Population: 37 million

Wealth in domestic bank deposits: 132 billion USD (December 2022)

Offshore expatriated wealth: 3.7 billion USD

Main offshore banking locations: N/A

Number of individual brokerage accounts: N/A

Crypto adoption (% of population): 1.9 million (5%)

TLDR

Morocco has a diversified economy and is undertaking various reforms to encourage foreign investment. Key sectors include agriculture, tourism, renewable energy, and manufacturing. The country has averaged around 4% GDP growth annually over the past decade.

Morocco has historically maintained strict foreign exchange and investment rules. However, recent years have seen major liberalization of exchange controls and capital flows. The country is also moving to regulate cryptocurrencies in contrast to an earlier blanket ban.

The banking sector remains dominated by domestic banks but allows foreign competition. Privatization and modernization efforts aim to bring regulations closer to global standards. The Casablanca Stock Exchange provides opportunities for portfolio investment.

Exchange controls

Morocco enforces exchange controls regulated by the Foreign Exchange Office to monitor capital flows. Importers can freely make payments abroad once goods have entered Morocco. Banks are authorized to carry out most routine cross-border transactions.

Prepayment for imports is permitted up to 30% of the invoice, with some exceptions. Moroccan banks can issue guarantees to foreign suppliers. The Moroccan dirham trades in a narrow band against a euro/dollar basket. Repatriation of invested capital and profits is guaranteed for foreign investors.

The banking sector remains dominated by domestic institutions but has seen increased competition. Ongoing modernization aims to bring practices closer to global standards.

Distribution rules for foreign investment products

The sale and marketing of foreign financial products and securities in Morocco is overseen by the Foreign Exchange Office and laws governing the stock exchange and investment advisors. The Exchange Office has delegated authority to banks to freely execute most financial transactions abroad related to exports, imports, and investments.

The legal framework regulating the Casablanca Stock Exchange (CSE) is provided by Law No. 19-14. This law establishes two markets – one for large firms and one with flexible rules for smaller companies. The Moroccan Authority of Capital Markets (AMMC) has oversight of stock exchange companies and professionals. Investment advisers must obtain AMMC approval before operating.

For non-resident investors, Morocco offers a convertibility regime allowing free transfer abroad of dividends, interest, sale proceeds, and other investment returns. To qualify, the investment must be made in foreign currency and properly registered with authorities. Required documents include proof of foreign currency transactions and submission of a foreign investment dossier.

Non-residents can also open “convertible term accounts” in Moroccan dirhams to receive local funds. These provide the right to transfer the funds out of the country over 4 years. If sale proceeds are in dirhams, banks may convert and make available immediately for residents. For non-residents, banks may place in a convertible term account.

Overall, foreign investors are granted significant flexibility provided they meet criteria like foreign nationality or residence, foreign currency financing, and formal registration. This aims to facilitate foreign direct investment.

Cryptocurrency regulation

Morocco imposed a blanket ban on trading and holding cryptocurrencies in 2017, citing risks like volatility, money laundering, and terror financing. However, crypto adoption continued growing rapidly. By 2022, an estimated 1.5 million Moroccans held cryptocurrencies.

In a major policy shift, the central bank (Bank Al-Maghrib or BAM) has prepared a draft law to regulate cryptocurrencies. The objectives are to protect consumers while enabling innovation.

The draft law provides a formal definition of cryptocurrencies adapted to the local context. It outlines specifics for the use of virtual currencies in Morocco. The central bank governor has stated that various chapters are complete and discussions are underway with other regulators.

The announcement has received a mixed public reaction. Some crypto enthusiasts welcome regulation to enable safer transactions. Others worry about loss of anonymity. But most agree regulation could provide clearer rules.