Offshoring: The New “Morocco Offer” Casts a Wide Net

A little more than two years after making the Green Hydrogen Morocco Offer public, it is now the turn of the Morocco Offshoring Offer to be unveiled via the circular issued by the Head of Government’s Office on Monday, November 24.

This new value proposition from the Kingdom comes at an opportune time, specifically in a global context marked by strong growth in demand for outsourced services and intensifying competition in the offshoring sector.

At the national level, new growth drivers are emerging in high-value technological services, thus offering major opportunities for businesses, particularly in terms of wealth and job creation. In short, the new circular establishes the modernization of incentive measures in favor of offshoring, validated as part of the Digital Morocco 2030 strategy.

It is important to emphasize that the performance contract was signed in September 2024 (the day of the official launch of the Digital Morocco 2030 strategy), to affirm the ambitions of public authorities and private stakeholders regarding the upscaling of this key sector for the national economy and especially for job creation.

Moreover, the circular, which clearly identifies the various implementation axes of the Morocco Offshoring Offer, gives central importance to incentive measures aimed at promoting job creation by companies in the sector, which, under the aforementioned performance contract, is expected to generate 130,000 additional stable direct jobs (including 50,000 by 2026), while achieving a turnover of 40 billion dirhams (including 25 billion dirhams in 2026).

Additionally, the Morocco Offshoring Offer detailed by the Head of Government’s recently unveiled framework defines the sectors covered by the incentive measures and establishes a new governance framework.

A Strong Emphasis on Employment and Training

With the aim of increasing the chances of achieving the performance contract’s objectives in terms of stable and qualified job creation, the circular provides for new incentive bonuses for employment and training valid until 2030.

Concretely, companies operating in offshoring activities that meet the required eligibility criteria benefit from a state contribution to training expenses. This takes the form of a training bonus of 3.5% of the annual taxable gross income for each new Moroccan national recruit, paid annually from the date of recruitment for 5 years.

Sector companies will also receive an employment bonus of 17% of the annual taxable gross income for every new stable direct job created and occupied by a new Moroccan national recruit, for a minimum consecutive duration of 18 months on a full-time basis.

The circular extends the incentives related to the capping of income tax (IR) so that it does not exceed 20% of the amount of taxable gross income per individual in the Casablanca-Rabat axis (10% in other regions). Similarly, the corporate tax (IS) benefit is extended. It takes the form of a state contribution covering up to 56% starting from the 6th year.

The Range of Sectors Concerned

The Head of Government’s circular, which defines offshoring as the relocation of certain activities or business processes to the Kingdom, given the availability of qualified human resources and competitive costs, groups offshoring activities in Morocco into five sectors (IT outsourcing -ITO-, customer relationship management -CRM-, business process outsourcing -BPO-, engineering services outsourcing -ESO-, and knowledge process outsourcing -KPO-).

In the same vein, the new framework outlines the main characteristics of integrated industrial platforms dedicated to offshoring (P2I Offshoring). Equipped with a one-stop shop and a flexible, diversified real estate offering, P2I Offshoring are spaces located near major urban centers and exclusively reserved for offshoring activities.

In short, these platforms feature significant connectivity and offer a full range of support services and infrastructure meeting the highest international standards at a competitive cost. Regarding the procedure for setting up in P2I Offshoring, the new circular establishes a processing time of 5 business days or 25 business days in cases requiring the intervention of the Offshoring Technical Committee (see box).

The new framework, which was highly anticipated by the offshoring industry, is rather inclusive, as it takes into account companies operating outside P2I Offshoring. These structures benefit from incentive measures related to job creation, including the employment bonus and the training bonus.

Moreover, in addition to these incentive measures, companies located in regions without P2I Offshoring also benefit from advantages related to income tax and corporate tax.

Two Committees to Ensure Governance

The circular from the Head of Government’s Office dedicates a significant section to the governance of the Morocco Offshoring Offer. Concretely, the state ensures steering, implementation, and monitoring-evaluation through the Steering Committee (COPIL) and the Offshoring Technical Committee (CTO). The COPIL, composed of multiple representatives from ministerial departments (Head of Government’s Office, Finance, Interior, Employment, Industry, etc.), meets at least once a year and whenever necessary.

The missions assigned to it are multiple and varied. These include, among others, defining strategic orientations, monitoring and evaluating the Morocco Offshoring Offer, making decisions regarding qualification requests for P2I Offshoring, their compliance, and any identified shortcomings. Additionally, the COPIL may include representatives from the private sector and/or other organizations whose input is deemed useful.

As for the CTO, with a less extensive composition than the COPIL, it is chaired by the Department of Digital Transition. Among its members are, notably, representatives from the DGI (General Directorate of Taxes), CNSS (National Social Security Fund), and AMDIE (Moroccan Agency for Investment Development and Exports). The main mission of this committee, which may enlist any legal or natural person whose assistance it considers useful, is to oversee and implement the Morocco Offshoring Offer.

As the true operational backbone of the new framework, the CTO has a wide range of responsibilities, including validating implementation programs for P2I Offshoring, reviewing requests related to income tax and corporate tax benefits. It also rules on applications for the employment bonus and eligibility for the training bonus.