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Morocco: an Assessment of Opportunities and Risks for Foreign Direct Investment

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Morocco: an Assessment of Opportunities and Risks for Foreign Direct Investment
Morocco: An Assessment of Opportunities and Risks for Foreign Direct Investment

The following paper assesses Morocco and the opportunities and risks for foreign direct investment in that country. Political and economic risks are discussed, and specific sectors which are ideal for foreign direct investment are identified.

Morocco: An Assessment of Opportunities and Risks for Foreign Direct Investment
Executive Summary The following analysis reviews Morocco as well as risks and opportunities for foreign direct investment (FDI) in the country. The report provides a political risk assessment as well as trade facts, agreements, and reform measures. Three specific sectors which are ideal for foreign direct investment are also identified. From a political and policy standpoint, Morocco is an ideal country for FDI. The government is relatively stable and supportive of the US government. Though Morocco’s legal system is also open to foreign investment, enforcement and corruption continue to be major competitive disadvantages to doing business in the country. Additionally, a complex tax system and high rates constrain business opportunities. In 2005, Morocco entered into a free trade agreement (FTA) with the United States. This FTA has dramatically reduced tariffs on consumer and industrial products. As a result, many investment opportunities have been created. Morocco has also agreed to publish current trade and investment laws, outlaw bribery, and offer intellectual property rights which parallel those received under US law. Morocco is a country with great economic potential. It is an ideal site for investors looking for inexpensive production, but tolerant of volatility. The FTA has pressured Morocco to both improve and accelerate reform measures. As a result, risks associated with FDI in Morocco have decreased substantially. As this trend continues, Morocco will develop into a center of international trade and FDI in Northern Africa.
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