How to Set Up a Subsidiary Company in Morocco?

Setting up a subsidiary company in Morocco involves creating a legally independent entity fully owned by a foreign parent company. Businesses are increasingly entering Morocco to utilize its strategic location, skilled workforce, growing market, and access to African and European trade.

This blog will cover the key steps to establish a subsidiary in Morocco, including legal requirements, registration procedures, tax obligations, compliance needs, and tips for a successful setup.

Key Takeaways

• Business Structure: The most common structure for subsidiaries in Morocco is SARL (LLC) or SA (Joint Stock Company), offering flexibility and limited liability.
• Tax Compliance: Register with the Moroccan Tax Authorities, file annual tax returns, and follow Moroccan Accounting Standards.
• Company Registration: Submit the incorporation documents to the Regional Investment Center (CRI), which handles a one-stop registration process.

What are the Types of Subsidiaries in Morocco?

Understanding how to establish a subsidiary company in Morocco involves selecting the appropriate structure, which determines the level of control, legal responsibilities, and the type of activities the entity can undertake. Foreign investors can choose from several structures based on ownership, control, and business objectives. The main types include:

SARL (Société à Responsabilité Limitée)

A Limited Liability Company is ideal for SMEs. It allows complete foreign ownership, has no minimum capital requirement, and limits shareholder liability to their contributions. It’s simple to set up and manage.

SA (Société Anonyme)

A Public Limited Company is suitable for large businesses or those raising public funds. Requires a minimum of 5 shareholders and 300,000–3,000,000 MAD in capital. Offers a more complex structure with stricter governance.

Branch Office (Succursale)

An extension of the foreign parent company, not a separate legal entity. Fully liable to the parent, it must be registered locally and comply with Moroccan tax laws. Good for initial market entry or low-risk operations.

SNC (Société en Nom Collectif)

A general partnership where all partners have unlimited liability. Rarely used by foreign investors. Typically reserved for family-run or professional firms.

Joint Venture

A business partnership between a foreign and a local company. Can be contractual or take a corporate form like SARL or SA. Common in regulated sectors and infrastructure projects.

Step-by-Step Guide to Setting Up a Subsidiary in Morocco

Opening a subsidiary in Morocco involves several legal and administrative procedures. Below is a step-by-step guide outlining the key stages to establish and register your subsidiary successfully:

Step 1: Choose the Appropriate Business Structure

Decide on the most suitable legal structure for your subsidiary. The most common options for foreign investors are the SARL for SMEs and the SA for large-scale operations.

Step 2: Reserve the Company Name

Check the availability of your desired company name with the Moroccan Office of Industrial and Commercial Property (OMPIC). The name must be unique and comply with local regulations. Once approved, it will be reserved for a limited period to complete registration.

Step 3: Prepare Incorporation Documents

Draft the necessary incorporation documents, including the Articles of Association (statuts), identification of shareholders and managers, proof of address, and a declaration of non-conviction for managers.

Step 4: Register the Company

Submit the business incorporation documents to the Regional Investment Center (CRI), which handles a one-stop process for registration. Upon approval, you’ll receive a Certificate of Incorporation, Company Identification Number (ICE), Tax Identification Number (IF), and Business Register Number (RC).

Step 5: Open a Local Bank Account

Open a corporate bank account in Morocco to deposit the required share capital (if applicable). The bank will issue a certificate of deposit, which is part of the company registration process for specific structures, such as a Special Purpose Vehicle (SPV) or a Special Purpose Acquisition Company (SPAC).

Step 6: Register for Taxes

Register with the Moroccan Tax Administration (Direction Générale des Impôts). You’ll be enrolled for corporate income tax, VAT (if applicable), and other relevant tax obligations.

Step 7: Register Employees, Obtain Licenses, and Maintain Compliance

If hiring employees, register them with the National Social Security Fund (CNSS). Depending on your industry, secure any necessary licenses or sector-specific permits. Ensure ongoing compliance by maintaining accounting records, submitting annual financial statements, filing tax returns, and following Moroccan labor laws to avoid fines or legal issues.

