Offshoring: The Advantages Morocco Will Offer
8 June 2006
Read by 2577 persons
Casashore will be the first site marketed.
Office rent at 8 euros per square meter.
Tax incentives: 0% corporate tax at the start, a low and single income tax rate, and customs duties of 2.5%.
Subsidy of 50,000 DH per person recruited and trained.
Six months after the official announcement of its launch, the Emergence program is entering its implementation phase with a comprehensive plan for one of the 7 sectors designated as part of Morocco's "global trades." Morocco's offshoring offer is now ready and will be presented to the Prime Minister on Monday, May 29.
Since the plan was publicly unveiled in December, the teams in charge of the project have worked hard to quickly build a complete offer. This is now done. The initial offer will be dedicated mainly to the Casashore site. Knowing that some elements will need to be replicated for other sites like Rabat, Tangier, and Marrakech.
The designers of the Casashore offer have gone all out to attract investors. In the package that will be unveiled this Monday and offered to domestic and foreign operators, everything has been planned to guarantee investors unparalleled competitive conditions. Thus, and overall, "tax and financial incentives, training subsidies, rental costs, and telecom costs will ensure that the operator who settles in Casashore will have costs 60 to 70% lower than what they would pay elsewhere, particularly in Europe," explains a source close to the project.
To do this, the public authorities have agreed to grant concessions, especially on the aspects most often mentioned by operators surveyed on this subject, namely rent, taxation, factor costs, and training. Thus, the cost of rent, as defined in the project, will be very low compared to the market level. It should not exceed 8 euros per square meter per month for fully serviced office spaces (internet connection, telephone, air conditioning, lighting, etc.) meeting international standards.
100,000 engineers and executives to be trained by 2015
On the tax front, Morocco's offer holds good surprises for operators. Thus, for income tax, a massive and exceptional reduction is planned, with a new feature consisting of implementing a flat rate (single rate). The first job will be entirely tax-free up to 550 euros per month, and expatriates will benefit from a special regime.
Corporate tax (IS) will also be restructured. Companies that set up in Casashore will be entitled to significant reductions, at least for the first years of their establishment. The team that put together the Casashore offer did not skimp on resources, since the corporate tax rate will be reduced to 0% for 5 years, and customs duties will hardly exceed 2.5% across all categories.
Tax advantages are not the only attraction of the offer. Indeed, investors, particularly foreign ones, interviewed during the construction of the offer, strongly emphasized another important aspect: training and the availability of qualified human resources. This is why Morocco's offer includes an entire chapter devoted to this effect. Two problems have been identified. The first is that Morocco does not train enough engineers and executives for the new jobs in offshoring. The second is the scarcity of Spanish-speaking profiles, knowing that Morocco intends, in its new strategy, to target the market of Spanish-speaking countries. Morocco's offer aims to provide an answer to these two problems. The authorities are committed to training 100,000 graduates by 2013, including 4,000 engineers and business school graduates, 2,500 developers and network managers (Bac+2 to Bac+5), and 80,000 profiles for administrative tasks (accounting, human resources, payroll, etc.). In addition to these, 8,000 Spanish-speaking graduates in the same specialties will also be trained by 2015.
How will all these people be trained? According to sources close to the project, it is not necessarily a question of initial training but also and above all of retraining and continuing education. Concretely, a young person with a DEUG in physics, for example, may only need a few months of training to be converted to one of the offshoring jobs. To achieve this, the public authorities intend to rely heavily on the OFPPT to ensure both initial and continuing education. And, a surprise for operators, they will not have to bear the training costs, which will be fully and completely covered by the Moroccan state, which apparently is determined to provide the necessary resources. Proof of this is a subsidy of approximately 50,000 DH that will be granted to companies for each person recruited and trained.
Finally, administrative aspects have also received considerable attention. A major new development at this level: the establishment of a one-stop shop at Casashore and other future sites (Tangier, Rabat, Marrakech). This all-in-one office will take charge of the operator upon arrival and handle the creation formalities. The CRIs, already experienced in this exercise, will ensure the operation of these one-stop shops.
