Why Legal Due Diligence in Morocco Matters Immediately for M&A

If you’re about to buy a company, enter a joint venture, or invest in Morocco, the smartest step you can take is legal due diligence. Without it, you risk hidden debts, tax problems, and employee disputes that could cost millions. 

Think of it as an X-ray of the company: it shows you the bones, the fractures, and the real structure—before you sign. 

The Moroccan Context 

• Morocco is a business-friendly hub, but it has strict laws: 
• Company law (SA, SARL, SNC) regulated by the Commercial Code. 
• Tax rules enforced by the Direction Générale des Impôts. 
• Payroll & social security compliance with CNSS. 
• Sector licenses for banking, tourism, energy, and telecom. 

For public deals, oversight comes from the AMMC (Capital Markets Authority), while private deals rely on thorough contract audits and OMPIC company filings. 

How to Do Legal Due Diligence in Morocco

Here’s the process broken into clear steps. 

1. Corporate Documents 

• RC (Registre de Commerce) extract. 
• Updated statutes. 
• Shareholder agreements. 
• Minutes of general meetings.

Why it matters: Many Moroccan SMEs fail to update statutes after share transfers. This creates disputes. 

2. Regulatory & Licensing 

• Sector-specific licenses (banking, telecom, renewable energy). 
• Environmental approvals (Law 12-03). 
• Foreign exchange approvals (Office des Changes). 

Red flag: Expired licenses are common, especially in construction and tourism. 

3. Contracts & Obligations 

• Supplier contracts. 
• Client agreements. 
• Loan contracts with banks. 
• Distribution and franchise agreements. 

Tip: In Morocco, arbitration clauses are gold. Without them, disputes drag for years in court. 

4. Tax & Payroll 

• Tax ID (IF). 
• VAT, CIT (IS), IT (IR) declarations. 
• Tax clearance certificates. 
• CNSS registration & contributions. 

Hidden risk: Companies often underreport salaries to CNSS. You inherit that liability. 

5. Litigation & Disputes 

• Commercial lawsuits. 
• Labor disputes. 
• Tax court cases. 
• Bankruptcy proceedings.

Case example: A buyer discovered a pending 10M MAD lawsuit after signing. Proper due diligence would have saved months of renegotiation. 

The Legal Due Diligence Checklist in Morocco 

• Company registration verified at OMPIC 
• Updated bylaws + shareholder agreements 
• Tax filings (VAT, IS, IR) + certificates 
• CNSS compliance and payroll records 
• Supplier & client contracts reviewed 
• Licenses and sector permits checked 
• Real estate and leases verified 
• Litigation files examined 
• IP rights (trademarks, patents) confirmed 

Common Red Flags 

• Undeclared employees. 
• Expired licenses. 
• Shareholder conflicts not recorded at OMPIC. 
• Lease contracts missing notarization. 
• Environmental non-compliance in industrial zones. 

Best Practices for Foreign Investors 

• 1. Always verify documents directly with authorities (not just what the company shows). 2. Request warranties & indemnities in the sale contract. 
• 3. Work with local bilingual advisors (French/Arabic). 
• 4. Compare payroll, tax, and CNSS data for inconsistencies. 
• 5. Use arbitration clauses for cross-border deals.

FAQs 

Is legal due diligence mandatory? 

For public deals, yes (AMMC rules). For private deals, it’s optional but essential. 

How long does it take? 

Around 4–8 weeks for SMEs, longer for listed companies. 

What’s the biggest risk? 

Tax and CNSS liabilities that transfer to the buyer. 

Do Moroccan courts accept English documents? 

No. Use French or Arabic notarized versions. 

Conclusion 

Legal due diligence in Morocco is your safety net. It uncovers risks, strengthens negotiations, and ensures compliance with Moroccan law. Whether you’re preparing for a public deal or a private acquisition, a proper checklist is the difference between a smooth transaction and a costly mistake.