What is the interest of creating a branch in Morocco?
What are the characteristics of a branch?
How to create a branch of a foreign company in Morocco?
What is the legal status of a branch?
What is the tax status of a branch?
A branch: what interest?
The branch is a different establishment from a subsidiary, it is an establishment that can have management and direction autonomy without having legal personality.
The objective behind the creation of a branch, in particular in a different city, region or country, is to facilitate the development of the company and its activities, thanks to:
Improving proximity to local customers;
Access to specific markets;
The branch does not have separate legal personality. Indeed, his personality is a direct emanation from society. It is legally the same legal entity.
What are the characteristics of a branch?
A branch is characterized by several elements:
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Existence of a distinct personality: The branch contracts and acts in the name and on behalf of its company without distinction between their personalities.
Autonomy and management: The branch is financially dependent on the company. Their funds are totally confused.
Taxation in Morocco: the branch is subject to corporate tax (for the share of profits made in Morocco).
Accounting and tax obligations: If it is a branch of a foreign company, it is subject to traditional tax obligations like any Moroccan company (bookkeeping, tax declarations, etc.).
How to create a branch of a foreign company in Morocco?
The steps for creating a branch are as follows:
Request for a negative certificate with the name of the branch in Morocco, the submission of the request is made at the level of the OMPIC
Establish minutes of the management bodies of the company deciding on the creation of the branch. This report must mention the denomination, its headquarters and its legal representative in Morocco.
Provide a tax domiciliation address in Morocco.
Register the minutes of the creation of the branch with the tax authorities.
Submit to the court clerk's office.
Complete the formalities of legal publicity: newspaper of legal announcements and official bulletin.
Opening of a bank account as well as registration with the foreign exchange office.
The documents required to create a branch of a foreign company in Morocco are:
Certified copies of the statutes of the parent company in French (or translated into French by a sworn translator).
The extract from the parent company's trade register stamped and signed by the issuing authority.
Copy of the passports of the legal representative(s) of the parent company
Copy of the passports of the manager(s) of the branch in Morocco
A copy of the power of attorney to the person in charge of the formalities.
What is the legal status of a branch?
The branch has no legal personality of its own. In all cases, his assets are attached to those of the company. All the assets and profits at its disposal revert directly to the company, which can dispose of them as it sees fit.
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What is the tax status of the branch?
Two cases need to be distinguished:
A. Branch of a Moroccan company
The branch of a Moroccan company is taxed within the framework of the Moroccan company. It does not have a separate tax personality. Its income and profits are an integral part of the company which is subject to the common law tax system in Morocco.
B. Branch of a foreign company
In this case, the company being non-resident, the branch obtains in fact a separate tax personality. Thus, it is taxed separately on the basis of its activity carried out in Morocco.
In terms of the tax system, a branch is subject to corporation tax under the terms of common law and to Value Added Tax under common law as well.