Morocco has opened doors to Africa and entered more than 1000 commercial conventions with almost all sub-Saharan countries. Billions have been invested by Moroccan companies/institutions in banking, insurance business, industry, infrastructure projects. With an increasing focus on encouraging international commercial dispute resolution and growing economic prosperity, Morocco has vastly developed; we decided to speak with Professor Azzedine Kettani who has years of knowledge and research in Morocco’s commercial development.
How has Morocco developed in relation to its international corporate activity?
Morocco cumulates a fine-tuned legal system and a dynamic governmental strategy in order to develop its international corporate activity; examples are as follows:
- The Green Plan strategy “Maroc Vert”- Contributed to attract foreign investors in the agricultural and agro-industrial sectors and increased agricultural exports (which are one of the main sources of foreign exchange currency in the country), through tangible investment incentives and public subsidies.
- The Renewable Energies Reform - Launched in 2009, aims to encourage private economic operators to produce and market medium and high voltage electric power generated from renewable sources. This reform is expected to attract several foreign investments and to encourage new startups and foreign fundraising.
- The upgrade of the banking/finance laws and regulations in Morocco - Islamic finance has been regulated in 2017 and investors from gulf and Middle East have with local ones opened several Islamic banks.In order to become investor friendly and open to new types of products, such as the Islamic finance for instance. The recognition by Morocco of tools such as ISDA’s master agreement templates allows Moroccan actors to use International legal instruments and international players to offer those a safe legal environment.
- The Moroccan “Digital 2020 Plan”– This aims to digitalise 80% of the administrative processes and to enable Morocco becoming a regional digital hub.
What is the biggest challenge the country is currently facing?
In short, to increase the judicial system efficiency and improve legal certainty. One of the most specific aspects usually relates to the difficulties that a foreign investor may face with respect to the enforcement of the limitation of liability, the liquidated damage clause, the security package or a foreign judgement. In this regard, one of the most important challenges, would be to speed up the settlement of disputes before local courts and to improve the length of judicial proceedings. However, foreign investors may avoid all these difficulties by recourse to arbitration and indeed, Morocco is a member of the New York Convention on the recognition and enforcement of foreign arbitral awards and a member of The Washington Convention on ICSID.
What are the current motives for people wanting to invest in Morocco? How does this compare to nearby jurisdictions?
- Political and social stability and safe business environment - In 2011, Morocco undertook a deep reform of its constitution aiming to increase individual and fundamental freedoms, liberalisethe economy, improve the administration transparency and confirm the primacy of international conventions and treaties on the internal law. This enabled Morocco to sustain its social and political stability as well as to ensure to foreign investors an appropriate and safe business environment compared with nearby jurisdictions.
- Comforting exchange regulation -The Moroccan exchange regulation has been amended in 2013 in order to enable foreign investors to freely transfer the incomes generated by their investments funded in foreign currencies (dividends/profits, rental incomes, loans interests, sale price and proceeds of the liquidation of assets).
With the media offering conflicting reports on Morocco’s societal development, what are common misconceptions international corporations have when investing in the country?
The most common misconceptions that our international clients have when investing in Morocco relates usually to:
- Ethics and transparency of the administration - Morocco has undertaken a deep reform of its administrative judicial system as to provide the administrative judges with full independency and power in order to protect citizens and economic players against the abuse of public authority.
- Slow judicial system - The civil and commercial procedures have been amended during the last ten years in order to enable faster conservatory and enforcement proceedings. The President of the Court is actually empowered to undertake very fast (no longer than 24 hours) conservatory measures through interlocutory proceedings as to prevent any serious and imminent risk of loss or damages as well as any breaches of the applicable laws. He is also empowered to enforce the payment of due debts instruments by interlocutory proceedings in no more than two weeks.
Does Islamic Law in Morocco have an effect on other legal sectors? If so, how?
Not at all. Islamic law applies to personal status and family law issues to Moroccan Muslims. It applies to Islamic finance activity, while commercial law, corporate law and all matters relating to business and economy are regulated by specific laws and codes that are similar or close to European law.
