Free zones and special regimes — industrial property in Morocco

Law 19-94 on export free zones, promulgated by Dahir 1-95-1 of 26 January 1995, is the foundational framework for the Moroccan industrial free regime. The 2020 Finance Act renamed it to Industrial Acceleration Zones (ZAI) and adjusted the post-exemption applicable IS rate.

Corporate tax — total exemption for 5 years from first operation. After this period: 15% reduced rate for companies created from 2020; transitional 8.75% for 20 years regime for pre-2020 companies (then alignment). Registration duties — exemption on land acquisition, conditional on 10-year industrial activity maintenance. VAT and customs duties — exemption on inputs related to export activity, suspensive regime. Currency exchange — free convertibility regime allowing profit and disposal proceed repatriation (consistent with Charter 03-22 art. 31). Personal income tax on salaries — special regime per zone agreement provisions. Concretely concerned zones: Tanger Med Industrial Platform (TMSA), Tanger Automotive City, Atlantic Free Zone Kenitra (MEDZ), Midparc Nouaceur (MEDZ), new Moulay Abdellah ZAI (283.9 ha approved 03/2024), and other zones designated by decree.

The CFC status targets financial, professional and holding services — NOT applicable to productive industrial real estate. Fiscal regime: Total IS exemption first 5 years. Beyond: 20% capped (excluded from 35% rate), 0.25% minimum contribution post-5 years. CFC salaries IR: 20% for max 10 years. Banks and insurance companies excluded. For an investor structuring simultaneously industrial operation (in ZAI) and holding or financial functions (at CFC), a two-vehicle architecture can be relevant — subject to economic reality conditions to avoid requalification risk.

Outside ZAI and CFC, common law applies: IS on scale (35% marginal rate for profits above MAD 100M per 2024-2026 scale), 20% VAT on majority of operations, 4% registration duties on professional land acquisition. Zones of historical Casablanca (Ain Sebaa, Sidi Bernoussi), Mohammedia, Tit Mellil, Berrechid fall under common law — unless they benefit from a case-by-case regional specific framework.

ZAI (post-2020): IS 0% for 5 years → 15%, registration exempt (10y maintenance), industrial exporter vocation. ZAI (pre-2020): IS 0% for 5 years → 8.75% for 20 years, registration exempt, industrial exporter. CFC: IS 0% for 5 years → 20% capped, common-law registration, financial services / holding. Common law: IS scale up to 35%, 4% registration, any activity outside special regime.

The applicable fiscal regime is a direct DCF input: a ZAI asset produces a sensibly higher post-tax cash-flow than a common-law equivalent, translating into market value. Three consequences for the RICS Red Book report: Specific post-IS flow modelling for ZAI — total exemption then 15%, over holding horizon. Tax-regime-adjusted cap rate — fiscal advantage reduces relative risk and can justify a lower cap rate (so higher value), at equivalent tenant and lease duration. Conditionality — fiscal advantage tied to effective exporter industrial activity. If asset transferred to a use outside ZAI framework, advantage falls and value drops. Expert must model this risk in terminal value.

• Regime correctly identified (ZAI, CFC, common law)
• ZAI activation date verified (impacts post-exemption rate)
• 10-year activity maintenance condition documented
• Registration duty exemption claim supported
• VAT/customs suspensive regime activated
• Currency convertibility regime aligned with Charter art. 31
• Cap rate adjustment for tax regime documented
• Sensitivity to regime change modelled

• ZAI status assumed without checking activity eligibility
• Common-law cap rate applied to ZAI asset (undervalues by 5-15%)
• Pre-2020 ZAI rate (8.75%) applied to post-2020 company
• CFC status confused with ZAI status (different scope)