I. Demographics of Morocco
Morocco, officially the Kingdom of Morocco, is situated on the northwestern corner of Africa. It is the 39th largest country in the world with a population of 34,377,611, as estimated on December 31st, 2015. In 2015, the natural growth was positive, and we could forecast that Morocco’s population growth will continue at around 1.05% annual rate, reaching about 36.4 million by 2020 (Worldometers, 2015). Morocco is a demographically young country with 27% of its population under the age of 15, 18% between the ages of 15 and 24, 42% between 25 and 54 years old, 7% between the ages of 55 and 64, and just 6% of its population over 65 years. This large share of young population provides great opportunities for Morocco to develop its emerging industries by using advanced technology and skills (World Population Review, 2015). While the rise of a new business has been happening in Morocco, the population living below the poverty line remains high at 12%. It means that four million out of Morocco's 33 million people live below the poverty line, and almost three million of them in rural areas. As Figure 1 shows, Morocco has the highest Gini Index, 40.9, among the North African countries. The household income of the poor people accounts for only 2.7% of the country’s wealth, while the rich people have 33.2% of the country’s wealth (Central Intelligence Agency, 2007). The distribution of wealth in Morocco is manifested through the obvious gap between the upper and lower class. The sex ratio of the total population was 0.976 (976 males per 1000 females), which means genders are distributed equally in Morocco (World Bank, 2014). However, the female-to-male ratio of wage for similar work is around 0.52 (Wrold Economic Forum, 2015). It is clear that Morocco’s workplace gender gap exists, so all businesses in Morocco should fight against gender discrimination. If women cannot be financially independent and control their own lives, Morocco will not sustain its economic development of different industries in the long run. According to the World Bank, Morocco’s urban population (% of total) was 60.2%, and rural population was 39.8% as of 2015. Over the past 50 years, more Moroccans have left the countryside for greater opportunities, which are offered by big cities. The rate of urbanization continues to grow at 2.26% per year (World Bank, 2015). The process of urbanization provides sufficient labor force and promotes a better economic development in big cities. However, we can forecast that urbanization will increase the real estate price, which means new companies will have to pay more money to rent offices in big cities, which will increase their cost of doing business in Morocco. Classical Arabic is Morocco’s official language, but the country’s distinctive Moroccan Arabic dialect is the most widely spoken language. In addition, about 10 million Moroccans, mostly in rural areas, speak Berber. However, French is the official business language. While English is rapidly growing among educated youth, local companies and wealthy individuals expect foreign businesses to provide product and service documentation in French with standard labeling requirement (Complete Morocco, 2015). Therefore, all businesses, including finance service, should provide prepared French brochures or pamphlets for business purpose. In Morocco, the primary net enrollment rate is 98%, and the primary completion rate is 99%. Both of these indicate that Morocco has achieved universal primary education. (Education Policy and Data Center, 2014). By 2015, 68.5% of the Moroccan population was literate, which spiked from 41.6% in 1990. But despite this long-term commitment to education, there remains a startling gap between men and women: 78.6% of adult males, beyond the age of 15, can read and write, while only 58.8% of adult females can do the same thing in their everyday life (Central Intelligence Agency, 2015). In rural areas, there are many traditional and religious obstacles to businesses when they want to provide positions to female employees, and quite a few females do not have relevant knowledge and skills. Morocco is an Islamic country (about 99% of people are Muslims), and Islam was declared the state religion in 1961. Muslims are obligated to pray five times a day, and people will not work on Friday. During the holy month of Ramadan Muslims must fast from sunrise to sunset and are only allowed to work six hours a day. Respecting local people’s religious belief is an important tradition when doing business in Morocco, and people should bear in mind that Islam penetrates every sector of Morocco’s business. The success of business in an Islamic country like Morocco depends on how will a company can combine religious values with its principles.

II. Politics of Morocco
Morocco’s political system has been carefully evolving from a strongly centralized monarchy to a parliamentary system. Although the King, Mohamed VI, retains much of the executive power, the parliamentary elections of 2011 could be seen, despite the relatively low turnout (45%), as a new step towards democracy (European Forum, 2015). In the past, the government failed to carry out a policy of privatization of certain industries. But after the democratic uprising, known as Arab Spring, a decentralization process has been launched, which opened up a number of prime opportunities for new businesses. This new political dynamics will allow UBS and other companies to raise capital and manage the sale of centrally-owned assets for Morocco’s government and central bank. Moroccan government has enacted two business-related laws, which aim to boost its domestic economy. The first one is 06-99 Law on free pricing and competition, setting the rules for the protection of competition and prohibiting anti-competitive economic practices (Global Legal Insights, 2015). Without this law, international companies who want to launch business in Morocco would not be able to operate in an open market, and the transparency and fairness in the business will not be guaranteed. The second one is 09-08 Act, which governs data protection, is to facilitate the growth of the digital economy while protecting privacy. Financial service companies, such as UBS, have a huge amount of confidential data and analyses, and those multinational companies need to have a fair platform to compete with domestic competitors. Therefore, both of these laws ensure the development of financial services in Morocco (Baker & McKenzie, 2013). The establishment of special commercial courts in 1997 led to some improvement in the handling of commercial disputes. In 2009, the National Committee for the Business Environment was created in partnership with the private sector, and it has worked to identify needed reforms and raise awareness of business environment issues nationally and internationally (U.S. Department of State, 2015). Currently, commercial disputes between companies do not consume too much time and resources to solve, and arbitrary authority is making progress to foster the principle of impartiality in business. In 2015, Morocco moved down to the 88th place out of 168 countries (80th in 2014) on Transparency International’s Corruption Perception Index (Transparency International, 2015). Any company doing business in Morocco needs to be aware of the fact that corruption remains a major problem, and it is partly due to the low salaries in the public sector and loose control of the government. All businesses in Morocco should cooperate with each other to terminate the corruption from its roots by creating a fair competitive environment.

