Introduction

Electronics is a supplier of the aerospace, automotive and railway industries, as well as the fields of defence and security.

In Morocco this sector has experienced a steady growth in recent years with increasing opportunities, namely:

The sector is also likely to benefit from the possibility of the transfer of a significant part of Western European electronics to offshoring in Morocco.

Targeting this market encourages the emergence of new high added value activities such as lighting and energy efficiency, the electrical sector, public and private security, and renewable energy.

To achieve Morocco's full potential in electronics, the state is determined to support the development of the sector through the establishment of an offer focused on the development of speciality electronics, allowing the country to become a platform of production and export to Europe.

Main companies of the sector:

STMICROELECTRONICS, LEAR CORPORATION, AUTOMOTIVE ELECTRONICS MOROCCO, CROUZET, EOLANE, BM ELECTRONICS SYSTEMS

1. • The development of more and more products with a high added value;
   • The emergence of better integrated subcontractors;
   • The increase in the amount of electronics in automotive, aerospace, rail, renewable energy and defence systems.

Assistance and Support

1. Support for the sector’s ecosystems

Appropriate and targeted support is provided to companies in the ecosystems regarding finance, industrial land and training.

The Industrial Development Fund (FDI), operational since 1 January 2015, allocates 3 billion dirhams per year for the period 2014-2120 to ecosystem companies to enable them to realize their ambitions in upgrading, development and internationalization.

State support is also backed up with integrated and competitive bank financing.

The ecosystem companies can also:

2. Investment Promotion Fund (FPI)

Under the Investment Charter, the FPI offers partial coverage by the Government of certain expenses related to the acquisition of property (up to 20% of the cost of land), external infrastructure (up to 5% of the total amount of the investment programme, or 10% in the case of an investment in the sector of spinning, weaving or finishing) and vocational training (up to 20% of the cost of the training).

These contributions may be combined as long as the total contribution of the state does not exceed 5% of the total investment programme; or 10% in the case of investment in the sector of spinning, weaving or finishing; or when the investment project is located in a suburban or rural area.

Eligibility criteria:

3. Hassan II Fund for Economic and Social Development

The Hassan II Fund offers grants of up to 15% of the total investment amount, capped at 30 million dirhams, with the following conditions:

1. • Have access to quality industrial land thanks to the innovative concept of industrial rental parks;
   • Benefit their employees through relevant staff training courses.
   • The investment project must meet at least one of the following five criteria:
   • Represent an amount of 200 million dirhams or more over a 3-year period;
   • To be located in one of the provinces or prefectures mentioned in Decree No. 2-98-520 dated 5 Rabii I 1419 (30 June 1998);
   • Create a minimum of 250 stable jobs over 3 years;
   • Provide technology transfer;
   • Contribute to the protection of the environment.

   The total amount of the investment (excluding import duty and tax) must be 10 million dirhams or more and the investment in goods and equipment (excluding import duty and tax) must be 5 million dirhams or more.

   The investment application must include the following documents:

   4. Tax incentives

   Tax incentives are provided for by article 123-22°-a) of the General Tax Code and Article 7.1 of finance law No. 12-98 for the 1998/9 budget year as amended and supplemented by the following:

   5. Support for SMEs

   SMEs in the sector may benefit from special support within the programmes developed by MARPC PME:

   6. Free zone status

   A free trade zone (ZFE) is a specified area of land devoted to export activities for industrial purposes and related service activities. Each free zone is created and delimited by a decree that determines the nature and business activities that can be established there.

   The operational free trade zones are located at Tangier (Tanger Free Zone – TFZ and Tanger Automotive City – TAC), at Kenitra (Atlantic Free Zone – AFZ), at Casablanca (Midparc), at Rabat (Technopolis) and at Oujda (Technopole d’Oujda).

   To obtain free zone status under law No. 19-94, companies must have obtained authorization from the local commission of the free export zone, which is presided over by the wali or governor of the region, and must make at least 70% of their turnover from exports.

