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26 February 20244 minute read

Morocco Foreign Exchange Office introduces changes to corporate/M&A matters

On 2 January 2024, the Moroccan Foreign Exchange Office published a new General Instruction on Foreign Exchange Transactions (IGOC 2024). The new provisions came into force on the same day. The purpose of the IGOC 2024 is to simplify the regime for current and capital transactions, making it more flexible. The IGOC 2024 contains a number of innovations compared with the previous version, which was published in 2022. The changes affect international trade, imports of goods, endowments for business travel, transfers of funds for family relief, travel for higher education abroad (including language study), and e-commerce.

The IGOC 2024 gives both natural and legal persons new opportunities to facilitate and encourage international trade. It also introduces the concept of "categorised companies." This refers to Moroccan legal entities categorised by the Customs and Indirect Taxation Administration (ADII) or by the Tax Administration (DGI) or with the joint categorisation of these two Administrations (ADII-DGI). The IGOC 2024 applies a favourable regime to them in terms of payment for their imports of goods, international trade, the e-commerce allowance and the business travel allowance (new article 17 bis of the IGOC 2024).


Focus: IGOC 2024 and corporate/M&A

The IGOC 2024 has also introduced new provisions relating to corporate/M&A practice.

The IGOC 2024 makes it possible to transfer directors' fees to resident foreigners after paying tax (article 150 of the IGOC 2024). Directors' fees refer to payments received by company directors or board members as remuneration for attending meetings and taking decisions. This new provision is intended to encourage foreign participation in Moroccan companies.

The IGOC 2024 also introduces new measures to encourage foreign investment:

  • With regard to young innovative companies in new technologies, listed with the Agence de Développement du Digital, the IGOC 2022 already provided that the founders of those with a firm commitment of financing from foreign financial backers can create entities under foreign law by contributing part or all of their shares in the young companies. To promote their development, the new foreign exchange regulations now allow investors (legal entities, individuals, OPCCs or financial institutions) to contribute some or all of their shares in these companies to foreign-registered entities. The text specifies that income and proceeds from the sale or liquidation of these investments must be repatriated and sold on the foreign exchange market by the investors within 30 days of the date of payment (article 169 bis of the IGOC 2024).
  • As an extension of the innovations introduced by Law 58-22 with regard to OPCCs (Organismes de Placement Collectif en Capital) (see the client brief on the development of Moroccan private equity in the light of changes to the OPCC regime written by Benoit de Monval, Partner in our Casablanca office), IGOC 2024 has made the foreign exchange rules governing foreign investments by OPCCs more flexible by amending the authorised limit for such investments. The limit is now calculated on the basis of subscriptions collected in dirhams and no longer on the basis of the value of the net assets made up of securities denominated in dirhams (Article 179 of the IGOC). So, at present, the sum of the credit balances of all the accounts opened in the name of the same OPCC, plus the portfolio value of foreign currency-denominated securities already acquired, cannot exceed the limit of 50% of subscriptions collected in dirhams.

The new IGOC 2024 also clarifies some provisions of the IGOC 2022 which had, at least in some cases, raised questions among practitioners. One was Article 169, which now expressly states that foreign investment operations by Moroccan legal entities, including those carried out in industrial acceleration zones, still have to get prior authorisation from the Foreign Exchange Office.

Overall, the IGOC 2024 is part of an approach to liberalising foreign exchange regulations aimed at providing economic operators with better support in carrying out their international operations by facilitating international transactions.