III. Economic Overview
The Gross Domestic Product (GDP) in Morocco was $107 billion in 2014. The GDP value of Morocco represents 0.17% of the world total GDP. As Figure 2 shows, Moroccan economy is growing continuously due to significant progress in implementing economic reforms in last year. It advanced 4.7% year-on-year in the three months leading up to December 2015 (Reuters, 2016). The fast-growing economy has been attracting many service businesses, such as finance and telecommunications companies, to enter Morocco’s appealing market. As Figure 3 shows, the service sector comprises the highest share (57.7%) in Morocco’s GDP, especially retailing, tourism, and telecommunication. Morocco is regarded as a service-based economy. There is a strong demand for services in Morocco, and the service sector provides great support to other sectors and boosts Morocco’s social and economic development. Agriculture is another crucial component of the economy, which contributes 13% of the GDP, and 40% of the labor force is involved in agricultural production, making agricultural sector Morocco’s largest employer. The main driver of the GDP volatility in Morocco has been the weather factor. Due to the adverse weather effect on agricultural output at the end of 2015, economic growth is expected to slow to 2.6% in 2016 (Reuters, 2016).

Industry contributes about one-third (29.3%) of the annual GDP, which is made up of phosphate mining and processing, construction, and manufacturing. Morocco’s industrial production growth is continuing to grow at 1.6% per year. Morocco has 37 industries and mining is the largest one among those industries. It is also the largest foreign exchange earner in Morocco. It accounts for 35% of foreign trade and roughly 6% of the country’s GDP. The country possesses 75% of the world's phosphate reserves, which are used in agriculture and industry, and is the world’s leading exporter and third largest producer of this mineral. Morocco also has large deposits of antimony, anthracite, barite, copper, cobalt, lead, iron ore, silver, salt, and zinc (Bloomberg Business, 2010). Morocco has become an appealing international mining market due to its abundance mineral resources. Inflation rate (% change in the Consumer Price Index) in Morocco fell to 0.4% in 2014 from 1.9% in 2013 (World Bank, 2015). Morocco’s inflation has been moderate at 1-2% per year over the past five years. Such low inflation has been beneficial for the economy. It is encouraging people to buy goods and services in the market, and the cost of food and fuel is bringing down the cost of living. The modest inflation has been a pro-business factor, since interest rates has been low during this period. Morocco’s central bank cut its benchmark interest rate to 2.5% from 2.75% on December 16th, 2014 (Reuters, 2015), encouraging borrowing to make purchases and investments. This is also a positive for companies, such as automobile and manufacturing industries, because people have more money to spend, which can create additional consumption in the economy. Over two-fifths of Morocco’s working population remains in agriculture, while a third works in the service sector. The remainder is mostly employed in mining, manufacturing, and construction industries. Unemployment Rate in Morocco increased to 10.2% in 2014 from 9.2% in 2013. As the economy continues to modernize, industries and service sectors may absorb workers, but many of other workers lost their jobs in the agricultural sector, especially in the rural areas (Quandl, 2015)

