Moroccan investment: How to attain Casablanca Finance City status

Author: Gemma Varriale | Published: 23 Jul 2012
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The Moroccan Financial Board has recently launched the Casablanca Finance City (CFC), backed by the government and the King. Since January 2012 it has granted CFC status to six foreign companies, including the Boston Consulting Group and Abu Dhabi-based asset manager Invest AD.

Its aim is to take advantage of the surge of interest in Africa to attract international investors and, through the CFC initiative, encourage them to use Casablanca as a launch-pad for penetrating into Africa. The CFC would then offer international firms centralised access to North West Africa.

Indeed, located at the north western corner of Africa, Morocco is geographically positioned to form a natural gateway between North West Africa and Europe and the US. Greater North West Africa stretches down to Rwanda Burundi, taking in Chad and Libya.

Clifford Chance, Norton Rose and August Debouzy have already spotted the opportunity and established branches in Morocco.

But will Morocco succeed in establishing itself as the financial hub for investment into North West Africa? Here Hicham Zegrary reveals how the CFC is attracting foreign companies to do business from Morocco into North West Africa.

Are there any more companies in the pipeline to be granted CFC Status?

Several other companies are due to gain CFC Status at the end of June. The Moroccan Financial Board and CFC Commission don’t easily grant CFC Status. We are trying to select the good companies. We want companies applying for CFC Status to do so not only for the fiscal incentives, but to serve Africa, especially West and North-Western Africa.

How exactly do companies gain CFC Status? Are there certain criteria they have to fulfil?

Yes. Our business development department is in charge of meeting clients and doing road-shows. We meet clients in Morocco but also in other parts of the world: London, Dubai, New York, the sub-Saharan African countries.

Before the company even applies to us or fills in the application form, we need to make sure that the company is eligible, and that it fulfils certain criteria. The most important factor for us is that it serves Africa, North-West Africa and the Maghreb region. The CFC offers the opportunity of entry to this region and for us the companies that apply must do business with these countries and with this region.

For financial firms such as banks, insurance companies and hedge funds, we have said that 20% of their income must originate in this country in the first year. In the second and third years it must be 40% and then, in the fourth year, 60% of their income must originate in North-West Africa.

Once they have filled in the application form, we study it in the Moroccan Financial Board. If we decide that the company is eligible, we call a meeting of the National Commission, chaired by the Minister of Economy and Finance, who gives his opinion about whether we should give CFC Status or not.

How do you deal with the creation of a company?

It’s a big issue for us, especially since the World Bank Index revealed not only our good points, but also the difficulties of doing business in Morocco.

We have set up a regional investment centre and within this centre it is possible to carry out all the things related to the creation of the company. If a company applies for CFC Status, the process can be completed within two working days now.

We also work with recruitment companies to help companies hire people from Morocco or other countries. If a bank from England applied now for CFC Status and for the licence from the Moroccan Central Bank, it could have its incorporation in 45 days.

The CFC organised a conference on April 12 2012 on how Morocco can address justice and arbitration issues. What lessons did you learn from this?

It’s very important for us to have a friendly business environment. This is key to the success of the whole CFC project. We understand that foreign investors who aren’t familiar with our legal system and our judicial system will not be in a good position to invest their money. We know that we still need to address some issues in our judicial system, in particular the commercial tribune in Casablanca and we need to offer investors the opportunity to go to arbitration or mediation when they want.

So we organised this international conference. We had the chance to meet well- known international arbitrators such as Michael Black QC, who was one of our key speakers.

I conducted a delegation with the Ministry of Justice and we visited Singapore and Dubai and met the authorities there before the event. Morocco has a civil law system, not the common law system of English speaking countries. Our visit was a success and the international judges we spoke to found that the common law is fantastic and we can learn lessons from this system.

We are also keen to modernise our practices in the commercial tribunal or tribunal of appeal in Casablanca and use new technology. The other issue is that we should publish the decisions of our judiciary in English. The judges approved of this. We are going to address a letter to the Minister of Justice to suggest that the decisions must be published on the website of the supreme court of Morocco in French, Arabic and also in English. This would be a big help to the lawyers who represent Anglophone companies.