Openness to Foreign Investment
The Moroccan government actively encourages foreign investment and has made a number of regulatory changes designed to improve the investment climate in recent years. Morocco welcomes foreign participation in its privatization program, and does not pre-screen or select foreign investment projects.

The October 1995 investment code applies equally to foreign and Moroccan investors, with the exception of foreign exchange provisions, which favor foreign investors. The Ministry of Economy and Finance has created an investment promotion office and the Moroccan government, in compliance with the investment code, is studying measures to reduce the paperwork associated with investment.

The investment code also codifies the existing foreign exchange regulations providing essentially free repatriation of foreign exchange related to foreign investment. The code does not apply to agriculture. Foreign investment is now permitted in all sectors except agricultural land. Other sectors such as phosphate mining and tobacco marketing are reserved for the state and are closed to foreign and domestic investment, although the government is considering plans to offer a concession on tobacco marketing.

Conversion and Transfer Policies
The Moroccan Dirham is convertible for all current transactions and for some capital transactions, notably capital repatriation by foreign investors if the original investment is registered with the foreign exchange office. Foreign exchange regulations now allow expatriate employees to repatriate 100% of their salaries.

Foreign exchange is routinely available through the commercial banks on presentation of documents for the repatriation of dividends and capital by foreign investors, for remittances by foreign residents, and for payments for foreign technical assistance, royalties and licenses. No prior government approval is required.

The Central Bank sets the exchange rate for the dirham against a basket of currencies of its principal trading partners. The rate against the basket has been steady since nine-percent devaluation in May 1990, with changes in the rates of individual currencies reflecting changes in cross rates. According to IMF and World Bank reports, the dirham has appreciated in real terms by 18 percent since 1990.

In early 1996 the government promulgated regulations aimed at allowing the creation of an interbank market for foreign exchange, including foreign exchange futures contracts.

Performance Requirements/ Incentives
There are no foreign investor performance requirements or requirements regarding local value added, local equity, substitution of imports or employment of Moroccan workers. Incentives for foreign investors have been created under the Free Trade Zone laws.

Right to Private Ownership and Establishment
Private ownership is permitted in all but a few sectors that are specifically reserved for the state including phosphate mining. Apart from these few exceptions, private entities may freely establish, acquire, and dispose of interests in business enterprises.

Morocco's privatization program allows the government to divest itself of state-owned entities. A May 1999 law allows the government to sell fourteen companies and six hotels via tender, direct negotiation or the stock exchange. Other state-owned enterprises can also opt for privatization using the same legal framework outlined in the May 1999 law. In the last seven years, the government sold 35 firms and 23 hotels, raising more than $1.7 billion. The government welcomes foreign participation in the privatization program.

Protection of Property Rights
Secured interests in property are recognized and enforced through the "Administration de la Conservation Fonciere." The GOM has recently passed a law permitting the development of a secondary mortgage market.

Morocco has a relatively complete regulatory and legislative system for the protection of intellectual property. It is a member of the World Intellectual Property Organization (WIPO) and is a party to the Bern Copyright, Paris Industrial Property, and Universal Copyright Conventions; the Brussels Satellite Convention; and the Madrid, Nice, and Hague Agreements for the Protection of Intellectual Property.

Transparency of the Regulatory System
Morocco's economic reform program has included improvements in the regulatory environment. In particular, the liberalization of the foreign exchange allocation system, the import regime, and the financial sector have reduced the government's role in the economy.