Rabat - Morocco’s business climate ranking increased by five places, according to the World Bank’s Doing Business 2016 report, released Wednesday.The report measures each country’s business climate for how easy it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations using a number of different criteria.
Rabat – Morocco’s business climate ranking increased by five places, according to the World Bank’s Doing Business 2016 report, released Wednesday.
The report measures each country’s business climate for how easy it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations using a number of different criteria.
Morocco’s strengths in doing business
Starting a Business: The report looks at the procedures officially required for an entrepreneur to formally operate an industrial or commercial business, as well as the time and cost to complete these procedures and the paid in minimum capital requirement.
Globally, Morocco stands at 43 in the ranking of 189 economies on ease of starting a business. Regionally, Morocco ranks ahead of Spain 82; Egypt 73; Tunisia 103 and Algeria 145.
Morocco has made starting a business easier by eliminating the need to file a declaration of business incorporation with the Ministry of Labor, the report highlighted.
Dealing with Construction Permits: This criterion assesses procedures required for a business in the construction industry to build a warehouse along with the time and cost to complete each procedure.
Globally, Morocco stands at 29 in the ranking of 189 economies on the ease of dealing with construction permits. Regionally, it ranks ahead of France 40; Tunisia 57; Spain 101 and Algeria 122.
However, Morocco has made dealing with construction permits more difficult by requiring architects to submit the building permit request online, along with supporting documents, and to follow up with a hard-copy submission. On the other hand, Morocco reduced the time required to obtain an urban certificate, the report underlined.
Paying taxes: The report evaluates taxes and mandatory contributions that a medium-size company must pay in a given year, as well as measures the administrative burden of paying taxes and contributions.
Globally, Morocco stands at 62 in the ranking of 189 economies on the ease of paying taxes. Regionally, it ranks ahead of Tunisia 81 and France 87.
On one hand, according to the report, Morocco has made paying taxes easier for companies by improving the electronic platform for filing and paying corporate income tax, VAT and labor taxes. On the other hand, Morocco has increased the rate of the social charge paid by employers.
Getting Electricity: With respect to procedures required for a local business to obtain a permanent electricity connection and supply for a standardized warehouse, as well as the time and cost to complete them, Morocco stands at 55 in the ranking of 189 economies. Regionally, it ranks before Spain 74, Egypt 144, and Algeria 130. The national public utility in Morocco has reduced the time required for getting an electricity connection by providing fee estimates more quickly.
Registering Property: Regarding procedures necessary for a business to purchase property from another business and transfer the property title to the buyer’s name, Morocco stands at 76 in the ranking of 189 economies. Regionally, it ranks ahead of France 85, Tunisia 86, and Egypt 111. Morocco has made property transfers faster by establishing electronic communication links between different tax authorities.
Trading Across Borders : Globally, Morocco stands at 102 in the ranking of 189 economies with respect to the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods.
Regionally, Morocco ranks behind Spain 1, France 1, and Tunisia 91. The report highlighted that Morocco has made trading across borders easier by reducing the number of export documents required.
Enforcing Contracts: Globally, Morocco stands at 59 in the ranking of 189 economies with respect to the time and cost for resolving a standardized commercial dispute through a local first-instance court. Regionally, Morocco is at number 1 in North Africa.
Morocco’s weaknesses in doing business
Getting Credit: With respect to sharing of credit information and legal rights of borrowers and lenders for secured transactions, Morocco’s economy scores lower than its peers. Ranking 109 in the ranking of 189, Morocco came in after Spain 59, France 79 and Egypt 79.
Protecting Minority Investors: With regard to protection of minority investors from conflicts of interest and shareholders’ rights in corporate governance, Morocco stands at 105 out of 189. Despite Morocco’s strengthened investor protections allowing minority shareholders to obtain non-confidential corporate documents during trial, Morocco still ranks low compared to other, according to the report.
Resolving Insolvency: Globally, Morocco stands at 130 with respect to resolving insolvency issues. . Regionally, it ranks well behind Spain 25, Tunisia 57, Algeria 73, and Egypt 119. Resolving insolvency in Morocco takes about three and half years on average and costs 18.00% of the debtor’s estate, with the most likely outcome being that the company will be sold piecemeal.