Guide to Funds Repatriation Guarantee for Foreigners Investing in Moroccan Real Estate

Investing in Moroccan real estate, particularly in vibrant cities like Marrakesh, Casablanca, or Tangier, is increasingly appealing for foreigners due to affordable prices, cultural richness, and a thriving property market. However, understanding the Moroccan foreign exchange regulations, managed by the Office des Changes, is crucial for seamless fund transfers and securing the funds repatriation guarantee. This guide outlines the key procedures, requirements, and considerations for foreigners, focusing on fund transfers, repatriation, and the funds repatriation guarantee.

Understanding the Office des Changes and Its Role

The Office des Changes is Morocco’s authority responsible for regulating foreign exchange transactions, ensuring economic stability, and controlling capital outflows. For foreigners investing in real estate, compliance with its regulations is essential to facilitate both the initial investment and the funds repatriation guarantee upon selling the property. The Office des Changes oversees:

• Fund transfers for property purchases, ensuring investments comply with Moroccan law.

• Repatriation of proceeds from property sales, subject to specific conditions.

• Funds repatriation guarantee, a mechanism allowing non-residents to repatriate funds freely if certain criteria are met.

Foreigners, whether residents or non-residents, and Moroccans residing abroad (MREs) benefit from specific flexibilities under the Instruction Générale des Opérations de Change (IGOC), updated in 2024, which provides a framework for convertibility and repatriation.

Steps for Transferring Funds to Purchase Real Estate

To invest in Moroccan real estate, foreigners must follow these steps to transfer funds legally:

1. Open a Convertible Dirham Account:

   • Foreigners must open a compte en dirhams convertibles or a compte en devises (foreign currency account) with a Moroccan bank. This account facilitates transactions in foreign currencies (e.g., euros, dollars) and their conversion to dirhams for property purchases.

   • Required documents typically include a passport, proof of address, and, for some banks, a certificate of non-residency if applicable.

2. Transfer Funds in Foreign Currency:

   • Foreigners must transfer funds for the property purchase from abroad in a foreign currency (e.g., euros, USD) to the convertible dirham account. This step ensures eligibility for the funds repatriation guarantee.

     Declaring the Transfer:
     Foreigners must declare the transfer using the Formule T2, a document the bank submits to the Office des Changes to verify the legitimacy and origin of the funds.

     Notarial Registration:
     A Moroccan notary must formalize the property purchase, ensuring the transaction complies with legal and foreign exchange regulations.

     The notary confirms that the funds came in foreign currency and registers them with the Office des Changes, documenting this in the acte de vente (sale deed).

     Financing Options:

3. • Foreigners can finance up to 70% of the property value through a loan from a Moroccan bank, provided the remaining 30% is paid in foreign currency from abroad. This maintains eligibility for the funds repatriation guarantee.

   • Loans are processed through “special” accounts, and repayments can be made via convertible dirham accounts or in foreign currency.

4. Register the Investment:

   • The investment must be registered with the Office des Changes, typically through the bank handling the Formule T2. This step is crucial to document the foreign currency origin of the funds, ensuring compliance for the funds repatriation guarantee.

Funds Repatriation Guarantee: Key to Repatriation

The funds repatriation guarantee enables non-resident foreigners and MREs to repatriate the full proceeds from the sale of a Moroccan property without restrictions—if they meet the following conditions:

1. Invest in Foreign Currency: The buyer must use funds transferred from abroad in a foreign currency to purchase the property, rather than dirhams sourced locally.

2. Register with the Office des Changes: The buyer must register the investment with the Office des Changes at the time of purchase, typically by submitting the Formule T2.

• Non-Resident Status: Only non-residents (foreigners or MREs) qualify for this guarantee. Residents, including dual nationals considered Moroccan under exchange regulations, are subject to stricter controls.

If these conditions are met, the proceeds from the property sale—initial investment, loan repayments, and any capital gains—can be transferred abroad immediately after settling applicable taxes (e.g., capital gains tax).

Repatriation Without the Funds Repatriation Guarantee

If the funds repatriation guarantee does not apply (e.g., the buyer purchased the property entirely in dirhams or failed to register the investment), repatriation remains possible but under certain restrictions:

The seller must place the proceeds from the sale into a compte convertible à terme (term convertible account).

The regulations allow repatriation of only 25% of the funds per year, so full repatriation takes four years.

The seller can transfer the first 25% immediately after crediting the account. They can access each subsequent 25% tranche annually on the anniversary of the account’s initial funding.

This restriction ensures controlled capital outflows, protecting Morocco’s foreign exchange reserves.

Required Documents for Repatriation

To initiate repatriation after selling a property, foreigners must provide the following to their bank, which coordinates with the Office des Changes:

• Proof of Sale: A copy of the notarized sale deed (acte de vente) and the original purchase deed.

• Tax Clearance: Evidence of payment of all applicable taxes, such as capital gains tax.

• Investment Proof: Documentation of the original investment, including the Formule T2 and bank records showing the foreign currency transfer.

• Bank Account Details: Details of the convertible dirham or foreign currency account where sale proceeds are deposited.

• Identity and Residency Status: Passport and, if applicable, proof of non-residency.

For cases without the funds repatriation guarantee, additional documentation may be required to establish the term convertible account.

Funds Repatriation Guarantee; Key Considerations and Tips

1. Work with Professionals:

   • Engage a reputable Moroccan notary and a bank familiar with foreign exchange regulations to ensure compliance with the funds repatriation guarantee process.

   • Consider consulting a real estate agency or legal expert specializing in foreign investments, particularly in cities like Marrakesh, where foreign buyers are common.

2. Anticipate Delays:

   • Authorization processes with the Office des Changes for repatriation can take weeks. Start preparations early to avoid delays.

3. Tax Implications:

   • Double Taxation Agreements:
     Morocco maintains double taxation agreements with many countries (e.g., France), ensuring income from property sales avoids taxation twice. Retain records of all transactions for tax authorities in both countries.

     Transfer Requirements in France:
     In France, for example, transfers exceeding €50,000 demand proof of fund origin, and individuals must declare amounts over €10,000 to customs.

4. Currency Conversion Costs:

   • Be aware of bank fees for currency conversion and international transfers. Compare rates across Moroccan banks to minimize costs during repatriation.

5. Special Cases:

   • Since 2015, non-resident foreigners or MREs inheriting or selling inherited property can repatriate funds in one transaction. If the original owner was an MRE and they prove their residency status.

   • For people purchasing properties before August 1999 with dirhams, up to 5,000,000 MAD , they can repatriate them immediately.

Conclusion

Investing in Moroccan real estate offers significant opportunities, but foreigners must navigate the Office des Changes’ regulations to ensure seamless fund transfers and the funds repatriation guarantee. By transferring funds in foreign currency, registering the investment, and securing. The funds repatriation guarantee, investors can repatriate sale proceeds efficiently. Without this guarantee, repatriation is possible but spread over four years. Thorough documentation, professional guidance, and early planning are essential to comply with Moroccan regulations and safeguard your investment.

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