Key Benefits of Establishing a Subsidiary in Morocco

Setting up a subsidiary company in Morocco offers key strategic and operational advantages for foreign investors. With its stable business environment, pro-investment policies, and growing regional influence, Morocco is an attractive destination for international businesses. Key benefits include:

• Access to Skilled Workforce and Growing Sectors: Morocco has a young, educated labor pool and growing opportunities in key sectors like automotive, textiles, renewable energy, and agriculture.
• Strategic Trade Location: Situated at the crossroads of Europe, Africa, and the Middle East, Morocco offers easy access to major international markets via well-developed ports and transportation links.
• Attractive Incentives and Free Zones: Foreign investors benefit from tax breaks, customs advantages, and special investment zones such as Casablanca Finance City and free industrial zones.

Essential Documents for Registering a Subsidiary

If you’re researching how to form a subsidiary in Morocco, preparing the correct documentation is a critical step in the process. Local authorities require a detailed set of legal and corporate documents to approve foreign-invested enterprises. Below is a list of the essential paperwork you’ll need:

• Application for Company Registration: A Formal application submitted to the Regional Investment Center (CRI) to initiate the registration process and enter the Commercial Register.
• Articles of Association (Statuts): This charter outlines the company’s legal structure, capital, business purpose, management rules, and shareholder details.
• Identification Documents: Valid passports or national IDs of the shareholders, directors, and legal representatives.
• Power of Attorney: Required if a local representative (e.g., legal advisor or consultant) is authorized to act on behalf of the foreign parent company during registration.
• Proof of Registered Address: Lease agreement or ownership document confirming the physical office location of the subsidiary in Morocco.
• Tax and Social Security Forms: Registration with the Morocco Tax Administration for obtaining the tax ID (Identifiant Fiscal), and with the National Social Security Fund (CNSS) for employment purposes.
• Bank Account Certificate: Confirmation of opening a corporate bank account in Morocco.
• Sector-Specific Licenses or Permits: Certain sectors, such as finance, telecommunications, and pharmaceuticals, may require additional licenses or government approvals before commencing operations.

Note: If you are not sure about setting up a subsidiary company in Morocco, it’s advisable to work with a local legal expert to ensure accuracy and full compliance.

Legal Structures Available for Subsidiaries in Morocco

When considering setting up a subsidiary company in Morocco, it’s essential to choose the proper legal structure. The type of entity you register affects your ownership rights and liability. In Morocco, foreign investors typically establish subsidiaries under one of the following legal structures:

• Limited Liability Company (SARL): The most popular and flexible structure. Offers limited liability, suitable for small to medium businesses, with simple management and reporting requirements.
• Joint Venture (JV): A business formed through a partnership between a foreign and local entity, often structured as a SARL or SA. JVs are common in regulated sectors like energy or public infrastructure, where local expertise or compliance is beneficial.
• Branch Office: An extension of the foreign parent company, not a separate legal entity. The parent company is fully liable for its operations. Suitable for testing the Moroccan market or maintaining a non-autonomous business presence.
• Representative Office: Used only for non-commercial activities such as promotion, liaison, or market research. It cannot carry out commercial transactions or generate revenue in Morocco.

Note: For most foreign investors who are looking at how to create a subsidiary in Morocco, the SARL is the preferred choice due to its ease of setup, full foreign ownership, and legal protections.

Taxation Rules and Incentives for Subsidiaries in Morocco

Understanding Morocco’s tax system is essential when planning how to set up a parent company with subsidiaries in Morocco. The country offers a competitive corporate tax regime along with attractive incentives to encourage foreign investment.

Here’s an overview of the taxation rules and benefits for foreign-invested subsidiaries:

Corporate Income Tax (CIT)

In Morocco, companies are taxed on net profits earned within the country. For the fiscal year 2025, the standard Corporate Income Tax (CIT) rates are as follows:

• 17.5% for income up to MAD 300,000.
• 20% for income from MAD 300,001 to 1 million.
• 22.75% for income from MAD 1 million to less than MAD 100 million.
• 34% for income of MAD 100 million or more.

Industrial companies have a flat CIT rate of 21.5% for income below MAD 100 million. Income above that threshold is taxed at 34%.

