(Last updated: 2 Jul 2011)

Business etiquette

Business tips

Business is usually conducted in the office rather than over meals. Breakfast meetings are rare. Lunches are usually late and can be leisurely.

The dress code for business is smart and conservative. A suit and tie is appropriate for men, and a suit for women. Dress conservatively if travelling outside of cities. Wear clothing that is appropriate to the warm climate but respectful of the culture and religious customs.

Reconfirm appointments in advance and allow ample time between meetings in case of delays. Be punctual even though meetings can often start late.

Shake hands on arrival and departure.

Avoid making business appointments and meet contacts during the month of Ramadan.

Find out in advance in which language the meeting will be conducted. If necessary have an interpreter on hand.

If you are invited to your host’s home, take a small gift. Flowers or sweets are appropriate, not alcohol.

Foreign female business executives may occasionally encounter some resistance, although this is changing. Treat counterparts with respect and they will respond accordingly.

Please also note: Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

Although Morocco has reduced barriers to trade by liberalising controls and customs clearance in the last 10 years, there is still a substantial level of protection.

Commodity prices are determined by the market with the exception of items such as petrol, vegetable oil, flour and sugar. Morocco introduced a tariff system in 1998 for major staples – grains, oilseeds and sugar. While the system has resulted in more stable local prices of imports, there are significantly higher duties on low priced imports.

The maximum tariff rate is 35 per cent with an additional import surtax of up to 15 per cent on most goods. Imports are also subject to a Value Added Tax (VAT), varying from zero to 20 per cent. VAT is not always paid on locally produced goods such as corn.

Food products are subject to an average of 80 per cent cumulated duties and taxes. This means that the average consumer cannot afford imported food products.

Morocco’s Association Agreement with the European Union directs that tariffs on industrial goods be eliminated over the next 12 years, from 2001. Tariffs have already been removed from machinery and equipment. Tariffs on raw materials, spare parts and non-locally manufactured products will be reduced by 25 per cent per year over the next four years. Imported goods that are manufactured locally will, from 2003, be reduced by 10 per cent reduction each year over the next 10 years.

The customs authorities will not give a binding ruling on customs classification in advance. An informal advisory opinion may be obtained from the Director General des Douanes (Customs office).

While the government does not require locally registered firms to apply ISO 9000 standards, most multinational firms use the ISO system.

There is a free trade zone in Tangiers. The zone is open to foreign investors and businesses. Companies in the zone can import goods duty-free and are exempt from most taxes for export production. Warehouse storage in public or private warehouses controlled by the Customs Administration. Moroccan labour laws apply. Another free trade zone is planned for Nador.

For further information on import duties contact:

Director General des Douanes
avenue Hassan II
Rabat, Morocco
Tel: +212 7 269 001
Fax: +212 7 730 939
Email: addi@douane.msie.gov.ma

Labelling

There are no special regulations for marking the exterior of containers bound for Morocco. For ease of identification and clearance through customs, however, an indication on the outer containers of the net weight in kilograms, and other identification markings is useful.

Food labels can be in French or Arabic and must show country of origin. Local and imported canned foods and beverages must have the date of production and the expiration date printed on the can.

Documentary requirements

Commercial invoice

A commercial invoice is required and must describe the goods in French. No special invoice form is necessary. Certification of country of origin is required. Payments are made through bank-to-bank irrevocable letters of credit. Pro-forma invoices must be provided in most cases. Invoices on company letterhead, are required for both import licenses and foreign exchange transfers. 'To order' bills are acceptable as bills of lading. When sending promotional material, and especially promotional videos, state, in French, 'Promotional use only', and 'No Commercial Value'.

Goods imported under a temporary entry provision must be approved by decree of the Finance Ministry. Customs may authorise entry of goods on an individual basis. The limit for temporary entry is six months, renewable for up to one year.

Weights and measures

The metric system is used in Morocco. Metric measurements are mandatory.

Taxation

Tax exemptions are available according to the sector and the site where the enterprise is based:

• Income tax and corporate tax: The maximum income tax rate is 44 per cent. Full exemption for the first five years of operation and a 50 per cent reduction for the period beyond, applies to all export oriented companies. A 50 per cent exemption for the first five years of operation applies to companies that operate in less developed geographical zones and for crafts manufacturing companies. Fiscal conventions to avoid double taxation and bilateral conventions to guarantee investments exist.
• Capital registration fees: When forming or increasing capital, registration tax is fixed at 0.50 per cent. Capital registration is reduced to 0.25 per cent for deeds of partnership or capital increase of investment banks and companies whose main purpose is either stocks and shares management or application for other companies capital on joint account. Formalities for the acquisition of land destined for an investment project: complete exoneration. Land to be used for building or real estate development attracts a rate of 2.5 per cent.
• Stamp duty: Corporate stocks, founder's shares and bonds issued by companies are all free from both stamp duty and formalities.
• Notarial tax: The basis of assessment is the capital stock:
  • Up to 5000 dirhams (A$800) - one per cent
  • From 5000 to 10,000 dirhams (A$1600) - 0.5 per cent
  • Over 10,000 dirhams - 0.2 per cent
• Patent tax: Full exemption for the first five years of a company’s operation.

Further information is available in the investment section of the Ministry of Culture and Communication.