I always shock people when I say that “secondment” is not recognised in Morocco. Indeed, I should say:
The secondment contract of an employee is only recognised within the framework of the social security agreement between France and Morocco and therefore only for social benefits and pensions.
What is a secondment contract?
A ѕесоnԁmеnt соntrасt is different from an expatriate contract, as you are still employed by your original company. It covers aspects other than health care:
- the applicable labour law
- the relationship between the employee and the seconding company
- the applicable tax system
- in the case of Morocco, the foreign exchange legislation, which applies to all residents, differently for Moroccans and foreigners.
The secondment contract is usually limited to a certain number of years. Beyond that, the employee automatically comes under the expatriation regime and leaves his national system.
It allows the employee, via a secondment certificate, to benefit from the health care system in his country of origin, if there is a “Convention de Sécurité Sociale” between Morocco and this country and to be reimbursed for care received in Morocco.
Apart from the social security agreement, there is no other definition of a seconded employee in Moroccan law
As secondment allows derogation from national law, from the moment it is not defined, the status does not exist. Moroccan law therefore applies in all areas.
In the framework of labour law, this means
- for foreigners, a foreigner employment contract, which must be approved by the Ministry of Labour in Rabat, with the exception of the employment contract of the manager of a SARL of AU,
- for all, the application of Moroccan labour law, except for a positive derogation for the employee, in the employment contract – which will very often be the case for an expatriation.
From a tax point of view, this means that taxation is due in Morocco, even if the salaries were paid in France by the parent company.
From an exchange control point of view, this means that “assets” abroad must be declared by residents in Morocco, and that income abroad must be taxed in Morocco (and not in the country of origin, if it has signed a tax treaty with Morocco)
However, the Office des Changes also recognises the situation of secondment, in the very specific case of a Moroccan expatriate on secondment to Morocco, in the context of salary savings.
Taxation is due in Morocco
In the case of a secondment, the mother company usually re-invoices the personnel costs to the subsidiaries.
These expenses are only deductible for the Moroccan subsidiary on one condition: being able to prove that the corresponding salary has been declared in Morocco and that related income tax has been paid.
The 10% withholding tax applied to payments for services abroad concerns corporation tax, not income tax. It does not therefore replace the payment of income tax.
How to secure a secondment to Morocco?
As this is not a classic secondment, you must sign an employment contract with the Moroccan company, which is a prerequisite for obtaining your residence card. You are therefore subject to Moroccan labour law with its advantages and disadvantages:
- even if this does not really concern you, 42 hours per week instead of 38 in average in Great-Britain
- 18 days of paid holiday per year (which increases with seniority) compared to 28 days in Great-Britain
- public holidays based on Moroccan religious and civil holidays, which do not correspond to ours: if you want to go home to celebrate Christmas or Thanksgiving with your family, it will be paid holidays
- a less favourable health care system, with much lower reimbursements than in Europe, especially for high salaries, except for US citizens who can’t believe how low medical costs are in Morocco
- lower redundancy payments
- and, above all, extremely high taxation on salaries.
All of this can of course be managed contractually, as can the children’s school fees, the cost of moving house, etc.
I am not going to go into all the details of what needs to be negotiated in your employment contract, but I will concentrate on your protection as a ѕесоnԁеԁ employee, i.e. a priori for a given period, and how to ensure your return under good conditions.
Having two contracts: with parent company and Moroccan contract
This is not a real secondment contract, as you will be paid by the Moroccan subsidiary.
However, having a contract with your home company allows you to put in place the legal protection that you benefit from under a secondment contract, in particular
- reinstatement in case of return, even after dismissal by the subsidiary and whatever the reason, with the years abroad taken into account for seniority calculations
- payment of all return costs, including administrative costs, related to your departure from Morocco, again for whatever reason
- coverage of treatment in France in the event of serious illness that cannot be treated locally (to be specified, as this may imply an “abandonment of post” in Morocco, if you have to make frequent visits)
- the determination of the applicable law in case of conflict; theoretically Moroccan law, this clause implies that a court decision in Morocco cannot be applied in the country of origin if one of the two parties objects
The particular case of unmarried couples
Morocco does not recognise civil union. If you are in a couple without a marriage certificate, you are a priori in an illegal situation in Morocco, but no one cares, as long as it concerns foreigners. On the other hand, your partner will not be able to benefit from a “family” residence permit, linked to yours.
You must therefore negotiate with your company to have it take care of his or her residence permit in another way (normally, in the case of an expatriation, the company takes steps to ensure that the whole family obtains its residence permits, on the basis of the expatriate’s employment contract).
Secondment to Morocco of a Moroccan or bi-national
This is often a very bad surprise for the person who discovers that in Morocco, he or she is only Moroccan and that this has much more important consequences than he or she could imagine.
For example, the ban on living as an unmarried couple applies.
Social security agreements do not apply, bi-nationals are specifically excluded. You will therefore theoretically not be able to benefit from the secondment certificate; even if you do, you will have to gо thrоugh аnоthеr ѕуѕtеm.
And, above all, the ban on any Moroccan having assets abroad without the express authorisation of the Office des Changes applies (and it is a criminal offence).
This authorisation must be sought by justifying the need to keep these assets. This may be due to
- the risk of losing money by liquidating an investment (blocked investments, decline in real estate, etc.)
- the need to continue to provide for part of the family that has remained abroad
- the temporary nature of the secondment to Morocco
In all cases, once authorisation has been obtained, all income from these assets must be declared in Morocco. Any taxes paid in your country of origin will be deducted, in application of the tax convention between the two countries, if it exists.
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