IV. Trade
Figure 4: Growth rate of trade value
Figure 4: Growth rate of trade value
Source: WITS, 2013
Source: WITS, 2013
Morocco is the 71st largest exporter and the 58th largest importer in the world. In 2013, Morocco exported $21.96 billion and imported $45.18 billion, resulting in a negative trade balance of $23.22 billion. As Figure 4 shows, the growth rate of Morocco’s trade value has been increasing steadily since 2011. The exports are led by Phosphoric acid, which represents 10.1%, followed by ignition wiring sets, which account for 6.51%. The most recent imports are led by refined petroleum that represents 9.2%, followed by crude petroleum, which accounts for 8.57% (WITS, 2013). The top export destinations of Morocco are Spain ($4.71 billion), France ($4.14 billion), Brazil ($1.31 billion), and the United States ($0.92 billion). The top import origins of Morocco are Spain ($6.11 billion), France ($5.84 billion), the United States ($3.39 billion), and China ($3.13 billion). Spain and France are Morocco’s top trade partners, which is the result of Morocco’s geographical proximity to Europe and Morocco’s past under Spanish and French protectorates (WITS, 2013). The currency of Morocco is the Dirham. Morocco guarantees full currency convertibility for capital transactions, free transfer of profits, and free repatriation of invested capital. Foreign investments financed in foreign currency can be transferred tax-free, without amount or duration limits. Meanwhile, Morocco maintains an exchange rate peg, which was set at an 80/20 split Euro/Dollar until April 2015, and has recently been reallocated to a 60/40 Euro/Dollar basket, reflecting evolving trade relations (U.S. Department of State, 2015). The peg helps finance service businesses, such as UBS, to achieve superior foreign exchange service. Spot, forward and foreign exchange swap trades, and option trades will have great potential to develop in the future. By 2014, Morocco became the second-largest destination for FDI in North Africa and the third-largest recipient of FDI on the African continent. France (21%), the United Arab Emirates (13.3%), Saudi Arabia (12.8%), and Spain (4.3%) have been the four main investors in Morocco. FDI is mainly concentrated in the real estate sector, followed by industry and tourism (Aoki, 2015). Openness can help local small and medium-sized banks to become a partner with UBS or other international financial service business, receiving trade export and import services. All imported goods must be cleared with customs whether they are imported by road, air, sea or post in Morocco. The average MFN applied tariff rate is 27.4% for agricultural products and 8.7% for non-agricultural products. Imports are also subject to a Value Added Tax (VAT), varying from zero to 20%. Morocco government sets higher tariffs on agricultural products, aiming at protecting agricultural sector’s employment from intensive global competition. Meanwhile, Morocco uses tariff quota and special safeguard to protect domestically produced commodities from competitive imports. Imports exceeding the permitted quantity will be charged a higher tariff rate, averaging 13.5% of tariff quota and 16.2% of special safeguard (WTO, 2015). However, Morocco has implemented tariff reforms for non-agricultural products consisted in the reduction of tariffs. The increased trade liberalization enables international trade businesses to get access to the Moroccan market. Morocco has been a member of the UN since November 12th, 1956 and the WTO founding member since January 1st, 1995, promoting international cooperation and trade. Within the framework of its global openness and liberalization strategy, Morocco has signed five free trade agreements either bilaterally or regionally during the past decade, including Morocco-European Union Association Agreements, Morocco-EFTA Free Trade Agreement, Morocco-United States Free Trade Agreement, Morocco-Turkey Free Trade Agreement, and Morocco-Arab Countries Trade Agreement and created Arab Free Trade Zone with other Arab countries (Moroccan Investment Development Agency, 2015). With those agreements, finance service companies, such as UBS, could provide effectively structured short-term loans for commodity traders to promote trade between producers, processors, other traders and end-users. Morocco’s Port Tangier-Med is Morocco the largest, most modern, and best-located container, transshipment, and logistics port in the entire Mediterranean and the whole continent of Africa. According to Morocco’s 2015 report, the government is planning to build new ports in an attempt to improve and expand its regional port infrastructure by 2030 (Morocco World News, 2015). Morocco has one of the most developed traffic systems on the North African continent. It consists of nearly 60.000km of classified roads, 11 commercial ports, 1.907km of railway, and 15 airports open to local and international traffic (Moroccan Investment Development Agency, 2015). For over a decade, Moroccan government has been launching large-scale projects aimed at elevating its infrastructure performance. Especially, international businesses will have great convenience to export goods and services to Morocco, such as automobiles and high-tech products.

V. Financial and Banking Sector
The economic environment remains conducive to further growth of private and commercial banking activity in Morocco. In the past decade, macroeconomic growth stayed quite robust, providing the background for dynamic growth in banking credits. At the end of 2014, total bank assets in Morocco were worth $135.2 billion, up from $129.6 billion a year earlier, according to the kingdom’s central bank, Bank Al Maghrib (Morocco World News, 2015). In addition, Moroccan government has created Casablanca Finance City as a financial gateway for investors looking to investment opportunities in Africa, as well as for international businesses to set up headquarters for their regional operations (Pisa, 2014). The new finance city will help UBS and other finance service businesses to build strong cross-border relationships and a powerful global distribution network. Morocco has capitalized on its proximity, 8 miles, to Europe and relatively low labor costs, which offers investors multiple opportunities to do business with European Community, U.S. East Coast, Africa, and the Middle East (Nsehe, 2013). As a global financial firm with offices in over 50 countries, UBS will give foreign investors convenient access to Morocco’s financial market. Foreign investors will enjoy many banking benefits that help companies do business in Morocco. They can carry out investment transactions and transfer income generated by their investments and the proceeds of liquidation or sale of such investments to the country of their choice (Reghai, 2014).

VI. Conclusion
Strategically located less than few hours from the main European cities and many countries in the Middle East and North Africa region, Morocco has become one of the most growing and dynamic counties in the African continent. Morocco provides appealing advantages for international business, and is becoming a prominent partner for many countries to start cooperation. Morocco has a young and productive workforce, fast-growing economy, business friendly laws, a stable political environment, a number of free trade agreements and competitive infrastructure that support trade and investment. All of these will continue to act to strengthen and stabilize financial markets and improve investors’ confidence in Morocco.

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