Free zones and offshoring in Morocco: tax benefits for MRE companies

Companies established in export free zones (Tanger Free Zone, Kenitra Atlantic Free Zone, etc.) benefit from total corporate tax exemption for the first 5 years of operation, then a reduced rate of 8.75% for the following 20 years. They are also exempt from VAT on operations carried out within the zone and benefit from reduced or zero customs duties on imports of raw materials and equipment.

Casablanca Finance City is an international financial hub dedicated to financial services, regional holdings and headquarters of multinationals seeking to operate in Africa. CFC companies benefit from a reduced corporate tax rate of 15% on foreign-source income (instead of 20%), 0% withholding tax on dividends paid to non-residents, and facilitated access to foreign currency. For an MRE managing African investments, CFC is the most suitable structure.

Criteria vary by zone, but general conditions include: conducting an export activity (at least 70% of turnover from exports for most zones), having a registered office in the zone, and complying with free zone regulations. For CFC, the activity must be financial, consulting, or regional headquarters in nature. For Tanger Free Zone or Kenitra, industrial and logistics activities are prioritized. An accreditation application is submitted to each zone's management authority.

Tanger Free Zone (TFZ) has been operational since 1999 and primarily hosts manufacturing industries (textile, electronics, agri-food), with more than 900 established companies. It benefits from proximity to the Port of Tanger Med, Africa's leading port. Kenitra Atlantic Free Zone (KAFZ), created in 2016, is more specialized in the automotive industry (Renault is present there) and technology. Land is slightly cheaper there, but infrastructure is less mature than in Tanger.

Yes, employees of companies in free zones are subject to the Moroccan Labor Code, the SMIG (3,111 MAD/month in 2026) and standard CNSS contributions (21.09% employer + 6.29% employee). However, income tax on salaries of foreign employees working in free zones can benefit from a flat rate of 20% instead of the standard progressive scale, optionally and for 5 years. This provision is particularly advantageous for expatriate managers.

Yes, non-residents (including MREs) can create companies in Moroccan free zones. The initial investment can be made in foreign currency, guaranteeing the right to repatriate profits. Creation is done through the single-window offices of the zones (CFCIM, CFC authority, TFZ manager). The incorporation period ranges from 2 to 6 weeks depending on the zone. No permanent physical presence is required for the founder, but a local director is generally required.

A standard Moroccan company is subject to 20% corporate tax on profits, VAT (20% standard rate), and customs duties on imports. A free zone company benefits from 0% corporate tax for 5 years then 8.75%, VAT exemption and reduced customs duties. The tradeoff is the obligation to export predominantly (70% minimum), physical location constraints within the zone, and industrial premises rents of 30 to 80 EUR/m2/year depending on the zone.