INVESTING

Morocco is living through profound changes. rich in its millennial history and its traditions, the Kingdom hosts its emergence and deals with confidence, determination and ambition, the challenges of the next decade.

Permanences ...

The Kingdom of Morocco is a Muslim monarchy multi-old founded in 788. constitutional monarchy, democratic and social conditions, the Moroccan political system based on pluralism and lives since 1998, a political alternation. The Moroccan society is characterized by its openness, its tolerance and hospitality. The Morocco is the last fifteen years in a process of economic and financial development.

 Economy liberal and open

 With an economic system based on private property, Morocco has signed association agreements with the European Union in 1996 (establishing a free trade area dice 2012) and with the United States of America USA, which is force since 2004. since 1986 and the introduction of Structural Adjustment Plan, Morocco calls for sweeping reforms of its economic structures privatization of monopolies, liberalization of certain sectors, public service concession to private operators, reform of financial markets, new law on commercial companies, tax modernized, Charter Investment Legislation .... very incentive: free detention of capital, free repatriation of capital invested (capital gains and dividends) treaty regime with the state providing for specific advantages ... .

The advent of His Majesty King Mohammed VI

Since his accession to the throne in July 1999, the action of the Supreme impulse a new dynamic structural reforms; It rests on three basic areas: strengthening democracy, economic performance efficiency, reduction of social inequalities. The challenge of the decade is to trigger a dynamic and sustainable growth to meet the challenge of globalization, integration of the Kingdom in Europe and, ultimately, ensure the well being of the population.

CHARTER OF INVESTMENT (LAW-BOX No. 18-95)

Dahir No. 1-95-213 of 14 Jumada II 1416 (8 November 1995) promulgating the framework law No. 18 -95 forming charter investment.

PRAISE GOD HAS ONLY!

 (Great Seal of His Majesty Hassan II)

 What is known by the present - may God to elevate and strengthen the content!

 What Our Chérifienne Majesty,

 Given the Constitution, including Article 26

DECIDED AS FOLLOWS:

 East promulgated and will be published in the Official Gazette, as a result of this Dahir, the Framework Law No. 18-95 forming investment charter, adopted by the House of Representatives on 7 Jumada I 1416 (October 3, 1995). Done in Rabat on 14 Jumada II 1416 (8 November 1995) To countersignature: Prime Minister Abdellatif Filali

LAW-BOX No. 18-95 FORMING CHARTER ON INVESTMENT

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FIRST TITLE

Objectives of the Charter of Investment

ARTICLE I

 with the provisions of the second paragraph of Article 45 of the Constitution, the fundamental objectives of state action for the next decade for the development and promotion of investments by improving the climate and investment conditions, the revision of the scope of tax incentives and measures to encourage investment.

ARTICLE 2

The measures provided for by this charter aimed at encouraging investment by:

- Reducing the tax burden related to the operations of acquiring materials, tools, equipment and land required for the investment;

- Reducing tax rates on income and profits;

- The granting of preferential tax regime for regional development;

- Strengthening the protections afforded to investors in developing remedies taxation national and local levels;

- Promotion of offshore financial centres, export processing zones and warehousing industrial franc;

- A better distribution of the tax burden and a proper application of rules of free competition, including a revision of the scope of tax exemptions granted.

 These measures also tend to:

- To encourage exports;

- To promote employment;

- Reduce the cost of investment;

-  Rationalize consumption of energy and water;

- Protect the environment.

PART II

Measures tax

Human Customs

ARTICLE 3

 Customs duties including import duties and taxes on imports are arranged as follows:

- the import duty can not be less than 2.5% ad valorem;

- capital goods, machinery and equipment and parts, spare parts and accessories, deemed necessary for the promotion and development of investment are subject to an import duty for a minimum rate of 2.5 % Ad valorem or a maximum rate of 10% ad valorem;

- capital goods, materials, tools and parts, spare parts and materials referred to above are exempt from tax on imports, taking into account the interests of the national economy.

 Value Added Tax

 ARTICLE 4

Are exempt from value added tax inside and import capital goods, materials and tools to be included in an account of detention and giving entitlement to deduct in accordance with the legislation on tax value added. Companies subject who paid the tax at the import or acquisition of local goods mentioned above have the right to a refund of that fee.

