A new law for raising capital from the public has arrived in Morocco, with no specific mention on how much a business can raise. This follows the unanimous adoption by Morocco’s House of Representatives of Bill 15–18 on collaborative financing “Crowdfunding”.
“This law will allow platforms to operate freely in the Moroccan market with Moroccan payment systems, thereby reducing costs and expanding the portfolio of potential projects to be funded. For startups, it is a tool for validating the project with the crowd, for communication and for fundraising, of course; and the fact that it is governed by Moroccan law widens the community of potential backers / contributors, ” said Eric Asmar, CEO Happy Smala, a Moroccan startup consulting firm.
Read also: What Does Nigeria’s New Crowdfunding Regulation Mean For Startups, In Simple Terms?
Here Is What You Need To Know
Presented in March 2018 by the Minister of the Economy and Finance, the new law is part of the efforts of authorities in Morocco to strengthen the financial inclusion of young project leaders and support economic and social development.
The bill was approved by the government council in August 2019, then presented to Parliament in December of the same year.
Following the passage of the bill into law, the next step is to publish the new law in the Official Gazette in order to allow the law to fully come into force.
Three types of crowdfunding are permitted under the new law. These are loan, equity and grant crowdfunding.
The law only regulates crowdfunding portals, and goes ahead to state that to be eligible for license to own any crowdfunding portal, the applicant must:
- Hold a minimum share capital of 300,000 dirhams ($33.5k). In Nigeria, this is $262k.
- Have themselves a prevention and risk reduction policy to identify the origin and destination of funds.
- Request additional information regarding the relevant funds.
- Check the banking prohibitions of the various actors.
All activities related to crowdfunding under the new law will be regulated by Morocco’s central Bank, Bank Al-Maghrib.
Nigeria’s Securities and Exchange Commission recently approved a new crowdfunding regulation. Under the new rules, startups are only allowed to raise a maximum of the following amounts within a 12-month period: i) The maximum amount which may be raised by a Medium enterprise shall not exceed N100Million ($260k); ii. The maximum amount which may be raised by a Small enterprise shall not exceed N70Million ($182); iii. The maximum amount which may be raised by a Micro enterprise shall not exceed N50Million ($130k).
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer
Morocco crowdfunding law Morocco crowdfunding law