Also in the logistics and administrative area, the designers of Morocco's offshoring offer have sought the latest in services for operators. This is "ready for output," which means, in addition to ready-to-use premises, shared administrative services (secretarial, cleaning, canteen, maintenance, etc.). Thus, Casashore (and other sites as well) companies will be entitled to a dozen so-called "business support" services, which will be provided on-site and provided by internationally renowned operators.
Casashore already in the world's top five for offshoring
It remains to be seen how international operators will receive this offer. There is reason to be reassured, as the first reports are encouraging. Even before the offer was officially announced, Casashore - and this was demonstrated by a recent internal study carried out by a French bank - is already among the top 5 offshore destinations preferred by French-speaking operators. Out of 37 cities worldwide offered to French-speaking operators interested in offshoring, Casablanca is cited as the most attractive destination in nearshore. As for offshore, Casablanca quickly made it into the top five alongside the most internationally known destinations, including three in India: Hyderabad, New Delhi, and Bombay.
Compared to its Indian competitors, Casashore, in addition to the attractive package offered to operators, will leverage two important factors: language and proximity, which are starting to become handicaps for Indian locations. The latter are, in fact, exclusively English-speaking and, above all, are located thousands of kilometers away, resulting in a time difference.
This is why Morocco's offshoring offer intends to quickly target the French-speaking and Spanish-speaking markets (for Tangier).
That said, major operators have been approached to test the package that will be offered, and the first reactions seem to support the public authorities in their choices. Proof of this: major multinationals have already taken serious options on Casashore, such as Cap Gemini and even the Indian Tata group. In fact, the idea of the Emergence plan as a whole is to focus on large multinationals to create a ripple effect.
Initially, the team in charge of implementation plans to ensure that, for each of the four offshore sites (Casablanca, Rabat, Tangier, Marrakech), three to five transactions are quickly concluded with major names. To encourage the first ones, an additional carrot is planned. It will be called the "pioneer bonus" and will consist of specific, yet undisclosed advantages, reserved for the first operators to settle.
International standard infrastructure, financial and tax incentives, training aid and subsidies... will all this convince operators to come and settle in Morocco? Apparently, the dynamic is already well underway. This is evidenced by the enthusiasm generated by Casashore even before it is operational: 40% of the site's premises are already booked by operators.
La Vie Eco
Office rent at 8 euros per square meter.
Tax incentives: 0% corporate tax at the start, a low and single income tax rate, and customs duties of 2.5%.
Subsidy of 50,000 DH per person recruited and trained.
Six months after the official announcement of its launch, the Emergence program is entering its implementation phase with a comprehensive plan for one of the 7 sectors designated as part of Morocco's "global trades." Morocco's offshoring offer is now ready and will be presented to the Prime Minister on Monday, May 29.
Since the plan was publicly unveiled in December, the teams in charge of the project have worked hard to quickly build a complete offer. This is now done. The initial offer will be dedicated mainly to the Casashore site. Knowing that some elements will need to be replicated for other sites like Rabat, Tangier, and Marrakech.
The designers of the Casashore offer have gone all out to attract investors. In the package that will be unveiled this Monday and offered to domestic and foreign operators, everything has been planned to guarantee investors unparalleled competitive conditions. Thus, and overall, "tax and financial incentives, training subsidies, rental costs, and telecom costs will ensure that the operator who settles in Casashore will have costs 60 to 70% lower than what they would pay elsewhere, particularly in Europe," explains a source close to the project.
To do this, the public authorities have agreed to grant concessions, especially on the aspects most often mentioned by operators surveyed on this subject, namely rent, taxation, factor costs, and training. Thus, the cost of rent, as defined in the project, will be very low compared to the market level. It should not exceed 8 euros per square meter per month for fully serviced office spaces (internet connection, telephone, air conditioning, lighting, etc.) meeting international standards.
100,000 engineers and executives to be trained by 2015
On the tax front, Morocco's offer holds good surprises for operators. Thus, for income tax, a massive and exceptional reduction is planned, with a new feature consisting of implementing a flat rate (single rate). The first job will be entirely tax-free up to 550 euros per month, and expatriates will benefit from a special regime.
Corporate tax (IS) will also be restructured. Companies that set up in Casashore will be entitled to significant reductions, at least for the first years of their establishment. The team that put together the Casashore offer did not skimp on resources, since the corporate tax rate will be reduced to 0% for 5 years, and customs duties will hardly exceed 2.5% across all categories.