Registration Fees

ARTICLE 5

Are exempt from registration fees acts of acquiring land for a project investment, excluding acts referred to in paragraph

a) Second paragraph below, subject to the completion of the project within a maximum period of 24 months from the date of the act.

 Are subject to a registration fee at a rate of 2.5%:

 a) acts of acquiring land for carrying out operation estate and construction;

b) the first acquisition of buildings above a natural or legal persons other than credit institutions or insurance companies.

Are subject to a registration fee at the maximum rate of 0.50% contributions to society on the occasion of the constitution or the capital increase of society.

 Participation in the National Solidarity

ARTICLE 6

 The tax participation in national solidarity linked to the corporate tax is abolished. However, profits and income completely exempt from corporate tax under the present or future legislation establishing incentives for investment are liable, instead of participation in national solidarity, a contribution equal 25% of the amount of corporate tax which would have been normally due to lack of exemption.

Tax on Companies

ARTICLE 7

A. The rate of corporate tax is reduced to 35%.

B.  Companies exporting products or services are for the amount of their turnover from exports of specific benefits up to the total exemption from corporate tax for a period of five years and a reduction of 50% over this period. However, with regard to enterprises exporting services, exemptions and reductions above apply only turnover from exports made in foreign currencies.

C.  Companies that locate in the prefectures and provinces whose level of economic activity requires preferential tax treatment, receive a 50% reduction of corporate tax during the first five years following the date of their operation , Excluding establishments of companies not having their headquarters in Morocco, dependent on public works, supplies or services, credit institutions, insurance companies and real estate agencies.

D. The craft enterprises, whose production is the result of a mainly manual, receive a 50% reduction of corporate tax during the first five years following the date of their operation, and whatever the place of their location.

General Taxation on Income

 ARTICLE 8

A.  It is carried out a redevelopment rates in the scale of the general tax on income, the maximum tax rate should not exceed 41.5%.

B. Companies exporting products or services are for the amount of their turnover from exports of specific benefits up to the total exemption of general tax on income for a period of five years and a reduction of 50% of that tax beyond this period. However, with regard to enterprises exporting services, exemptions and reductions above apply only turnover from exports made in foreign currencies.

C. Companies that locate in the prefectures and provinces whose level of economic activity requires preferential tax treatment, receive a discount of 50% of the general tax on income during the first five years following the date of their operation, excluding establishments of companies not having their headquarters in Morocco, dependent on public works, supplies or services as well as estate agents.

D. The craft enterprises, whose production is the result of a mainly manual, receive a discount of 50% of the general tax on income during the first five years following the date of their exploitation, regardless that the place of their location.

E. The benefit from the advantages provided above is subject to the maintenance of proper accounting in accordance with the legislation.

 Depreciation Tapering

ARTICLE 9

 Are maintained for capital goods and during the period specified in the first article above, the measures envisaged by the legislation relating to corporate tax and the general tax on income in respect of depreciation Tapering.

 Provisions for investment in

 Tax on Companies and the General Tax Revenue

 ARTICLE 10

Are considered as deductible expenses, provisions made within 20% of taxable income before tax by enterprises to carry out an investment in capital goods, machinery and equipment, within the limit 30% of that investment, excluding land, buildings other than professional use and passenger vehicles.  Are maintained as deductible expenses, provisions made by mining companies for reconstitution of mineral deposits in accordance with the legislation relating to corporate tax or the general tax on income. The above provisions used for the purpose for which they were created are plotted on a provisional account entitled "provisions investment. The amounts shown in the "provisions investment" are only used:

 - by incorporation into the capital;

 - or subtracted from deficits of previous years.

 Profits Tax on Real Estate.

 ARTICLE 11

 In order to encourage the construction of social housing, is exempt from the tax on real estate profits, the profit made by individuals at the first transfer of buildings to residential use, subject to assignment n has not speculative and that housing presents a social character.