Tax Incentives for New Businesses

Subsidiaries in Morocco operating within Industrial Acceleration Zones or under the Casablanca Finance City regime benefit from full corporate tax exemptions for the first five years, followed by reduced rates. Additional incentives are available for businesses in priority sectors like renewable energy, tourism, agriculture, and technology. Engineering and construction firms may opt to pay an 8 percent flat tax on contract value instead of the standard corporate tax.

Tax Compliance Requirements in Morocco

Subsidiaries in Morocco must register with the General Tax Authority (DGI) to obtain a tax identification number and with the CNSS for social contributions. They must file annual corporate tax returns within three months after the fiscal year ends, and pay taxes via four instalments throughout the year based on the previous year’s tax liability.

Regulatory and Compliance Requirements in Morocco

Whether you’re setting up a subsidiary company in Morocco or exploring how to start a parent company in Morocco, understanding ongoing compliance is critical. Businesses must meet legal, tax, and reporting obligations to operate smoothly and avoid penalties. The following are the key compliance requirements:

• Legal Compliance: Adhere to the Moroccan Commercial Code and Labor Code, maintaining accurate corporate records and employment contracts.
• Tax Compliance: Register with Moroccan Tax Authorities, file annual CIT returns, and comply with VAT regulations. Pay taxes quarterly.
• Social Security and Labor Compliance: Register employees with CNSS for social security contributions and ensure contracts comply with labor laws.
• Annual Reporting: Submit annual financial statements following Moroccan Accounting Standards (MAS), undergo audits if required, and file tax returns on time.
• Other Obligations: Report any changes (address, shareholders) to authorities promptly and maintain accurate accounting records.

Note: Post incorporation, subsidiaries in Morocco must register for CIT, file annual tax returns within the required deadlines, and make quarterly tax payments.

Do You Need a Physical Address for a Subsidiary in Morocco?

Yes, a physical address is required when setting up a subsidiary company in Morocco. It must be a real office location (not a P.O. Box) for legal and tax purposes. Virtual offices or co-working spaces are also acceptable if they meet regulatory requirements.

The address will be used for official communications and legal notices. It can be a leased office, co-working space, or owned property, as long as it complies with Moroccan regulations.

Operational Setup for a Subsidiary in Morocco

Setting up a subsidiary in Morocco requires registering employees with CNSS, obtaining work permits for foreign staff, and securing a physical office address. You’ll also need to open a corporate bank account, implement an accounting system per MAS, obtain necessary licenses, and stay updated on regulatory changes.

How to Open a Business Bank Account for a Subsidiary in Morocco?

Opening a bank account is essential when setting up a subsidiary company in Morocco. It allows for capital contributions, daily transactions, and tax compliance. Here are the key steps:

1. Select a Bank: Choose a reputable local or international bank operating in Morocco, such as Attijariwafa Bank, Bank of Africa, or BMCE Bank.
2. Prepare Required Documents: Gather necessary documents, including the Company Registration Certificate, Articles of Association, Company Charter (notarized), TIN, and Legal Representative’s ID (passport or national ID).
3. Visit the Bank: The legal representative (or authorized person) must visit the bank in person to submit the required documents and complete the application process.
4. Submit Documents and Open the Account: Provide all necessary paperwork to the bank officer for account setup.
5. Deposit Initial Capital: Some banks require an initial deposit or proof of capital contribution from the parent company to activate the account.
6. Account Activation and Use: Once approved, the bank will activate the account, enabling the subsidiary to manage transactions, make capital transfers, handle payroll, and fulfill tax requirements.

Is an Operating Agreement Necessary for a Subsidiary in Morocco?

In Morocco, an operating agreement is not required, but a Company Charter (or Articles of Association) is mandatory for a subsidiary. This document outlines the company’s structure, ownership, and governance. While not legally required, having a clear agreement is recommended for joint ventures or companies with multiple shareholders to avoid disputes.

Opening a Branch vs. a Subsidiary: What’s the Difference?

