CFC status: everything you need to know  

 

The CFC Status is a label giving the right to an attractive package of advantages. These advantages include Doing Business facilitations, access to a community of active members and the possibility of benefiting from relevant information on Africa. 

​

Benefiting from a unique position, CFC has all the necessary services and infrastructures to connect its members to business centers and international markets.  

​

CFC has succeeded in building a community of more than 200 member companies, a network of 15 partner financial centers and regional partnerships.

​

LEC.ma reveals some tips for obtaining CFC Status and the method to follow!

​

​

1- Casablanca Finance City: A new status 

 

The CFC Status is a label giving the right to an attractive package of advantages. These advantages include Doing Business facilitations, access to a community of active members and the possibility of benefiting from relevant information on Africa. These advantages are described in detail in the next section.

​

CFC's institutional framework is constantly being adapted to best meet the needs of members of the CFC community and thus facilitate the development of their activities in Africa.

​

​

2- Eligibility criteria:

​

Companies eligible for CFC status must meet the following criteria:

​

   1°-Be part of one of the following business categories:

​

• Financial Companies

• Non-Financial Companies

 

   2°-  Provide added value contributing to the development of the place;

​

   3°-  Have their effective headquarters at CFC;

​

   4°-  Be directed and managed from CFC;

​

   5°-  Have at least one manager residing in Morocco;

​

   6°-  Allocate a minimum of operating expenses in line with the company's activity;

​

   7°-  Have senior executives with the required qualifications and international experience:

​

• at least 3 years:for technical and administrative service providers, ancillary service providers, trading companies

• at least 1 year:for other activities

 

   8°-  Contribute to the promotion of technical and technological expertise and the development of

   place, particularly with regard to trade and financing for development in Africa.

 

For more information on the eligibility criteria, please contact one of our advisorsLEC.ma

 ​

​

3- Financial Companies: 

 

• Insurance and reinsurance companies as well as insurance and reinsurance brokerage companies;

​

• Other financial institutions carrying out one of the following activities:

​

- Collective or individual management of portfolios of financial instruments;

- Trading on own account or on behalf of third parties of financial instruments;

- Placement in all its forms;

- Services related to collaborative financing platforms;

- Financial investment advice.

 

• Investment companies and undertakings for collective investment;

​

• Other investment service providers operating in private asset management or credit rating;

​

• Holding companies whose main activity consists in holding and managing participations in the capital of companies.

​

​

4-Non-Financial Companies: 

​

4-1-Ancillary service provider :

​

Ancillary service providers operating in audit and legal, tax, strategic, actuarial or human resources consulting services, as well as any other ancillary service activity in relation to the activities carried out by companies eligible for CFC status .

​

4-2-Technical and administrative service provider:

   

Providers of technical services carried out within the framework of industrial and commercial activities and providers of administrative services.

 

These are legal persons who carry out at least one of the following activities as their main activity:

 

• The supervision and coordination of the activities carried out by the entities of the group to which the aforementioned service provider belongs on national territory or in one or more foreign countries;

​

• The direction and management of said entities;

​

• The provision of services on behalf of said entities.

 

Technical service providers may also provide services on behalf of third parties and invoice goods and services on behalf of said entities or to third parties.

 

​

Criterion relating to technical service providers and administrative service providers.

​

Technical service providers and administrative service providers must provide at least three of the following services to at least three entities of the same group or with which they are associated by virtue of commercial, technical or capital relations:

​

• the supervision and coordination of the activities carried out by the entities of the group to which the service provider belongs on national territory or in one or more foreign countries;

​

• the direction and management of these entities;

​

• the provision of services on behalf of these entities;

​

• the provision of services on behalf of third parties;

​

• invoicing of goods and services on behalf of these entities or to third parties;

​

• any other administration, management or coordination services relating to regional and international headquarters.

​

4-3-Trading company:

​

This is any legal person whose main purpose is the purchase and sale of goods on behalf of third parties and which carries out at least one of the following activities:

​

• purchase of materials or products for resale;

​

• trade-related services, including networking, logistics, storage, transit and business advice.

​

​

5- Advantages of CFC Status:

​

CFC status gives access to an attractive value proposition. This value proposition is built around three segments: Doing Business benefits, access to a community of active members, and access to information about Africa. Find the details below.

​

CFC offers business facilitation through simplified procedures:

​

Establishment of a Single Window:

​

• Accelerated administrative procedure for setting up companies in 48 hours;

​

• Taechir service to further simplify and accelerate the procedure for processing applications for work permits from foreign employees. CFC members have the possibility to submit their applications for foreign employment contracts and to withdraw them directly from CFC headquarters; 

​

• Outsourced service for legalizing signatures on foreign employment contracts.

