A Morocco Sàrl Company allows a single foreigner to form a company and become the only director for total control. Foreigners can own all of the shares in a Sàrl. The Sàrl is a private limited liability company whose shareholders can be one up to a maximum of 50.
The Moroccan Commercial Code of 1995 governs the formation, accepted activities, and dissolution of the Sàrl.
Sàrl stands for “Société à Responsabilité Limitée” which literally translates into a “Society of Limited Responsibility.
Whereas a foreign person can own 100% of the company, a local Moroccan citizen can also. A local Moroccan owner or director, however, is not required.
Background
Morocco is a North African country bordering the Mediterranean Sea and the North Atlantic Ocean. It is officially called the “Kingdom of Morocco”. Its political system is known as a “united constitutional parliamentary monarchy” with a constitution, an elected two house parliament, and a king with powers over the military, religious affairs, and foreign policy.
Capitalizing on its close proximity to Europe with low labor costs is has built a diverse, open, market-oriented economy. Morocco’s economy is based upon agriculture, apparels, textiles, tourism, and phosphates.
Benefits
A Morocco Sàrl Company provides all of these benefits:
• 100% Shares Foreign Ownership: Foreigners may own all of the shares in the Sàrl.
• Limited Liability: The Sàrl provides shareholders with liability limited to their contributions to the share capital.
• Three Year Tax Exemption: A new Sàrl pays no taxes during the first three years of existence if all income is earned outside of Morocco. However, U.S. taxpayers and all others subject to global income taxation must report all income to their governments.
• One Shareholder/One Director: The foreign sole shareholder can become the only required director for full control of the company.
• Low Capital: Currently, only a minimum share capital of $1,055 USD is required.
Morocco Sàrl Company Name
The Sàrl can never be approved if it applies using a company name either already used by another Morocco company or is too similar causing confusion. Company names may be reserved before applying to become a new Sàrl. When a proposed company name is not being used, a Negative Certificate will be issued certifying that the proposed name is available.
The company name must end with the abbreviation “Sàrl”.
Limited Liability
A shareholder is only liable up to his or her share capital contribution.
Registration
A new Sàrl become incorporated by filing an application and signing the Memorandum of Association (statutes) in the office of the Préfécture. Along with the Memorandum, the Negative Certificate is filed so the company name may appear in the Commercial Register. In addition, a local bank issues a Certificate of Funds Blocked verifying that the paid up share capital was deposited with the bank which is filed with the Préfécture.
When approved, a Certificate of Incorporation will be issued by the Préfécture.
Then the Sàrl will register with the Ministère de Finance (Tax Authority) for corporate and income tax identification numbers. Also, register with the Tribunal of Commerce to obtain social security identification numbers.
Finally, within 30 days of registration in the commercial register, notice of the new company must be published in the Official Gazette.
Shareholder
Only one shareholder is required to form a new Sàrl. The shareholder can reside anywhere in the world and be a national of any country.
Shares can be freely transferred by assignment between spouses and parents or by inheritance. However, they cannot be transferred to third parties unless the majority of the shareholders consent.
Shares must be paid up by at least one quarter of their cash value. Share Certificates will be issued for the shareholders.
Director
The law requires at least one director to manage the Sàrl. The sole shareholder can become the only director in order to exert total control.
Managers are jointly and severally liable to third parties. Their civil liability can result from one of the following
• Infringement of legal and regulatory provisions;
• Violation of the company’s statutes (bylaws); and
• Mismanagement.
Criminal liability may result from embezzlement and theft of company funds and property.
Registered Office and Agent
Every Sàrl must have a registered office address in Morocco. In addition, a local registered agent must be appointed to accept legal notices. The registered agent’s office may be used as the Sàrl’s registered office.
Minimum Share Capital
The authorized share capital cannot be less than 10,000 MAD (10,000 Moroccan Dirham as of August, 2017 amounts to $1,055 USD). The total amount must be paid up before applying to become a Sàrl.
The minimum required nominal share value is 10 MAD (currently $1 USD).
Accounting
Sàrl’s are not required to file annual financial statements or have audited accounts.
Taxes
The current corporate tax rate is 30% of the profits.
Only Income Sourced in Morocco
Morocco only taxes income earned inside its borders. Corporate taxes only apply to income earned inside Morocco.
Minimum Tax
Morocco has a minimum corporate tax called the “Cotisation Minimale” (CM). This tax applies to the higher of either 1,500 MAD or 0.5% of the yearly turnover. The CM includes turnover, donations, bonuses, subsidies, and interest income.
However, new companies receive an automatic exemption from paying the CM during their first 36 months of operations.
Conclusion
Sàrl’s not earning income inside Morocco are exempt from the 30% corporate tax. However, they are still subject to the 0.5% of the annual turnover under the CM Minimum Tax. Yet, there is a 36 month “holiday” (exemption) from paying the CM tax for new companies.
Note: U.S. taxpayers must declare all worldwide income to their IRS. Everyone else paying taxes on global income must also declare all their income to their tax agencies.
Conclusion
A Morocco Sàrl Company offers these benefits: complete ownership by foreigners, tax free over the first 3 years, limited liability, low share capital, and one shareholder who can become the sole director for better control.
