TIME FOR A CHANGE AND A CATCH UP WITH THE DIGITAL AGE!

Thanks to the secretary to the Minister of Industry, Trade, and Digital Investment Othman El Ferdaous for opening a room for discussion around a desirable environment for investment in Morocco. The #Fikrainvest have been brining independent thought and a lot of creativity on actions our country could undertake that would help reform the investment charter of 95…it’s time for a change!

To catch up with the digital age, these are some of the the axes I suggest to addressee in the #Fikrainvest debate;

(1) Review the Tax incentives: We’re no more in an environment of only physical goods and the charter of 95 and tax system have been thought in a physical goods context. We’re in an open and digital environment, Moroccan companies are often creating value online and sometimes for consumers worldwide and competing with companies in countries with more favorable tax systems. We should get rid of unnecessary protectionist policies;

(1-1)     Extend the scope of application of the 4th Article of the investment charter regarding VAT exemption to include ‘importation’ of services & online/digital services provided on a business to consumer basis (In an open era Moroccan companies collaborate with world class service providers and are obliged to act as VAT collectors)

(1-2)     Reduce/Cancel the rates of registration duties for newly established companies (e.g. first 5 years) on conventions such us company setup, capital increase or goodwill transfer

(1-3)     Reduce/Cancel the withholding taxes on ‘importation’ of services as they end up being an absolute cost for companies (WHT are very often a disadvantage to Moroccan companies) & reduce the 10 years’ period required for WHT exemption on loans with foreign currency

(1-4)     Bring more clarity around Moroccan transfer pricing provisions and the arm's length principle could encourage more companies to invest in Morocco. (More and more international companies invest in Morocco and these companies comes with centralized functions)

(2) Bring more openness and less Legal restrictions for investments: Procedures needs to be eased so Morocco becomes as attractive as other emerging or developed countries. It shouldn’t be a struggle to investors and entrepreneurs to setup their businesses, pay taxes or get hand on their business documents;

(2-1)   Ease new incorporation and registration procedures by doing it fully online including all the tax, social fillings and a reservation of a company name that could be checked instantly if unique or need to be changed

(2-2)   Encourage a paperless legal environment reducing all the bureaucratic and hurdles allowing online signatures, online access to corporate documents & tax/social/legal filling & payments

(2-3)   Introduce more enforcement measures to protect intellectual property and tackle counterfeiting and infringements. Legal procedures for companies to claim their right need to be modernized and understandable by courts (e.g. digital infringements)

(2-4)   Specify and simplify terms of articles 22 & 23 regarding administrative measures to encourage investments of the 95 charter

(3) Simplify companies’ day to day operations and other miscellaneous considerations:

(3-1) Building world class products and services requires collaborating with world class companies. Foreign payment routines should be simplified to let companies focus on their core business without risking the foreign service providers to cutoff the service due to payment delays and long procedures

(3-2) Simplify and modernize the special trainings contracts (OFPPT CSF) procedures so that companies could invest in their most important asset (human capital). (the system as it is today is heavy and represent many barriers’ for companies to submit their requests)

(3-3) Encourage innovation & R&D investments by introducing an R&D and innovation tax credit

(3-4) Establish governmental and private initiatives to put together ideas and capitals

(3-5) Simplify qualified international workforce employment