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Moroccan Economy

Investment

Foreign Investment in Morocco

Morocco has opted for a liberal, diversified economy, based on private initiative and largely open on the outside world. It offers conditions of success to investors thanks to its economic potentialities and human resources, to the perspectives which it enjoys as a link between two economic entities, the Maghreb and Europe, and particularly thanks to the political will to encourage investments.

Thanks to its remarkable performance, particularly in the industrial sector, Morocco is already in a position to contribute to an important potential with a view to engage in an efficient collaboration between operators interested in Morocco and abroad: trade exchange, sub-constructing, join venture investments and technical cooperation. The country has continuously strived to improve the investment climate through the strengthening of inducing measures and encouragement in favor of both national and foreign investors, notably through the following:

* Investment Codes interesting various economic sectors: industry, mining, maritime fisheries, real-estate, tourism, handicrafts, exportations;

* An exchange regulation that authorizes free and automatic transfer of the capital invested and related revenues;

* An investment credit policy and a reform of the financial system which aims to adapt the Moroccan banking system to European standards;

* Good quality reception infrastructures in such areas as road network, telecommunications and industrial zones;

* Agreements avoiding double taxation and ensuring investment guarantee along with bilateral and multilateral trade agreements;

* Harmonization and generalization in the area of accountancy: Morocco has endowed itself with a general Code of accounting normalization;

* A global reform of the capital market comprising the reform of the Casablanca Stock Exchange, the creation of collective bodies for the investment of movable property under the form of ICV's (investment companies with variable capital) and the creation of common investment funds;

* The creation of financial offshore markets, the first of which is operational since 1992 in Tangier;

* A large privatization program. INVESTMENT CLIMATE IN MOROCCO Openness to Foreign Investment The Moroccan government actively encourages foreign investment and has made a number of regulatory changes designed to improve the investment climate in recent years. Morocco welcomes foreign participation in its privatization program, and does not pre-screen or select foreign investment projects.

In October 1995 the Moroccan Parliament approved a new investment code. The code applies equally to foreign and Moroccan investors, with the exception of the foreign exchange provisions which favor foreign investors. The Ministry of Finance and External Investment has created an investment promotion office and, in compliance with the investment code, is studying unspecified measures to reduce the paperwork associated with investment. The investment code also codifies the existing foreign exchange regulations providing essentially free repatriation of foreign exchange related to foreign investment.

In April 1996 the Moroccan state electric utility signed an agreement with the U.S. company CMS and the Swiss company ABB for an electric power project valued at approximately $1.5 billion that will produce electricity for sale to the utility. The Casablanca city council recently signed a deal with a French firm for the management of the Casablanca water and electricity distribution system.

Private management of other infrastructure projects, including roads, ports, trash collection, and water and electric networks, are also under study. Morocco has a non-discriminatory legal system that is accessible. It is a member of the World Intellectual Property Organization (WINO) and is a party to the Berns Copyright, Paris Industrial Property, and Universal Copyright Conventions; the Brussels Satellite Convention; and the Madrid, Nice, and Hague Agreements for the Protection of Intellectual Property. Performance Requirements/Incentives There are no foreign investor performance requirements or requirements regarding local value added, local equity, substitution of imports or employment of Moroccan workers.

Transparency of the Regulatory System Morocco's economic reform program has included improvements in the regulatory environment. In particular, the liberalization of the foreign exchange allocation system, the import regime, and the financial sector have reduced the government's role in the economy. The Casablanca stock exchange was privatized in 1993. It has enjoyed a recent revival thanks to new laws designed to make the exchange more efficient and transparent, and the government's sale of shares of parastatal companies to the public. Conversion and Transfer Policies The Moroccan dirham is convertible for all current transactions and for some capital transactions, notably capital repatriation by foreign investors if the original investment is registered with the foreign exchange office. Foreign exchange is routinely available through the commercial banks on presentation of documents for the repatriation of dividends and capital by foreign investors, for remittances by foreign residents, and for payments for foreign technical assistance, royalties and licenses. No prior government approval is required.

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