​

Thus, members can obtain foreign employment contracts in 48 hours and residence permits in 2 weeks.

​

• Simplified procedures for “Business” visa applications (in 24 hours); 

​

• Approval application procedure for financial institutions via the establishment of a consolidated form allowing both to apply for CFC status and approval.

​

Fluidity of people  

​

Companies with “CFC Status” benefit from a simplified and accelerated procedure for the recruitment of foreign candidates.

​

This procedure consists of:

​

• The exemption of CFC companies from the production of the ANAPEC certificate certifying the absence of national candidates to occupy the position offered to the foreign candidate;

​

• The exemption of foreign candidates for the proposed position from the presentation of certified copies of their professional references;

​

• The granting of the work permit for the foreign employee recruited by the CFC company within a maximum period of 3 working days.

​

Joint note relating to the facilities for granting a "Business" visa and   residence permit within the framework of the Casablanca Financial Center (CFC)

​

​

Important Information:

​

CFC would like to remind its members that all foreign nationals residing in Morocco are obliged to apply for a residence permit in order to be in good standing vis-à-vis the local authorities. In addition, from September 1, 2019,   foreign minors must also have a circulation document that will allow them to leave Moroccan territory and return there.

Foreign employees newly recruited by member companies of the CFC community and who do not yet have registration cards now have the possibility of opening a temporary bank account in dirhams simply by submitting the foreign employment contract approved by the Ministry of Labor and professional integration. Previously, this opening of an account required the delivery to the bank of the receipt of deposit of the registration card application.

​

Capital fluidity

​

• Opening of a single foreign currency account for all transactions; 

​

• Total freedom to manage foreign currency assets; 

​

• Unrestricted fee transfer of management and technical support fees within the group ; 

​

• Extension of the business travel allowance for CFC companies.

​

Circular OC N°02/2018 relating to authorized intermediary banks

​

Fiscal advantages

​

Companies with “CFC status” benefit from the following tax advantages:

​

In terms of corporation tax (IS)

​

The company benefits from the tax result resulting from local and export turnover:

​

• Total exemption from corporate tax during the first 5 consecutive financial years from the first financial year in which the status was granted, applicable to all local or export turnover (Article 6-IB-4° of the CGI);

​

• Taxation of the entire result relating to local and export turnover at the specific rate of 15% beyond this period;

​

Effective date of the tax benefit relating to corporate income tax

​

The LF 2020 thus modified the tax regime applicable to service companies that obtain CFC status from 1 January 2020.

​

In terms of income tax (IR)

​

Employees of a CFC company have the option of choosing the tax regime that suits them:

​

• Let an IR at the specific rate of 20% ; 

​

The following items are affected by this rate:

​

- Gross salaries, emoluments and wages; 

- Allowances and benefits in cash or in kind, as a salary supplement.

​

If the employee has other income, he must also submit his global income statement (in accordance with the provisions of article 82 of the General Tax Code (CGI))

​

• Or the common law tax system.

​

Effective date of the tax benefit relating to income tax

​

Taxation at the rate of 20% is granted for a maximum period of 10 years from:

​

• the date of the decision to grant the status to the company for employees already employed before obtaining the status; 

​

• the date on which the newly recruited employee takes office

​

In terms of withholding tax (RAS)

​

A company with CFC status benefits from an exemption from withholding tax on dividends and other similar income from participation distributed to resident and non-resident beneficiaries (Article 6-IC-1° of the CGI).

 

Regarding registration fees (DE)

​

CFC companies are exempt from registration fees on business creation and capital increase deeds.

​

• Circular Note N°730 Finance Law N°70-19 for the 2020 budget year

• Finance law 2020

​

In addition, the 2020 finance law granted companies that obtained CFC status before 2020 the possibility of irrevocably opting for the new tax regime. The change of regime was therefore optional and depended on the will of each company.

 

The new law on CFC status has provided for a date beyond which the old tax regime can no longer apply. This date has been set for December 31, 2022

​

​

6- Regulatory texts:

​

Legal and regulatory framework governing Casablanca Finance City:

​

Laws:

​

• January 2021: Decree of application of the decree-law n°2-20-665

• December 2020: Finance Law 2021

• October 2020: Decree-Law No. 2-20-665 reorganizing "CASABLANCA FINANCE CITY"

• December 2019: Finance Law 2020

​

Code of ethics

​

• October 2020: CFC Code of Ethics

​

Circulars & Notes

​

• Circular OC N°02 2018 relating to CFC exchange regulations

• Joint note relating to the facilities for granting a "Business" visa and   residence permit within the framework of the Casablanca Financial Center (CFC)