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Overview (February 2007) - International Law Office

International Law Office

Company & Commercial - Morocco

Overview (February 2007)

February 12 2007

Limited Liability Companies and Joint Stock Companies
Branch and Representative Offices


The number of companies incorporated in Morocco continues to increase rapidly. This is due in part to the conclusion of international trade agreements (particularly with Europe and the United States), as well as changes in the legal framework, which now offers more benefits to foreign investors. Furthermore, a recent decrease in the amount of paid-in capital required to start a business (particularly for limited liability companies) has contributed to this phenomenon, as many companies are finding Morocco more attractive as an investment market. Likewise, many small business owners - who previously found incorporation prohibitively costly - are now seizing the opportunity to incorporate.

There are several types of corporate structure; the most common are joint stock companies (sociétés anonymes) and limited liability companies (sociétés à responsabilité limitée). Both types of company offer limited liability to shareholders and have the legal capacity to enter into all types of contract without involving the parent company from a legal standpoint, which protects the latter from any claim from employees or third-party contractors.

Limited Liability Companies and Joint Stock Companies

Limited liability companies are easier to manage because they:

  • require only one manager and no auditors;

  • can be owned by a single shareholder; and

  • need a minimum capital of only Dh10,000 (approximately $1,000), paid in full at the time of incorporation.

Limited liability companies may be converted into joint stock companies.

Joint stock companies must have a minimum of five shareholders and between three and 12 directors. The minimum capital for incorporation is Dh300,000 (approximately $30,000), 25% of which must be paid in at the time of incorporation. The remaining balance is due within three years.

The incorporation process is straightforward; it includes the following:

  • application for authorization to use the company name and trademarks;

  • registration of the corporate documents with the Trade Office; and

  • registration with the tax administration.

The timeframe for establishing a company in Morocco is approximately three weeks from completion of the incorporation file.

For most industries, there is no restriction on foreign ownership; among other incentives, foreigners enjoy the right to repatriate their investments and capital gains.

Branch and Representative Offices

Certain organizations choose to open a branch office or a representative/liaison office rather than to incorporate. Although the procedure is similar to incorporation, it is less burdensome with respect to the volume of paperwork. A branch office is subject to the same tax regime as a company; however, unlike an incorporated company, a branch office has no legal capacity to enter into contracts and trade in its own right. The parent company must be involved in all contracts (including employment agreements) from a legal standpoint. Representative/liaison offices enjoy tax advantages, but cannot carry out commercial activities. Their activities are limited to promoting the company.

The timeframe for establishing a branch or representative office is approximately two weeks from completion of the file.

For further information on this topic please contact Nadia Kettani at Cabinet Kettani by telephone (+212 2 243 8900) or by fax (+212 2 220 5925) or by email (k.nadia@kettanilawfirm.com).

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