- Full freedom to manage foreign currencies assets falling under specific categories and all assets from foreign sources;
- Relaxation of foreign investment conditions for financial institutions with the CFC status;
- Freedom to open foreign currency and convertible dirhams accounts;
- Foreign currency and convertible dirhams accounts opened in the name of CFC companies in respect of export of services may be credited up to 100% of export revenues (vs 70% in common law);
- Full freedom to manage export revenues;
- Exemption from declaration and domiciliation formalities for ongoing technical assistance contracts;
- Exemption from the Foreign Exchange Office authorization for carrying out transfers in foreign currencies in respect of subsidiaries’ share of costs incurred by their parent company, expenses related to services shared between subsidiaries and parents companies, and fees invoiced by the parent company for provision of staff.
Benefits of the CFC Status
The CFC Status, created by Law No. 44-10 as amended and completed by Law 68-12, is a label giving access to an attractive package of advantages. These advantages include tax incentives, foreign exchange control facilities and other benefits for doing business facilitation.
DESCRIPTION AND ELIGIBILITY
Benefits of the CFC Status
Benefits relating to the CFC Status can be grouped into three main categories:
- Service companies (financial institutions and professional services providers) and holding companies with the CFC status shall benefit, in respect of their export revenues and net capital gains from the sale of foreign securities for the financial period from:
- a total exemption from corporate tax for a period of five (5) consecutive years, starting the first year they have been granted the CFC status;
- and a reduced corporate tax rate of 8.75% beyond this period.
- Regional headquarters and representative offices of multinational companies shall benefit from a reduced rate of 10% as of the first year of obtaining the “CFC status” subject to the minimum contribution stipulated in the General Tax Code (Article 144.) The taxable base of regional or international headquarters having the “CFC status” is calculated as follows:
- The higher of (i) taxable income and (ii) 5% of the operating expenses of the said headquarter, if the headquarter or rep office makes a profit;
- 5% of the operating expenses, if the headquarter or rep office makes a loss.
- In terms of personal income tax:: CFC companies employees can choose the most favorable personal income tax regime, that is the choice between a 20% flat tax rate for ten (10) years and the progressive scale tax.
- Exemption from registration fees on company setup and capital increase.
Exchange control facilitation
Doing business facilitation
Through accelerating and facilitating the following procedures:
- Setting up a company within 48 hours;
- Recruiting foreign employees and getting them residency cards;
- Obtaining “business” visas for applicants sponsored by or affiliated with a CFC company;
- Licensing of financial institutions, through consolidated application forms that enable financial companies which need to be licensed to apply simultaneously for the CFC Status and for the relevant license (depending on their activity) which is issued by the relevant regulatory authority (Central bank, the Capital Market Authority “CDVM”, the insurance sector regulator “DAPS”, …)