When expanding into Morocco, foreign companies can choose between establishing a subsidiary or opening a branch office. Both structures allow a business presence, but they differ significantly in terms of legal status. Here is a concise comparison table outlining the key differences between the two:

How Commenda Can Help You Expand in Morocco

Expanding into Morocco involves legal, tax, and operational steps. Commenda simplifies the process, offering support from selecting the right business structure to completing company registration and obtaining licenses. We ensure your business is set up correctly under Moroccan law.

With deep local expertise, Commenda assists with every step of incorporation, from choosing the right business structure to securing investment licenses and completing company registration. Our team also provides ongoing compliance, payroll, and legal support to ensure your operations run smoothly. 

Book a demo today to see how Commenda can simplify your expansion into Morocco.

FAQs

Q. How much does it cost to set up a subsidiary in Morocco?

Typically, the cost of company registration in Morocco, such as a limited liability company, ranges from MAD 10,000 to MAD 50,000 (approximately USD 1,026 to USD 5,130), which includes notary fees, Trade Register fees, and Chamber of Commerce fees.

Q. How long does it take to register a subsidiary in Morocco?

The registration process typically takes 2-3 weeks. The time can vary depending on the type of company being registered, the complexity of the application, and the efficiency of the relevant authorities.

Q. Can a foreigner fully own a subsidiary in Morocco?

Yes, foreigners can fully own subsidiaries in most sectors. Morocco allows complete foreign ownership with no restrictions in many industries, making it an attractive destination for foreign investors.

Q. What are the common challenges when opening a subsidiary in Morocco?

Common challenges include managing bureaucracy, meeting document legalization requirements, language barriers, delays in government approvals, and understanding local labor and tax compliance laws. Having local legal support helps avoid costly mistakes.

Q. Do subsidiaries in Morocco need a local director or representative?

Yes, subsidiaries must appoint a legal representative in Morocco who is responsible for handling official matters. The representative does not need to be a Moroccan national but must reside in Morocco.

Q. What are the annual compliance requirements for subsidiaries in Morocco?

Subsidiaries must submit annual financial statements, corporate income tax returns, VAT filings, and ensure social security contributions are made for employees. Compliance with Moroccan accounting standards (MAS) is mandatory.

Q. Can a subsidiary hire employees directly in Morocco?

Yes, subsidiaries can hire employees directly in Morocco. They must comply with Moroccan labor laws, including signing labor contracts, registering employees for social security, managing payroll, and adhering to workplace safety regulations.

Q. What happens if a subsidiary fails to meet compliance rules in Morocco?

Failure to comply can lead to penalties such as fines, late payment interest, administrative sanctions, suspension or revocation of the business license, and potential legal actions, all of which can disrupt business operations and damage reputation.

Choosing the Corporate Form

1. Recommended corporate forms: Société à Responsabilité Limitée (SARL) and SARL with Associé Unique (AU)

2. Alternative forms: Public Limited Company (SA) and joint ventures

3. Characteristics comparison of SARL and SARL AU: capital requirements, management roles

Legal Framework and Requirements

1. Legal similarities with French commercial and employment law

2. Role of the Regional Investment Centre (CRI) in setting up

3. No limitations for foreign ownership in companies

Incorporation Process

1. Obtaining a negative certificate for the company name

2. Drafting and signing articles of association in French or Arabic

3. Gathering necessary documents and establishing a bank account

4. Submission of documents to relevant authorities

Corporate Governance and Management

1. Management by Moroccan or foreign nationals

2. Role and necessity of a statutory auditor

3. Transferability of shares and partner limitations

Registration and Formalities

1. Registering the company with tax authorities

2. Required documents and associated fees

3. Benefits of formal registration and compliance

Challenges and Considerations

1. Importance of legal and bureaucratic compliance

2. Managing foreign exchange obligations

3. Consideration of cultural and national sensitivities

Final Tips and Recommendations

1. Choosing an optimal location for the registered office

2. Utilizing competition by working with local law firms and accountants

3. Starting small and future considerations for growth and expansion

Conclusion

1. Recap of the procedural steps for setting up a subsidiary in Morocco

2. Importance of understanding local regulations and leveraging local insights

3. Encouragement to engage with professionals for a smooth setup process