Rabat – Doing business in Morocco as a startup has never been easier according to local entrepreneurs.
Morocco has hosted international startup summits, accelerators, even Africa’s first Plug and Play office. As such, it comes as no surprise that even the likes of CNN have covered the country’s bustling ecosystem.
Morocco has a long history of a startup culture that preceded recent reforms and digitization efforts. Yet these new initiatives will likely serve as catalysts to help Morocco’s young entrepreneurs to take advantage of their environment.
The self-described “Startup Evangelist,” founder of a variety of successful Moroccan startups, Mehdi Alaoui, told Morocco World News that he has been involved with startups since 2001. He has been competing, searching for funding, and investing in the sector for approximately 20 years.
While Morocco’s startup roots traced back a couple of decades, possibly even more. But more broadly, Morocco’s population and the media began paying attention to the topic in 2010, as competitions, accelerators, initiatives, and general government interest in startups emerged.
Morocco, like many countries undergoing development, is currently experiencing a transitional phase between the paper era and the digital age, a digital transformation that is likely to serve young tech-savvy entrepreneurs well.
“Now is a golden time to leapfrog many of the outdated business practices that have been around for decades,” according to Yasmina Benchekroun, managing director at the Moroccan branch of Abergower who spoke to MWN in 2020. “The Moroccan government is committed to technological development, and the young and vibrant workforce is tech-savvy,” she emphasized, adding that “it is an ideal time to seize the opportunity,”
Morocco World News reached out to several entrepreneurs to better understand the situation “on the ground,” in order to discover how easy, or difficult, it is to launch a startup in Morocco.
Ease of use
A developing startup ecosystem needs a favorable environment. Now, what is a favorable environment if not one that allows for less bureaucracy, easy registration, and less stress for potential business owners?
One young foreign entrepreneur, who preferred to remain anonymous, shared her experience of setting up a venture in Morocco. While she did not necessarily set up a business or a company in a traditional sense, she registered for self-employment, also known as an auto-entrepreneur.
“However, by doing so, I got a company identification number,” she explained, and, “as far as I know, the auto-entrepreneur status was created for freelancers who earn less than 200,000 dirhams [$22,424] a year.”
The auto-entrepreneur status is perfect for somebody just starting out. As for the process, she explained that all she had to do was “fill out some short forms online, have my pictures taken, deliver the printed forms and pictures (and a copy of my residence permit) to the nearest bank,” and finally, “receive my details (tax number, company number etc.) online within 3-4 weeks. I didn’t even have to go back to the bank.”
What surprised her the most was the accessibility of the whole process, especially the fact that “the process is the same for foreigners, and that there are no additional requirements for” those already hold a residency card, which she believes is great, as in her words, “I love paying taxes!”
Lauding Morocco’s digital reforms, she also noted the seamless “highly digitised” process for opening a business, “unlike some other administrative processes [she’s] gone through in Morocco, e.g. application for residence permit.”
For his part, Alaoui has not only reaped the benefits of Morocco’s digitization and government reforms, in his illustrious two decade career he has seen the shifts himself.
He told MWN that “It’s much easier to start a startup today comparing to 2001 or 2010,” considering that “there is many ways to get funded,” with many incubators and accelerators in the country today.
Of course, Morocco still has a long road to travel, otherwise it would be already competing with the US’ Silicon Valley or China’s Shenzhen, a city in the Guangdong province, which has grown to become a startups and design hub.
In words of Mark Zuckerberg, “An entrepreneurial culture thrives when it’s easy to try lots of new ideas,” or as Hanae Bezad, CEO of LeWagon Casablanca expands on the idea, “this ‘freedom to fail’ is waged by those who have a cushion they can fall back on if they fail.”
In an article for African Technology Foundation, Bazad explained that “Many of the startupers I know in France have managed their professional transition from the corporate world to the startup ecosystem after negotiating a rupture conventionnelle and leveraged the unemployment aids they had contributed to to be turned into a company creation capital.”
It is within this context that “The French welfare state framework proves useful to support the rise of startups,” she concluded.
Morocco has been under pressure, in the past and still today, for not providing enough security for its citizens, whether in the form of healthcare or unemployment benefits. Climbing out of poverty in Morocco is not an easy task.
According to Morocco’s Minister of Health, Khalid Ait Taleb, approximately 60% of the Moroccan population benefited from basic health coverage as of 2019, and that the Medical Assistance Plan covered more than 16.5 million people by September 2020. But that is still not enough.
Coming at an opportune time for the Moroccan government, these are the high-priority targets for the country’s reforms.
Read also: Study: Morocco Ranks Second In Africa On Digital TransformationMorocco’s Head of Government, Saad Eddine El Othmani, explained last year that “The government will ensure the rapid implementation of the generalization of social security for all Moroccans,” and, “as of January 2021, using a well thought-out plan, starting with compulsory health coverage and family allowances, then moving on to pension and unemployment benefits.”
The last piece missing, according to Alaoui, is “a Start Act to enhance the ecosystem and to facilitate more” innovation, “a couple of laws that make life easy for Startups.”
In 2018, Tunisia enacted the Tunisian Start-up Act which brought a breath of fresh air into the ecosystem. GSMA explains that the act, first, serves as a “legal framework that simplifies the start-up launching process. Second, the creation of a €200m Fund of Funds allocated to specific verticals. The third aspect is a strategy to consolidate the ecosystem and hubs in Tunisia.”
TechNext notes that as of December 2019, at least 169 of more than 279 companies which applied under the Tunisia Startup Act have been accredited with a startup label. Startups raised approximately $18.5 million (MAD 165 million) in funding by September 2020. Furthermore, Entrepreneurs of Tunisia shows that startup coworking spaces in Tunisia have grown by 61.2% — from 38% in 2018 to 62% in 2019.
Digitization and a digital government is possible in Morocco, and with the right focus the North African country could do wonders to boost its entrepreneurial ecosystem. Digitization has already borne fruit for many people, entrepreneurs, and the general population alike. All that is left is the last push.