   Free zone status allows for the exemption of foreign trade and exchange controls, as well as access to the following state aid:

   Tax incentives resulting in:

   Customs benefits:

   Administrative facilitations:

   • 30% of the cost of professional buildings on the basis of a maximum unit cost of 2,000 dirhams per square meter before tax (excluding any contributions by the state for the acquisition of property and/or the construction of professional buildings);
   • 15% of the cost of acquisition of new capital goods (excluding import duty and tax) (excluding any contributions by the state for the acquisition of capital goods).
     • The statutes of the company;
     • A detailed description of the investment project;
     • References of the investor;
     • The cost of the project and the number of jobs created;
     • The method of financing the project;
     • Architectural plans of the buildings;
     • Surveying certificate;
     • A list of new equipment to purchase, with quotes;
     • Installation plans with all equipment shown to scale, with the designation of all equipment (in line with the aforementioned list of equipment);
     • The project schedule;
     • A completed application form requesting assistance from the Hassan II Fund.
     • The exemption from import duty on capital equipment, materials and tools necessary for the implementation of an investment project with a total cost greater than 200 million dirhams during 36 months after the signing of the investment agreement; this exemption is extended to parts, replacement parts and accessories imported at the same time as the aforementioned equipment;
     • The exemption from VAT on imports of capital equipment, materials and tools necessary for the implementation of an investment project with a total cost greater than 200 million dirhams until 36 months after the start of activity by the company or from the date of issuance of the building permit, and which may be extended by six months in the event of force majeure (renewable once); this exemption is extended to parts, replacement parts and accessories imported at the same time as the aforementioned equipment.
     • IMTIAZ CROISSANCE
     • ISTITMAR CROISSANCE
     • AUTO-ENTREPRENEUR
     • Exemption from income tax (IR) during the first 5 years, and then a reduction of 80% of tax on gross earned income during the following 20 years;
     • Exemption from corporation tax (IS) for the first 5 years, and then a rate of 8.75% for the following 20 years;
     • Exemption from professional tax for the first 15 years;
     • Exemption from urban tax for the first 15 years;
     • Exemption from participation in national solidarity;
     • Exemption from tax on income from corporate rights, dividends and similar income for non-residents and a reduction in tax to 7.5% for residents;
     • Exemption from import duties, and simplified customs procedures;
     • Unlimited exemption from value added tax in respect of products delivered and services supplied to the free export zones and from the subjected territory;
     • Exemption from registration fees and stamp duty on instruments of incorporation or increases in the capital of the company, as well as on land acquisitions;
     • The establishment of a one-stop service to the investor.

Training

A question of strategic importance of the IAP 2014-2020

The training of human resources is a strategic activity of the Industrial Acceleration Plan (IAP) 2014-2020. The availability and quality of human resources determine the attractiveness of Morocco as a destination, and increase the productivity and competitiveness of the companies.

Amongst other things the strategy aims at providing the ecosystems in place with skilled profiles.

The detailed mapping of training needs - with a quantification of the human resource requirements by sector, profile, region and year - and the identification of training opportunities available in Morocco are ongoing, which will enable the development of a national training plan.

The creation of a skilled human resource pool is encouraged through direct aid aimed at training and amounting up to 60,000 dirhams / person.

Consult the list of training needs for performance contracts signed by end - May 2017

Reception infrastructure

General and sectoral Integrated Industrial Platforms (P2I), possibly benefiting from the free zone status, guarantee the availability of property at an attractive price, comprehensive and diverse real-estate and logistics options conforming to the best international standards, as well as on-site services and a one stop shop for administration.

In the framework of the Industrial Acceleration Plan, the Ministry plans for the mobilization of 1,000 hectares to create Integrated Industrial Rental Parks (PIL) with turnkey premises: each park will include a one stop shop for administration, a local job pool, ad hoc services and a training program.