Service Offshoring in Morocco: What You Need to Know | Upsilon Consulting

In brief: Service offshoring companies in Morocco benefit from a full Corporate Tax exemption for 5 years, followed by the standard rate (20%, or 35% if net profit ≥ 100 M MAD). They also enjoy VAT exemption on export turnover. Eligible activities include CRM, BPO, ITO, ESO, and KPO.

With over 15 years of experience advising offshoring companies on tax optimization and regulatory compliance, Upsilon Consulting’s chartered accountants provide authoritative guidance on setting up in Morocco.

Service Offshoring in Morocco: Updated with the provisions of the 2026 Finance Act

Service offshoring, or the outsourcing of services, has become a key strategy in today’s globalized world. Morocco, with its unique advantages, positions itself as a preferred hub for service offshoring. Indeed, Morocco offers a favorable framework for international businesses.

This North African country, with easy access to European and African markets, provides an attractive business environment, particularly for companies interested in setting up offshore entities.

The tax advantages offered by Morocco, such as tax exemptions and reduced rates, play a key role in this attractiveness.

In addition to tax incentives, Morocco offers a skilled and multilingual workforce, modern infrastructure, and a regulatory environment conducive to the development of service outsourcing activities.

This article explores the mechanisms and benefits of creating an offshore company in Morocco, with a particular focus on the significant tax advantages offered by the country. These advantages, combined with a skilled workforce and a strategic geographic location, make Morocco attractive for companies seeking to outsource their services.

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Service Offshoring in Morocco

The service offshoring sector in Morocco is experiencing significant growth. This sector attracts an increasing number of foreign companies looking to invest in outsourcing their services.

Morocco offers attractive tax advantages for companies that invest in the service offshoring sector. These companies benefit from:

1. A full exemption from Corporate Tax for the first five (5) years of activity;
2. The standard Corporate Tax rate (20%, or 35% if net profit ≥ 100 M MAD) after this period;
3. An exemption from VAT on export turnover earned in foreign currency;

These tax advantages, along with the other benefits presented in this article, make Morocco an increasingly popular destination.

Every year hundreds of companies (particularly French ones) set up in Morocco. The most popular sectors are:

1. Call centers
2. IT development
3. Communication and social media management agencies
4. Insurance brokers

Morocco positions itself as a competitive and attractive destination for service offshoring. Companies with Casablanca Finance City (CFC) status also benefit from complementary tax advantages.

Service Offshoring in Morocco: Key Strengths

Morocco offers several advantages for service outsourcing, including:

1. First, its strategic geographic location;
2. Second, its cultural and linguistic assets;
3. Third, the availability and quality of its human resources;
4. Fourth, the quality and competitive cost of its hosting and telecommunications infrastructure;
5. Finally, the continuous improvement of its business environment, increasingly aligned with international standards.

Nevertheless, one of the major assets for offshoring companies remains the attractive tax regime.

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Service Offshoring in Morocco: Tax Regime

Service offshoring companies in Morocco benefit from an advantageous tax regime. This special regime continues to attract foreign companies to set up in Morocco.

Under the provisions of Article 6 of the General Tax Code (CGI), companies operating in the service offshoring sector (service outsourcing) benefit from:

1. First, a full exemption from Corporate Tax for 5 years;
2. Second, the standard tax rate thereafter (20%, or 35% if net profit ≥ 100 M MAD)

In addition, the State offers considerable advantages in terms of VAT exemption (with the right to deduction). Furthermore, special regimes for social security contribution exemptions for employees are available for newly established companies.

This article covers the service offshoring regime in Morocco, the conditions for obtaining the exemption, and the various assets of Morocco as a destination.

What is Service Offshoring (Service Outsourcing)?

Outsourcing, also known as “offshoring,” shares many similarities with subcontracting. In both cases, a company entrusts a specialized external provider with carrying out part of its operations. However, offshoring is distinguished by the fact that it involves relocating certain activities to a foreign country.

This process involves relocating part or all of the production process to another country, such as Morocco in this example. The main objectives are to reimport the services produced back to the country of origin and to benefit from reduced service costs through companies established in the host country.

In 2012, Morocco was recognized as the most favorable destination for offshoring by the European Outsourcing Association (EOA).

To attract more service offshoring activities, Morocco has implemented incentive policies, particularly in terms of:

• Training and competitiveness improvement
• Integrated industrial platforms specially designed for offshoring activities, known as P2I Offshoring.

Tax Incentive Measures for Service Offshoring in Morocco (Service Outsourcing)

Corporate Tax

As highlighted above, companies operating in the service offshoring sector benefit from:

• A full exemption from Corporate Tax for a period of 5 years;
• The standard rate (20%, or 35% if net profit ≥ 100 M MAD) beyond the exemption period.

This measure benefits both companies operating within and outside the dedicated P2I zones. The conditions for benefiting from this exemption relate to:

• First, the nature of the activity;
• Second, the actual conduct of the activity (the company must genuinely operate in Morocco and have employees there).

Example: A customer relations center serving foreign clients with call operators in Morocco, an IT development center, etc.

The activities eligible for the specific tax regime are companies operating in offshoring activities.

These activities are divided, under Circular 5/2016, into five categories:

• CRM (Customer Relationship Management): Customer relationship management
• BPO (Business Process Outsourcing): Outsourcing of business processes
• ITO (Information Technology Outsourcing): Outsourcing of IT-related processes
• ESO (Engineering Service Outsourcing): Outsourcing of engineering and R&D activities.
• KPO (Knowledge Process Outsourcing): Outsourcing of strategic business activities with a “knowledge” content requiring expertise and specific skills.

