What type of company do we need in Morocco?

17 March 2022 - Dr. Christian Steiner

Unless a commercial agent or a simple branch office is suitable for the needs of entering the Moroccan market, there is a wide range of companies available to us there, familiar from continental European law. Moroccan company law provides for the following company forms:

– the joint-stock company (regulated by Law No. 17-95) on the one hand and the other forms of companies regulated by Law 5-96, namely

– the general partnership,

– the limited partnership,

– the partnership limited by shares,

– the limited liability company,

– the holding company,

– the simplified joint-stock company formerly regulated in Act 17-95.

The companies differ firstly according to whether it is a partnership (without its own legal personality) or a corporation (legal person); there are then differences with regard to the number of partners required, the maximum life of the company, the content of the articles of association and the minimum share capital required for formation.

What are the most common forms of company used by foreign entrepreneurs investing in Morocco?

The most commonly used companies in Morocco are the limited liability company (Société à Responsabilité Limitée, SARL) and the public limited company (Société Anonyme, SA). The simplified joint-stock company in its new regulation is likely to rival the previous stars in the family of the joint-stock company in the future due to its flexibility.

What are the characteristics of a joint-stock company?

A joint-stock company is a commercial company whose capital is divided into tradable shares representing the capital contributions of the shareholders. The latter, also called shareholders, must be at least five persons and are liable for the company’s debts only with the contributed part of the capital. The formation of a public limited company requires a minimum share capital of 3,000,000 MAD if the company is listed; otherwise, the required capital is reduced to 300,000 MAD. The company’s memorandum and articles of association must be in writing and signed by all shareholders. Two main bodies govern the company: the shareholders’ meeting and the board of directors. Law 17-59 not only sets out the basic characteristics of the company limited by shares, but also requires a number of obligations in terms of transparency and external control, non-compliance with which entails penal consequences for the company’s administrators.

Due to its characteristics and requirements, which are much more complex than those of the SARL, the SA is usually activated for large business projects.

What are the characteristics of the limited liability company in Morocco?

The limited liability company is the most common type of company in Morocco. It is a commercial company and acquires legal personality after registration in the commercial register. The number of partners can vary from a minimum of one (in this case it is a sole proprietorship) to a maximum of 50. If there are more than 50 partners, the company must be converted into a public limited company. The shareholders are free to determine in the articles of association the amount of share capital originally contributed. There is no longer a minimum. The share capital must be deposited in a blocked bank account if it exceeds MAD 100,000, from which it cannot be withdrawn until the company is registered in the commercial register. Contributions by partners may also take the form of contributions in kind, in which case they are valued by an auditor (commissaire aux comptes).

Except in exceptional cases, the liability of the partners is limited to the capital contributed.

The articles of association / the statutes of the SARL must be in writing, legalised and contain at least the type of activity / purpose of the company, the registered office and the tax domicile of the company, the identification of the director(s). Non-shareholders may also become directors of a SARL. If the company is not a sole proprietorship, the shareholders must specify in the articles of association the liability regime to which they are subject.

What are the characteristics of the simplified joint stock company in Morocco?

The simplified joint stock company was introduced in 2021 and offers new flexibility for creative company formations. For the most part, it is left up to the shareholders themselves how they want to shape their company.

In contrast to the classic public limited company, no share capital is required. Furthermore, only at least one shareholder is required. The SAS enjoys great flexibility with regard to its internal organisation, which the management can determine through the articles of association. Only a chairman is mandatory. An auditor is only required if the turnover exceeds the threshold set in a regulation. Shareholders are also free to determine the frequency of board meetings and shareholders’ meetings in the articles of association. Shares may be assigned; the articles of association may provide for the inalienability of shares for a period not exceeding ten years. An authorisation clause is possible.

What formalities are required to set up a company in Morocco?

In order to reserve the company’s preferred name, it is necessary to obtain a negative certificate.

The articles of association are key to the proper functioning of the company. This is where the greatest attention is required, as mistakes in the company’s internal rules can literally hamper its operation forever or until it is dissolved if the shareholders cannot later agree on rectifications. The law lays down some binding rules that are not at the disposition of the shareholders. Other rules are open to derogation.

As proof of the company’s domicile, the authorities require the submission of a lease agreement in the company’s name or a provisional domiciliation agreement, the latter being valid only provisionally for six months.

After filing the registration with the competent regional tax directorate, the latter issues a tax certificate indicating, among other things, the type of activity carried out by the company and the date of commencement of the activity, as well as the tax address and number.

In order to obtain legal personality for the company, registration in the commercial register is required.

This allows the existence of the company to be declared to the tax authorities. This administrative procedure, which can be carried out at the local sub-directorate of the tax administration or at the regional investment centres, consists of assigning a tax identification number to the company, which must mandatorily be indicated on all invoices, reports and documents of the company.

To be effective vis-à-vis third parties, the establishment of the company must be published in a local newspaper or magazine and in the Official Gazette.

Before employing staff, the company must register with the Labour Inspectorate and join the National Social Security Fund.

Companies are required to open a current account with a Moroccan financial institution.

The handling of the above procedures, which are necessary in the case of the establishment of a company, is not of enormous complexity (except at times the drafting of the articles of association), but they require attention to details, signatures, stamps, legalisations, an unavoidable legal folklore for the birth of a new person with legal autonomy.

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Dr. Christian Steiner

Rechtsanwalt (Berlin)
Abogado (Sevilla, Spanien)
Managing Partner Maghreb & West Africa

17, rue El Bouhtouri, Quartier Gauthier

20060 Casablanca | MOROCCO

c/ Manuel Bermudo Barrera 3B, 2C

41004 Sevilla | SPAIN

+212 648 120 763

+34 684 083 156

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