Tax advantages are not the only attraction of the offer. Indeed, investors, particularly foreign ones, interviewed during the construction of the offer, strongly emphasized another important aspect: training and the availability of qualified human resources. This is why Morocco's offer includes an entire chapter devoted to this effect. Two problems have been identified. The first is that Morocco does not train enough engineers and executives for the new jobs in offshoring. The second is the scarcity of Spanish-speaking profiles, knowing that Morocco intends, in its new strategy, to target the market of Spanish-speaking countries. Morocco's offer aims to provide an answer to these two problems. The authorities are committed to training 100,000 graduates by 2013, including 4,000 engineers and business school graduates, 2,500 developers and network managers (Bac+2 to Bac+5), and 80,000 profiles for administrative tasks (accounting, human resources, payroll, etc.). In addition to these, 8,000 Spanish-speaking graduates in the same specialties will also be trained by 2015.
How will all these people be trained? According to sources close to the project, it is not necessarily a question of initial training but also and above all of retraining and continuing education. Concretely, a young person with a DEUG in physics, for example, may only need a few months of training to be converted to one of the offshoring jobs. To achieve this, the public authorities intend to rely heavily on the OFPPT to ensure both initial and continuing education. And, a surprise for operators, they will not have to bear the training costs, which will be fully and completely covered by the Moroccan state, which apparently is determined to provide the necessary resources. Proof of this is a subsidy of approximately 50,000 DH that will be granted to companies for each person recruited and trained.
Finally, administrative aspects have also received considerable attention. A major new development at this level: the establishment of a one-stop shop at Casashore and other future sites (Tangier, Rabat, Marrakech). This all-in-one office will take charge of the operator upon arrival and handle the creation formalities. The CRIs, already experienced in this exercise, will ensure the operation of these one-stop shops.
Also in the logistics and administrative area, the designers of Morocco's offshoring offer have sought the latest in services for operators. This is "ready for output," which means, in addition to ready-to-use premises, shared administrative services (secretarial, cleaning, canteen, maintenance, etc.). Thus, Casashore (and other sites as well) companies will be entitled to a dozen so-called "business support" services, which will be provided on-site and provided by internationally renowned operators.
Casashore already in the world's top five for offshoring
It remains to be seen how international operators will receive this offer. There is reason to be reassured, as the first reports are encouraging. Even before the offer was officially announced, Casashore - and this was demonstrated by a recent internal study carried out by a French bank - is already among the top 5 offshore destinations preferred by French-speaking operators. Out of 37 cities worldwide offered to French-speaking operators interested in offshoring, Casablanca is cited as the most attractive destination in nearshore. As for offshore, Casablanca quickly made it into the top five alongside the most internationally known destinations, including three in India: Hyderabad, New Delhi, and Bombay.
Compared to its Indian competitors, Casashore, in addition to the attractive package offered to operators, will leverage two important factors: language and proximity, which are starting to become handicaps for Indian locations. The latter are, in fact, exclusively English-speaking and, above all, are located thousands of kilometers away, resulting in a time difference.
This is why Morocco's offshoring offer intends to quickly target the French-speaking and Spanish-speaking markets (for Tangier).
That said, major operators have been approached to test the package that will be offered, and the first reactions seem to support the public authorities in their choices. Proof of this: major multinationals have already taken serious options on Casashore, such as Cap Gemini and even the Indian Tata group. In fact, the idea of the Emergence plan as a whole is to focus on large multinationals to create a ripple effect.
Initially, the team in charge of implementation plans to ensure that, for each of the four offshore sites (Casablanca, Rabat, Tangier, Marrakech), three to five transactions are quickly concluded with major names. To encourage the first ones, an additional carrot is planned. It will be called the "pioneer bonus" and will consist of specific, yet undisclosed advantages, reserved for the first operators to settle.
International standard infrastructure, financial and tax incentives, training aid and subsidies... will all this convince operators to come and settle in Morocco? Apparently, the dynamic is already well underway. This is evidenced by the enthusiasm generated by Casashore even before it is operational: 40% of the site's premises are already booked by operators.
La Vie Eco
