Freelance: a person who works alone, without any other employee, and sells services. “Freelance” or “independent worker” or “autonomous worker” or “independant contractor” is a way of working, which can be done with different statuses.
So what are the different types of legal status available to freelancers in Morocco? And what are their advantages and disadvantages?
The different types of status available to freelancers in Morocco
Autoentrepreneur | Individual company | Company | |
---|---|---|---|
Residency | A valid national ID or residency card is compulsory for registration, but does not entitle the holder to official renewal. | You don't need to be a resident to register, the status entitles you to residency. | You don't need to be a resident to register, the status entitles you to residency. |
Business address | Not necessary | Compulsory | Compulsory |
Accounting requirements | Quarterly sales declaration | Detailed accounts and annual balance sheet | Detailed accounts and annual balance sheet |
Taxes | 0,05% of sales | Benefit subject to income tax | Benefit subject to corporate income tax, 15% on dividends |
VAT | No | Yes | Yes |
Cessation of activity | Deletion from the register | Deregistration (same procedure as for a company, but lighter) | Extraordinary General Assembly + closure procedure with legal publication. Possibility of mothballing the company in the event of temporary cessation of business. |
Social and fiscal responsibility | None apart from turnover declaration | On own assets | On the assets of the company, the owner's assets are protected, except in the event of fraud. |
Others | Limited to a turnover of 200,000 dirhams per year and 80,000 dirhams per customer. No possibility of import-export or regulated activity". | Possibility of taking on a salaried position. |
Autoentrepeneur
When it was launched in 2015, the autoentrepreneur status, modelled on French legislation, was intended to get Moroccans working in jobs that don’t pay much out of the informal sector.
In reality, the low tax rate has attracted many consultants and freelancers. The law is clear: in order to register, autoentrepreneurs must have a valid CNI number (Carte Nationale d’Identité for Moroccans, Carte Nationale d’Immatriculation for foreigners), and the status does not allow foreigners to renew their residency.
(As a result, an MRE living abroad can very well be an autoentrepreneur in Morocco if he or she has a CNI number).
However, practice is more flexible and, depending on the town and the year, foreigners have been able to renew their residence permit with their autoentrepreneur status. Others don’t.
What’s more, the legislator has recently created additional constraints, with significant taxation as soon as turnover exceeds 80,000 dirhams with a single customer.
So this is a solution that has the advantage of ease and low cost, but the disadvantage of limitations and a real risk.
The ” individual person” or “independent contractor”.
In French, “personne physique” or “entreprise individuelle”.
It is a individual company, without capital, but registered in the Commercial Register.
Like other companies, they are required to :
- have a business bank account, separate from the operator’s bank account
- keep detailed accounts, so that profits can be determined, and keep supporting documents for ten years.
As far as VAT is concerned, independent contractors are liable to VAT and can therefore deduct VAT on purchases.
The main disadvantage of sole proprietorship is that the entrepreneur is indefinitely liable on his own assets, particularly in the event of a tax reassessment.
The only real advantage of sole proprietorship was the absence of share capital. Since the law of June 2011, which no longer requires a minimum capital of 10,000 dirhams when setting up a limited liability company, the disadvantages have far outweighed the advantages, and this is a status that I would advise against!
The company manager
SARLs with several shareholders or SARL d'Associé Unique are the most suitable forms of company for freelancers.
They are quick to set up and operating costs are low. The managing shareholder may take on a salaried position. In practice, a SARL d’AU gives the managing shareholder the same management flexibility as an individual entrepreneur.
As in the case of a sole proprietorship, it is not not necessary to be resident in Morocco in order to set up a company there; on the contrary, the company can be used to obtain a residence permit.
No status in certain specific cases
If you already have a structure abroad, and you only invoice foreign customers from that structure, being paid from its bank account, which is still abroad, we can consider that the main centre of your economic activity is not in Morocco.
You are therefore not a Moroccan resident. If you have a residence permit, it will be as a visitor, or via family reunification. Your work is not carried out in Morocco, so you do not need status. Your situation is somewhat similar to that of a seconded employee.
However, if you are resident in Morocco, you will still have to declare your income received abroad, if necessary by invoking a double taxation treaty.
Choosing your status according to your priorities
To sum up, the criteria for choosing your freelance status should take into account your needs, the volume and type of your business (do you use subcontractors, do you buy from abroad) and the type of customers you invoice (a company will prefer to use another company so that it can have an invoice with VAT). There is no single answer, but the two best statuses are company manager or autoentrepreneur.
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