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What a foreigner can't buy:

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

Joint stock companies, even those formed between Moroccans and having their headquarters in Morocco, cannot 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 way for a foreigner to purchase 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 waiver for a project, most often for tourism purposes, and a ban on transferring 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 is entitled to seize land with unrealized VNA.

It is also important to note that when obtaining a permit to live in the property, 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 will authorize 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 to investors who are not reckless and do not want to take any risk to limit themselves to properties with a land title or possibly under the regime of requisition.

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.

The land belonging to the State's private domain has a trajectory close to the Guiche. Their owners have a right of use that can be transferred. Their sale by the State is discussed, but not yet finalized. In this case, the buyer will have to make sure 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. The adouls, sworn by the Ministry of Justice, are still active, alongside the notaries. Their deeds, based on customary law, define a property in an approximate way by unmeasured elements. They are registered at the adouls' court and are invaluable because 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 for the definitive 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 reassuring element for any buyer. It identifies the property by a unique title number, describes the surface area and the buildings if any, 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 process of real estate transmission in Morocco. He is authorized to exercise his mission of public authority by Dahir (thus by royal decree) and relies on two important modern tools:

• the ANCFCC (National Agency of Land Conservation, Cadastre and Cartography) lists all titled properties and allows to follow in real time the life of all these goods: 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 finalization of the transaction and especially the registration of the property in the name of the new owner with the Land Registry. Thus, any investor is assured of not taking any risk by investing in Morocco.

A transaction can be concluded in two ways:

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

Exchange regulations

Morocco still applies foreign exchange regulations which impose seemingly complicated operating rules. Hence the reluctance of many investors, worried about not being able to recover their funds upon resale.

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

• Opening of an account in convertible dirhams on which the currencies 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 funds in foreign currency. This document will be invaluable later when applying for the repatriation of the funds to the Office des Changes.

The same procedure will be applied for subsequent transfers if needed for renovations or construction after the 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 of funds.

The entire 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 realized through the channel described above, any resident abroad may also request the repatriation of the proceeds of the sale. He/she 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 exchange rate of the Moroccan Dirham is relatively stable. It has even appreciated against the Euro over the past ten years, going from 1 Euro for 11.30 Moroccan Dirham to 1 Euro for 10.70 Moroccan Dirham. This profit of 6 % is quite appreciable.