positive macro-economic policies, trade liberalization, investment incentives, and structural reforms. The Government of Morocco implements strategies aimed at boosting employment, attracting foreign investment, and raising performance and output in key revenue-earning sectors, with an emphasis placed on value-added industries such as renewables, automotive, aerospace, textile, pharmaceuticals, outsourcing, and agro-food. Most of the government’s strategies are laid out in the New Development Model released in April of 2021. As part of the Government’s development plan, Morocco continues to make major investments in renewable energy, is on track to meet its stated goal of 64 percent total installed capacity by 2030, and announced an even more ambitious goal of 80 percent by 2050.

According to the United Nations Conference on Trade and Development’s (UNCTAD)  World Investment Report 2021  , Morocco attracted the ninth-most foreign direct investment (FDI) in Africa in 2020. Peaking in 2018 when Morocco attracted $3.6 billion in FDI, inbound FDI dropped by 55 percent to $1.7 billion in 2019 and remained largely unchanged at $1.7 billion in 2020. UAE, France, and Spain hold a majority of FDI stocks. Manufacturing attracted the highest share of FDI stocks, followed by real estate, trade, tourism, and transportation. Morocco continues to orient itself as the “gateway to Africa,” and expanded on this role with its return to the African Union in January 2017 and the launch of the African Continental Free Trade Area (CFTA) which entered into force in 2021. In June 2019, Morocco opened an extension of the Tangier-Med commercial shipping port, making it the largest in Africa and the Mediterranean; the government is developing a third phase for the port which will increase capacity to five million twenty-foot equivalent units (TEUs). Tangier is connected to Morocco’s political capital in Rabat and commercial hub in Casablanca by Africa’s first high-speed train service. But weak intellectual property rights protections, inefficient government bureaucracy, corruption, inadequate money laundering safeguards and the slow pace of regulatory reform remain challenges. In 2021, Morocco was placed on the Financial Action Task Force’s (FATF) “grey list” of countries subjected to increased monitoring due to deficiencies int the fight against money laundering and terrorist financing.

Morocco has ratified 72 investment treaties for the promotion and protection of investments and 62 economic agreements, including with the United States and most EU nations, that aim to eliminate the double taxation of income or gains. Morocco is the only country on the African continent with a Free Trade Agreement (FTA) with the United States, eliminating tariffs on more than 95 percent of qualifying consumer and industrial goods. The Government of Morocco plans to phase out tariffs for some products through 2030. The FTA supports Morocco’s goals to develop as a regional financial and trade hub, providing opportunities for the localization of services and the finishing and re-export of goods to markets in Africa, Europe, and the Middle East. Since the U.S.-Morocco FTA came into effect bilateral trade in goods has grown nearly five-fold. The U.S. and Moroccan governments work closely to increase trade and investment through high-level consultations, bilateral dialogue, and other forums to inform U.S. businesses of investment opportunities and strengthen business-to-business ties.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perception Index 2021 87 of 180 http://www.transparency.org/research/cpi/overview
Global Innovation Index 2021 77 of 132 https://www.globalinnovationindex.org/analysis-indicator
U.S. FDI in partner country ($M USD, historical stock positions) 2020 $457 https://apps.bea.gov/international/factsheet/
World Bank GNI per capita 2020 $3,020 https://data.worldbank.org/indicator/NY.GNP.PCAP.CD

 

1. Openness To, and Restrictions Upon, Foreign Investment

3. Legal Regime

4. Industrial Policies

6. Financial Sector

8. Responsible Business Conduct

Responsible business conduct (RBC) has gained strength in the broader business community in tandem with Morocco’s economic expansion and stability. The Moroccan government does not have any regulations requiring companies to practice RBC nor does it give any preference to such companies. However, companies generally inform Moroccan authorities of their planned RBC involvement. Morocco joined the UN Global Compact network in 2006 and in 2022 counts 24 private company as signatories, including the Confederation General des Entreprises du Maroc (CGEM), Morocco’s largest private sector lobbying group that represents more than 90,000 private companies. The Compact provides support to companies that affirm their commitment to social responsibility. While there is no legislation mandating specific levels of RBC, foreign firms and some local enterprises follow generally accepted principles, such as the OECD RBC guidelines for multinational companies. NGOs and Morocco’s active civil society are also taking an increasingly active role in monitoring corporations’ RBC performance. In 2017 a non-governmental National Observatory for RBC (ORSEM) was created with the objective of promoting responsible business practices, and in 2021, in collaboration with AtlantaSanad Assurance, a Moroccan insurance company, published its first corporate social responsibility guide. Morocco does not currently participate in the Extractive Industries Transparency Initiative (EITI) or the Voluntary Principles on Security and Human Rights, though it has held some consultations aimed at eventually joining EITI. No domestic transparency measures exist that require disclosure of payments made to governments. There have not been any cases of high-profile instances of private sector impact on human rights in the recent past. Morocco is not a signatory of the Montreux Document on Private Military and Security Companies, and Post is unaware of any private military companies operating in the country.

Department of State

Department of the Treasury

Department of Labor

10. Political and Security Environment

Morocco enjoys political stability. There has not been any recent damage to commercial facilities and/or installations with a continued impact on the investment environment. Demonstrations occur in Morocco and usually center on economic, social, or labor issues. Demonstrations can attract hundreds to thousands of people in major city centers. Participants are typically, but not always, non-violent and the demonstrations are peaceful and orderly.

Morocco has historically experienced terrorist attacks. Travelers should generally exercise increased caution due to terrorism as terrorist groups continue plotting possible attacks in Morocco. Terrorists may attack with little or no warning, targeting tourist locations, transportation hubs, markets/shopping malls, and local government facilities. Visitors are encouraged to consult the Department of State’s Morocco Travel Advisory for the most current information.

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