Companies expanding to Morocco need to establish a subsidiary in the country in order to start hiring and begin operations. This lengthy process can take anywhere from a few weeks to a few months, and it includes plenty of fees throughout the numerous steps. However, G-P’s Employer of Record model can help you start working faster. We’ll use our in-country subsidiary to hire employees to work on your behalf. We’ll also manage compensation and benefits and help you start working in a few days instead of a couple of months.
How to set up a Morocco subsidiary
To establish a subsidiary in Morocco, you must first determine your business goals and choose a location for your company. Morocco subsidiary laws may vary by region or location, so keep this in mind when researching locations for your business.
There are different types of legal forms available for your subsidiary in Morocco. These options include the société à responsabilité limitée or limited liability company (LLC), société anonyme or joint stock company, and société par actions simplifiée or simplified joint stock company.
Incorporating any company in Morocco is a challenging process that can cost a significant amount of time and money. Most businesses choose an LLC, and the incorporation process includes the following steps:
- Obtaining a physical office provider that can grant a lease agreement according to Morocco legislation for the incorporation of the entity.
- Getting a Certificat Négatif online that will register your company name with the Regional Investment Center.
- Drafting company by-laws and all incorporation-related documentation, including notarized, apostilled, and translated documentation from company founders.
- Opening a capitalization bank account, paying the capital of the company, and obtaining a certification that the funds have been blocked.
- Filing all prepared incorporation documents to the Regional Investment Center for the establishment of the company.
Once the entity has been legally established, the capitalization bank account should be converted into an operational bank account. The formation of the entity should be published to the legal and official gazettes within 30 days following the registration. Also, a declaration of investment should be submitted to the Foreign Exchange Office and the company’s corporate books must be registered with the corresponding authorities.
In order for the entity to be able to legally hire employees, you must register with the Caisse Nationale de Securite Sociale, the Moroccan social security authorities.
Morocco subsidiary laws
Morocco has complicated subsidiary laws that apply to LLCs. While the country does not have a minimum capital requirement, partners need to set the share capital free in the by-laws, which is commonly around MAD 10,000, but it is recommended to start the business with additional share capital to facilitate the registration and bank account opening. The entirety of the share capital must be paid and frozen so the company can be legally established. After the entity has been established, the capitalization account should be converted into an operational account to be able to use the funds to operate.
Management of an LLC can include 1 or more natural persons. Managers should be appointed by the articles of association or a 75% majority decision among the shareholders. These individuals will make all management decisions for your company and may be held personally liable. Non-residents can be appointed as managers of an LLC; however, it is strongly recommended to appoint a Moroccan resident as manager to be able to compliantly register your company and employees with social security authorities.
Finally, an LLC must file a report on management and accounts with the clerk of the Commercial Court within 6 months of the completion of the fiscal year and within 15 days of a typical shareholders’ meeting. If your Moroccan subsidiary has an annual turnover that exceeds MAD 50 million, you must appoint an auditor.
Benefits of setting up a Morocco subsidiary
Setting up a subsidiary in Morocco offers several benefits. An LLC operates independently from the parent company. This arrangement can protect the parent company from any losses or litigation. Plus, it allows the subsidiary to create its own structure that fits Morocco’s culture and workplace practices.
Other important considerations
Before setting up a subsidiary in Morocco, it’s advisable to assess the amount of time and resources it takes. Either a team member from your company will have to learn every aspect of Morocco subsidiary laws or you will have to invest significant amounts of money to hire professional counsel to assist with the process and maintenance to ensure compliance with local laws and regulations.
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