Setting Up a Service Company in a Morocco Free Zone: What to Know
Morocco’s free zones are not reserved for industry: a service company in a Morocco free zone can, in certain cases, set up there and benefit from the favourable tax regime. But service activities are subject to specific conditions, particular to each zone and to the tax framework. Before any project, a thorough feasibility study is therefore essential. This article reviews the applicable principles, the exclusions to be aware of, and the steps to set up a service company in an Industrial Acceleration Zone (ZAI).
Can a service company set up in a free zone?
In principle, Industrial Acceleration Zones admit industrial and commercial activities as well as certain associated services. A service company can therefore, in some cases, establish itself there. But the eligibility of a service activity is by no means automatic: it depends on specific conditions that must be examined case by case.
Specific conditions particular to services
Unlike an exporting industrial activity, whose eligibility is generally well established, service activities are assessed more finely: the exact nature of the service, its destination and the rules specific to the target zone all come into play. Each Industrial Acceleration Zone sets its own rules on permitted activities. This is why a service activity admitted in one zone is not necessarily admitted in another, and why a thorough feasibility study is necessary before committing.
Excluded activities
Whatever the case, certain activities are excluded from the ZAI tax benefits: credit institutions, insurance and reinsurance companies, as well as construction and assembly sites. A service company in the financial sector therefore cannot claim the zone’s favourable regime.
The applicable tax regime
When eligible, the service company in a free zone benefits from the same regime as other ZAI companies: full IS exemption for five years, then a corporate income tax rate that depends on the company’s situation, as well as VAT exemptions on locally acquired equipment and services and exemption from import customs duties. This framework is detailed in our guide to the tax benefits of Industrial Acceleration Zones.
Beware of the no-cumulation rule
The General Tax Code prohibits the cumulation of exemptions: a company cannot add up several favourable regimes and must opt for the most advantageous. For service-outsourcing activities (offshoring), there is moreover a specific regime distinct from that of free zones. Identifying the right regime is precisely part of the feasibility study.
Why a feasibility study is essential
For a service activity, the stakes are not only fiscal: it is about validating, upfront, that the project is genuinely eligible and viable in the target zone. A thorough feasibility study verifies the activity’s admissibility with the zone authority, identifies the most suitable tax regime, anticipates the applicable conditions and obligations, and secures the structure (legal form, location, compliance). It is the step that avoids unpleasant surprises and the subsequent challenge of the benefits. Cabinet Dami & Associés can carry out this study for your project.
The steps to set up your service company
Once feasibility is confirmed, setting up a service company in a Morocco free zone follows a structured approach: choosing the appropriate legal form (SARL, SA, branch — see our article on the legal structure in a free zone), incorporating the company and obtaining the authorisations, then setting up the accounting and filing follow-up. The general procedures are described in our guide to setting up a business in a free zone.
How Cabinet Dami & Associés supports you
Determining whether your service company is eligible for a free zone regime requires a sound knowledge of the rules specific to each zone and of the General Tax Code. Since 1991, Cabinet Dami & Associés carries out the feasibility study, validates eligibility and structures the project accordingly, in Casablanca and Tangier Free Zone, through our business setup service. To study your case, contact our experts.
The corporate income tax (IS) rate applicable after the exemption period depends on each company’s situation — in particular whether the activity is export-oriented and whether there is local turnover (a so-called “mixed” activity). Cabinet Dami carries out a tailored study to determine the regime and rate that apply to your specific case.
FAQ — Service company in a Morocco free zone
Can a service company benefit from the free zone regime?
In some cases yes, but the eligibility of service activities is subject to specific conditions assessed case by case. A thorough feasibility study is necessary before any commitment.
Which service activities are excluded?
Credit institutions, insurance and reinsurance companies are excluded from the ZAI tax benefits, as are construction and assembly sites.
Is the tax regime the same as for an industrial company?
Yes when eligible: a five-year IS exemption, then a corporate income tax rate that depends on the company’s situation, VAT and customs-duty exemptions under the conditions of the regime.
Can several favourable regimes be combined?
No. The General Tax Code prohibits the cumulation of exemptions; the company must opt for the most advantageous regime.
Conclusion
Setting up a service company in a Morocco free zone is conceivable, but the eligibility conditions are specific and must be validated by a thorough feasibility study. To assess your project and secure its implementation, talk to the experts at Cabinet Dami & Associés.
Official source: General Tax Directorate — General Tax Code, Article 6.
Further reading: company formation free zone Morocco.
Related reading : customs regime for trading in a free zone.
