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What a foreigner can't buy :

With the exception of Tunisians and Senegalese (Ifrane Convention), any other foreigner cannot acquire property for agricultural use in Morocco (notion of VNA).

Public limited companies, even those formed between Moroccans and having their registered office in Morocco, may not acquire property for agricultural use.

Only Moroccan public bodies, limited liability companies (with all members of Moroccan nationality), cooperatives or partnerships of Moroccan nationality can acquire agricultural land.

The only possibility for a foreigner to buy agricultural land is to classify it as non-agricultural land (obtaining the VNA, non-agricultural vocation). In fact, this VNA can never be obtained for irrigated land.

The VNA process (provisional at first) implies strict constraints: obtaining a derogation for a project, most often for tourism purposes, and a ban on selling the land before the project is completed. This prohibition applies both to the transfer of the land title and to the transfer of shares in a company that could be the beneficiary of the VNA and owner of the land. In addition, the state has the right to seize land with unrealized VNA.

It is also important to note that when obtaining the building permit, which sanctions the completion of the project, the investor must request confirmation of the provisional VNA. Only this confirmation will release the property from the registrations to the benefit of the State and authorise its sale.

This VNA process has been suspended for over two years.

Foreigners wishing to develop agricultural projects can sign short or long term emphyteutic leases.

The property regime in Morocco

Moroccan property law is complex due to the existence of several ancestral regimes. Therefore, we recommend that investors who are not reckless and do not want to take any risks limit themselves to properties with a land title or possibly under the requisition regime.

Guiche refers to land (and other property as well) given by the Sultans to reward the merits of their warriors. A "guiche" property always belongs to the State, can be inherited, leased, but never sold.

Land belonging to the State's private domain has a trajectory similar to the Guiche. Their owners have a right of use that can be transferred. Their sale by the State is discussed, but not yet decided. In this case, the buyer will have to ensure that the sum of the purchase of the right of use and the compensation from the State will not make the operation too expensive.

The Melquia was the rule in Morocco until the creation of the Land Registry. Adouls, sworn in by the Ministry of Justice, are still active, alongside notaries. Their deeds, based on customary law, define a property in an approximate way by unmeasured elements. They are registered at the adoul court and are valuable as they serve as the basis for the various steps towards obtaining a land title.

The requisition is an intermediate stage between the Melquia and the land title. This contradictory procedure between an owner and his neighbours allows the final fixing of property boundaries after a double consultation. The result is often different in terms of surface area than the Melquia.

The title deed or property deed is the most secure element for any purchaser. It identifies the property by a unique title number, describes the surface area and the buildings, if any, and reveals easements, mortgages and other charges. Above all, it is unassailable and purges any history that is not mentioned.

The owner of a titled property is the freeholder.

The role of the notary

The notary is the determining factor in the real estate transfer process in Morocco. He is authorised to exercise his mission as a public authority by Dahir (i.e. by royal decree) and relies on two important modern tools:

• the ANCFCC (National Agency for Land Conservation, Cadastre and Cartography) lists all titled properties and makes it possible to monitor in real time the life of all these properties: their origin, the existence of mortgages, easements or other inscriptions
• the Caisse de Dépôt et de Gestion, a state bank, into which notaries are obliged to deposit all sums received in payment for a property while awaiting the finalisation of the transaction and, above all, the registration of the property in the name of the new owner with the Land Registry. Thus, any investor is assured of taking no risk in investing in Morocco.

A transaction can be concluded in two ways:

• or a direct sale if the funds are available and the parties agree on all points, including the date of transfer of ownership.
• or with a provisional sale agreement containing all the terms of the future final deed but allowing both parties to give themselves a deadline, particularly in the case of a transfer of funds from abroad or a bank loan.

Foreign exchange regulations

Morocco still applies exchange regulations which impose apparently very complicated operating rules. Hence the reluctance of many investors, worried about not being able to recover their funds when reselling.

In fact, the transfer of funds from Morocco to any foreign country is very simple for those who respect the rules:

• Opening an account in convertible dirhams to which the currency used for the acquisition will be transferred
• Or payment of the purchase price into the notary's business account

In both cases, the bank provides proof of import of foreign currency funds. This document will be invaluable later when requesting the repatriation of the funds from the Foreign Exchange Office.

The same procedure will be applied for subsequent transfers if needed for renovations or construction after purchase of bare land.

This repatriation of funds is granted very easily after presentation of a file containing the deed of sale, the tax receipt following the payment of taxes and capital gains on real estate profits as well as the transfer slips for the funds.

The whole procedure can be completed in less than two months and the banks are now allowed to make the transfer decisions. They do so easily when the files are clear.

In the event that part or all of the investment has not been realised through the channel described above, any resident abroad may also request the repatriation of the proceeds. They will have to wait until the anniversary date of the sale and will then have 25 % of the sum, convertible into foreign currency. Repatriation will therefore take five years instead of two months.

One last point is important to note. The rate of the Moroccan Dirham is relatively stable. It has even appreciated against the Euro over the last ten years, from 1 Euro for 11.30 Moroccan Dirham to 1 Euro for 10.70 Moroccan Dirham. This profit of 6 % is rather appreciable.