Tips for doing Business in Morocco

Morocco is a country situated in the continent of North Africa. It is separated from Spain by the Strait of Gibraltar. It has a Mediterranean climate. It is primarily an Islamic nation. Since it was under French colonial rule till 1965, French is the business language. The major cities in Morocco are: Marrakesh, Casablanca, Fes, Agadir and Tanger. Casablanca, Agadir and Tanger also have an international airport. One can also reach Morocco through Spain via a ferry! Its currency is the Moroccan dirham (MAD) and as of 26th May 2009, 1.00 MAD=0.123942 USD.

Tips for doing business in Morocco

Sectors ripe for investment
Before embarking on a business plan, it is important to have an understanding of the Moroccan economy. Agriculture, mining and tourism are the main industries in Morocco. Morocco has deposits of phosphate, iron ore, manganese, lead and zinc. In fact it is the third largest producer of phosphate in the world. It is also the biggest exporter of phosphate. Its proximity to the Atlantic ocean has made fishing an important industry . Barley, wheat, wine, vegetables and olives are the main agricultural products. Drought is one of the main problems faced by people living in Morocco. This has resulted in the country having to import large quantities of food grains. Morocco exports fruits and vegetables and imports cereals and sugar. Leather goods, textiles, construction, tourism and art and crafts are some of the other industries of importance.

The sectors ripe for investment are as follows:

Oil and Natural Gas Exploration
Morocco has significant amount of unexplored oil deposits. For a long time oil imports imposed a burden on the country's BOP (Balance of Payments). In order to overcome this problem, parts of the energy sector were privatized and in 1989, a law was enacted to implement the sale of the state owned companies in the energy sector. The government also started offering sops in the form of low franchise duty. The foreign oil companies are now required to pay a franchise duty of 10% in case of oil and a paltry 5% in case of natural gas exploration. Recently "Dana Petroleum", a British oil company acquired a major stake in oil explorations that were taking place off the coast of Morocco. Clearly the energy sector in Morocco is a 'sunrise industry' and holds great promise for the future.

Agriculture
U.S. and Morocco signed a FTA (Free Trade Agreement) in 2004. The agreement has resulted in Morocco doing away with its quotas and tariffs in case of staples like potatoes. Corn and soybeans can also be imported into Morocco at a lower tariff. Tariffs and quotas result in increasing the price of the imported goods. Doing away with these barriers to free trade has benefited both the countries. It would be a good idea to start a business that deals with exporting agricultural produce to Morocco.

Telecommunications, construction, engineering, finance and insurance are some of the other industries that can provide excellent investment opportunities since they have been covered under the FTA.

Procuring Licenses
Starting a business would require a license. Fortunately, Morocco has set up a group of Regional Investment Centers (RICs) in the country. The RICs expedite the process of acquiring a license and have made the entire process rather enjoyable. There are in all 16 RICs situated in various parts of Morocco.

Labor Laws
Labor Laws are an important consideration for any business. Workers both foreign and domestic are governed by the same labor laws. The salaried employees are expected to be paid on a monthly basis. The blue collar workers have to be paid twice a month. All workers have to be registered under the Moroccan social security system or the CNSS.

Understanding the Moroccan Culture
Last but not the least one must have a good understanding of the Moroccan culture. Whether Morocco or Germany, any business will find it impossible to flourish if it offends the natives through a series of "faux pas".

Staring a business in an unknown territory can be quite a challenge. The challenge, if dealt with wisely can prove to be a rewarding experience.