 Tax Patentes

 ARTICLE 12

 The tax variable principal amount of the tax patents was deleted. East exempt from tax on patent, any person or entity engaged in Morocco in a professional activity, industrial or commercial, and for a period of five years which runs from the date of commencement of its activity.  Excluded from this exemption establishments companies and firms not having their headquarters in Morocco, dependent on public works, supplies or services, credit, insurance companies and real estate agencies.

Urban Tax

 ARTICLE 13

 Are exempt from city tax, new construction, additions to buildings and appliances an integral part of the production facilities of goods or services, and for a period of five years following the completion of their or their installation. Excluded from this exemption establishments, companies and agencies referred to the last paragraph of Article 12 above, excluding companies leasing as regards the equipment they acquire on behalf of their clients.

 Local Taxation

 ARTICLE 14

 Regarding local taxation, there shall be a simplification and harmonization of the maximum rate and tax bases and their adaptation to the needs of development and investment.

 PART III

 Financial measures, land, administrative and other

ARTICLE 15

These various measures have as their object:

 - the free transfer of profits and capital for people who invest in foreign currencies;

 - the creation of a reserve land for the realization of investment projects and the definition of state participation in the acquisition and equipment of land required for investment;

 - the guidance and assistance of investors in achieving their plans, through the creation of a unified national body;

 - simplifying and streamlining the administrative procedure relating to investments.

 Exchange Regulations

 ARTICLE 16

 Natural or legal persons of foreign nationality, resident or not, as well as individuals Moroccan established abroad, who make investments in Morocco funded currency benefit for those investments, in terms of foreign exchange regulations, a convertibility regime guaranteeing them complete freedom to:

- the transfer of net profits tax without limitation as to amount or duration;

 - the transfer of proceeds of sale or total or partial liquidation of investment, including capital gains.

Support by the State of certain expenses

ARTICLE 17

 Companies whose investment programme is very important because of its amount, the number of stable jobs to be created, the region where it must be carried out, the technology which it will transfer or his contribution to environmental protection, may conclude with the State of the contracts granting them, in addition to the benefits provided in this framework law and the texts adopted to implement a partial relief following expenditures:

 - expenditure on the acquisition of land required for the investment;

 - infrastructure expenditure externally;

 - vocational training costs. The contracts mentioned above may include clauses stipulating that it will take to resolve any dispute relating to investment, which may arise between the State and Moroccan foreign investor, in accordance with international conventions ratified by Morocco in the field International Arbitration

 Fund Investment Promotion

 ARTICLE 18

 There is hereby established a trust account entitled "Fund Investment Promotion" to record transactions relating to the assumption by the State of the cost of benefits granted to investors under the scheme of investment contracts referred the article above as well as expenses necessitated by the promotion of investments.

 Industrial Zones

 ARTICLE 19

 In the provinces or prefectures whose level of economic development justifies special help from the state, it supports a part of the cost of development of industrial zones to be established.

 ARTICLE 20

 Each industrial zone, including the importance of the area justifies it, has a management committee composed of * users of the area and the developer, public or private person, and responsible for the management and maintenance the whole area, monitoring and maintaining security inside the zone and the proper application of the clauses of the specifications between the promoter of the area and users.

 ARTICLE 21

It is set up an administrative body responsible for the reception, guidance, information and assistance investors as well as investment promotion.

 Reducing administrative procedures

 ARTICLE 22

 It is carried out relief and the simplification of administrative procedures related to the investment. In all cases where the maintenance of an administrative authorization for the granting of benefits under this framework law is necessary, this authorization is expected to be granted when the hotel has remained silent on the follow-book at the request concerning for a period of sixty days from the date of filing the request.

Transitional Provisions

 ARTICLE 23

 Have kept the rights acquired by investors on the benefits they enjoy under the law establishing incentives for investment, which benefits remain in force until the expiration of the term and conditions for which they have been granted.

PART IV

 Agricultural Sector

 ARTICLE 24

 The provisions of this framework law does not apply to the agricultural sector whose tax regime, including one on investment, will be subject to special legislation.

 TITLE V

 Implementation Measures

 ARTICLE 25

This framework law will be put into force in accordance with the laws and regulations made thereunder.  The government is the presentation of laws and regulations needed to achieve the objectives set out in this framework law from the finance law for 1996