Casablanca Finance City (CFC) or Free Zone: Which Regime to Choose?
Two attractiveness regimes coexist in Morocco for different investor profiles: the Casablanca Finance City (CFC) status and the free zone (Industrial Acceleration Zone, ZAI). Both offer favourable taxation, but they target neither the same activities nor the same establishment logic. This comparison helps you choose between CFC and a free zone depending on your project.
Two schemes, two purposes
The free zone (ZAI) is a territorial scheme: the company physically establishes within a zone’s perimeter and orients its activity towards industry, trade or certain services, in an export logic. The CFC status is an activity label aimed at financial companies, services and holdings with a regional or international vocation, located in Casablanca.
Tax comparison: CFC vs free zone
On IS, both regimes converge to the same rate after the exemption period, but access conditions differ.
| Criterion | Free zone (ZAI) | CFC status |
|---|---|---|
| IS — first 5 years | Full exemption | Full exemption |
| IS — thereafter | 20% (permanent reduced rate) | 20% flat |
| Targeted activities | Industry, trade, eligible services (export) | Finance, services, holdings (regional/international vocation) |
| Location | Within a zone’s perimeter | In Casablanca (CFC spaces) |
| Access | Activity eligibility via the zone | Accreditation by a committee (expected impact) |
The CFC status also carries its own advantages (a 20% flat income-tax option for certain employees, exemption from withholding tax on dividends paid to non-residents, exemption from the minimum contribution for the first 5 years). The detail of IS and the exemption is in our articles on the ZAI tax benefits and the end of the IS exemption.
How to choose?
The choice depends above all on the nature of the activity: an exporting industrial or commercial activity naturally leans towards a free zone; a financial activity, regional-vocation services or an international holding rather falls under the CFC status. Location (zone vs Casablanca) and access conditions (zone eligibility vs accreditation) then come into play. For neighbouring trade-offs, see also our comparison of free zone vs standard company.
How Cabinet Dami & Associés supports you
Arbitrating between CFC and a free zone requires analysing the activity, the target market and the structure. Since 1991, Cabinet Dami & Associés advises directors and investors on these choices and secures implementation. To study your case, contact our experts.
FAQ — CFC vs free zone
Is the IS rate the same?
After five years of exemption, both regimes apply a 20% rate. The differences concern the targeted activities, the location and the access conditions.
Can an industrial activity benefit from CFC?
The CFC status targets financial activities, services and holdings with a regional/international vocation. An exporting industrial activity rather falls under a free zone.
How is CFC status obtained?
Through an accreditation granted after assessment of sectoral eligibility and expected impact, then effective establishment in Casablanca.
Conclusion
Between CFC and a free zone, it is not the IS rate that decides (20% in both cases after the exemption) but the nature of the activity and the establishment logic. For a suitable choice, talk to the experts at Cabinet Dami & Associés.
Official source: General Tax Directorate — General Tax Code.
