Morocco, a land of opportunities and promising markets, is gradually becoming more appealing to foreign investors seeking “good deals” in a market that’s not yet saturated. Beyond economic, fiscal, social, or even legal considerations, every investment project starts with the question: “how do I repatriate my money?”

Here’s an overview of the rules regarding fund repatriation from Morocco to abroad, concerning the most frequent operations.

Treatment of equity holdings:

Whether establishing a company, subscribing to a capital increase, or purchasing securities, investments in capital can take various forms. For foreigners investing in Morocco, such investments and the potential repatriation of the invested sums are free. To do so:

• The funds used to finance the operation must be reported and deposited with the Office des Changes, detailing the funds’ transfer operation.
• In case of divestment (sale of shares, liquidation, etc.), to repatriate the funds, the interested party must provide various documents, as per specific cases (see art.769 of the Foreign Exchange Operations Instruction, downloadable here).

Also noteworthy: a Moroccan company partially or fully owned by foreign investors must annually update its legal file with the Office des Changes (art.766-III of the instruction).

Treatment of cash advances / loans granted:

Any Moroccan company can benefit from loans or advances from foreign sources, provided they comply with the “applicable rules in foreign markets.”

To repatriate the principal, interests, and commission on these loans/advances:

• The investing lender must establish a contract/agreement with the borrowing Moroccan entity. A copy of the document must be submitted to the Office des Changes and must contain all transaction details (schedule, interest rates, repayment terms, etc., art.772 of the instruction).

Note: any prior repayment of the loan not mentioned in the contract requires prior approval from the Office des Changes.

Treatment of distributed dividends and real estate income:

Dividends:

Investing in a company aims to create value. The dividends thus generated are freely transferable, provided certain formalities are adhered to (art.727 of the instruction), such as:

•  The company’s balance sheet, minutes of the meeting deciding the distribution, and a list of shareholders residing abroad must be presented to the bank to initiate the transfer.
• The receipt for payment of the corresponding withholding tax (15% for corporate shareholders and 10% for individuals) is often required by the bank before processing the transfer.

It is worth noting that the investor may claim the tax paid in their home country according to the terms of the double taxation agreement between their country and Morocco, if applicable.

Real estate income:

In the case of a foreigner owning real estate in Morocco, the transfer of rental income is also free, provided:

• A statement of payments made, issued by the owner or the managing entity on their behalf.
• The lease agreement.
• The property ownership certificate for the leased property.

Treatment of generated capital gains (sale of shares, real estate, etc.):

Any foreigner who invested through the acquisition of real estate can, at any time, proceed with the sale of the property and repatriate the initial amount, increased or decreased by the corresponding capital gains or losses. To do so:

•  The initial transfer of funds used for investment must have been reported as indicated in the Foreign Exchange Operations Instruction (art.766).
•  Repatriation is subject to providing a copy of the sales agreement accompanied by documents justifying the payment of taxes due for the transaction.

Several other operations exist, each subject to specific formalities.

For more information, seek advice from our team of experts.