Reminder: Corporate Tax in Morocco is a tax that applies to the profits earned by companies. It applies notably to LLCs and PLCs. It is a tax based on a self-assessment basis.

Corporate Tax is based on the taxable profit, which corresponds to the difference between revenue (income) and deductible expenses (costs related to operations).

Value Added Tax

In Morocco, Value Added Tax is an indirect ad valorem tax that applies to all sales of goods and services.

However, for services used abroad (particularly service offshoring), this tax does not apply. It benefits from an exemption with the right to deduction on VAT charged on purchases.

Companies operating in the service outsourcing sector can benefit from a VAT credit refund.

Generally, when a company is exempt with the right to deduction, it is entitled to request a VAT credit refund. A refund file containing, among other things, supporting documents for the exempt turnover and proof of tax paid to suppliers must be submitted.

In addition, newly established companies are entitled to request the acquisition of their investment goods exempt from VAT. This request is subject to certain formalities.

Exporters as well as companies operating in service outsourcing (offshoring) can request the purchase of their activity inputs exempt from VAT (subject to formalities).

Taxation of Distributed Dividends

When a company established in Morocco distributes dividends to a Moroccan or foreign shareholder, it is subject to withholding tax at source.

Read: Withholding Tax Rates in Morocco

However, the provisions of tax treaties apply and may lead to a reduction of this rate.

The 2025 Finance Act maintained the progressive reduction of this rate. Indeed, the withholding tax rate will be reduced to 10%. This reduction will be applied progressively, and the 10% rate will be effective from 2026.

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Integrated Industrial and Service Platforms for Offshoring

The Integrated Industrial Platform for service offshoring (P2I Offshoring) is a dedicated space with the following characteristics:

• First, they are exclusively reserved for service offshoring activities;

• Second, they are located near major urban centers;

• Third, they include a flexible and diversified real estate offering;

• Fourth, they offer a single administrative window;

• Finally, they have a comprehensive range of support services and infrastructure:

  Meeting the highest international standards

• At a competitive cost, meeting the needs of investors and their employees.

Applications for establishment in the P2I offshoring zones must be submitted to the P2I offshoring managers. The application must be accompanied by a complete file relating to the planned investment program.

Companies eligible for establishment in the P2I zones are companies operating in offshoring activities (specified above).

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Other Tax and Social Security Incentives

Companies that set up in Morocco can benefit from several tax and social advantages, including:

Training Program

The National Agency for the Promotion of Employment and Skills (ANAPEC) has established a training financing program. Companies can set up a multidimensional training program and benefit from partial funding (up to 70%).

Training Assistance Scheme

Companies established in the P2I offshoring zones benefit from a contribution to the hiring training and ongoing training costs of each new recruit for a period of 3 years.

Integration Contract

The training-integration internship contract offers the following incentive measures:

• Exemption of up to 6,000 MAD per month from CNSS contributions, professional training tax, and Income Tax for a maximum internship period of twenty-four months, non-renewable.
• State coverage, for the benefit of interns, of employer and employee contributions due to CNSS for mandatory basic health insurance.
• State coverage, for a period of 12 months, of the employer’s share of social security coverage and professional training tax when contract beneficiaries are hired on a standard employment contract.

Professional Integration Contract

The professional integration contract provides for a bonus of 25,000 MAD for companies hiring university graduates on a permanent contract. Recruitment must take place following a training-integration internship of 6 to 9 months within the framework of the integration contract scheme.

”TAHFIZ” Program

The “TAHFIZ” program grants, within the limit of 10 (ten) employees and for a period of 24 months, the following advantages:

• First, exemption from Income Tax on the gross monthly salary capped at 10,000 MAD

• Second, State coverage of the employer’s share for:

  CNSS contributions

• Professional training tax.

For more information, Contact Upsilon Consulting to discuss your offshoring project.

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Frequently Asked Questions

What tax benefits do offshoring companies get in Morocco?

Service offshoring companies in Morocco benefit from a full Corporate Tax exemption for the first five years of activity, followed by the standard rate (20%, or 35% if net profit ≥ 100 M MAD). They also enjoy VAT exemption with the right to deduction on export turnover earned in foreign currency, and may request VAT credit refunds on their purchases.

What types of services can be offshored to Morocco?

Morocco supports five main categories of offshoring activities: CRM (Customer Relationship Management), BPO (Business Process Outsourcing), ITO (Information Technology Outsourcing), ESO (Engineering Service Outsourcing), and KPO (Knowledge Process Outsourcing). The most popular sectors include call centers, IT development, communication agencies, and insurance brokerage.

What are the conditions to benefit from the offshoring tax exemption?

The exemption requires that the company genuinely operates in an offshoring activity in Morocco with actual employees on-site. The nature of the activity must fall within one of the recognized offshoring categories defined by Circular 5/2016. These benefits apply to companies operating both within and outside the dedicated P2I offshoring zones.

What is a P2I Offshoring zone in Morocco?

Integrated Industrial Platforms for Offshoring (P2I) are dedicated spaces located near major urban centers, exclusively reserved for service offshoring activities. They offer flexible real estate, a single administrative window, comprehensive support services and infrastructure meeting international standards at competitive costs. Companies must submit applications with a complete investment program to establish in these zones.

What Corporate Tax rate applies after the 5-year exemption? Find out instantly with our free Corporate Tax Calculator — covers standard, reduced and offshoring regimes.

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