Spain's EU Residency For Real-Estate Investment Plan Worries Morocco

: NEWS; 12/06/12

Fernando Barciela
“Of course I’m interested if they give me a residence permit and one to my wife and two children,” says Ahmed, a small businessman in the northeast of Morocco who normally spends his summer vacation in Fuengirola on Spain’s Costa del Sol. “Instead of renting, we would make the effort to buy an apartment and in that way the visa thing would be over. At last, we would be able to travel about Europe freely.”

When the Spanish secretary of state for commerce, Jaime García-Legaz, announced last month that the government was contemplating granting temporary residence cards to foreigners who buy homes valued at over 160,000 euros, the foreigners he had in mind to revive Spain’s moribund housing market were Chinese and Russian. Spain grants most tourist visas to Russian visitors and Moscow is Spain’s biggest consulate.

However, for the moment the scheme has generated most interest in Morocco. To the extent that the country’s department responsible for foreign currency exchange controls, the Foreign Exchange Office, issued a statement saying that to take money out of Morocco to buy property would require its “prior authorization,” adding that permission is normally only given in “exceptional” cases.

Moroccans, like most North Africans, are obsessed by the red tape that represents an obstacle to them traveling to Europe. Spain’s seven consulates in Morocco last year granted 145,880 visas to travel in the Schengen bloc.

Spain this year has displaced France as Morocco’s main trading partner, while close to 300,000 Moroccans spend their holidays in Spain each year, mainly in the Costa del Sol — less than half the around 700,000 Spaniards who visit the North African country.

In order to make online purchases and pay for medical insurance contracted in Spain, some of the burgeoning Moroccan middle class that has emerged during the economic push of the past decade have opened bank accounts in Spain in the exclave of Ceuta and on the Costa del Sol. Credit cards issued by Moroccan banks cannot be used outside the country, and the Moroccan authorities consider accounts opened overseas by individuals to be illegal.

In order to convert their dirhams into euros to deposit them in Europe, Moroccans use parallel circuits that charge a commission of between four to five percent, or else risk smuggling in money in cash when they travel to Ceuta or Málaga by boat. Carrying large sums of the Moroccan currency is complicated by the fact that the highest denomination is the 200-dirham note, which is worth only 18.5 euros.

Ceuta, along with its fellow North African exclave Melilla, is the only place outside of Morocco where dirhams are freely exchanged for euros. According to the Casablanca-based daily Akhbar al Youm, Moroccans have some 30.8 billion euros stashed away in overseas bank accounts, principally in Switzerland and Britain.

The Foreign Exchange Office is anxious to prevent any further expansion of such illegal practices that could arise as a result of the Spanish government’s residency permit for house purchase plan. The statement issued by the office notes that any such purpose “with illegal instruments constitutes an infraction of the exchange control law.”

The statement also says that obtaining a residence permit abroad does not authorize the holder of such a permit to enjoy the tax benefits of this arrangement if their physical residence remains established in Morocco.

Casablanca daily Al Massae reported that the Foreign Exchange Office is concerned that a “large number of Moroccans may take advantage of the Spanish offer.” The government is looking to stem a potential “capital flight at a time when foreign exchange reserves have been depleted,” economist Najib Akesbi says.

Foreign reserves have dropped from 1.932 billion euros to 1.527 billion over the past 12 months, largely as a result of a widening trade deficit, with exports depressed by the crisis in Europe.

Article Previously published by El Pais

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Comments (9)

+6 #1 RE: Spain's EU Residency For Real-Estate Investment Plan Worries Morocco — Morcelli 2012-12-06 21:17

If I were to buy a property, visa or not, I would definitely chose Spain. The reason is pretty simple, Your money is lot safer. Let's say you buy a property in Morocco and you decide to rent it for the 10 months when you are not living in Morocco.
It's basically like giving your house away. If you are lucky the renter will take 20K to get out of the house that costs 100k, if not, you are out of luck and the unwritten law is with him/her.

Morocco is the only country in the planet where a renter can decide to take over your house without ever paying you a dirham of rent and the government agree with the renter, the same way the government agree to hand over your daughter or sister for marriage to her rapist.

If you decide to invest in Morocco think again.
The king of Morocco and his father before him loved the idea, he's the king of the poor , remember? the problem is the poor will actually pay your rent, it's the middle class and the rich who will take your money and your house .

Only the poor student use the foreign exchange to pay for his tuition and board abroad, most Moroccans use the middle man to get their money out of the Morocco.

I myself tried the foreign exchange, the fat guy smoking at his desk, -I was surprised he did not have a computer-, told me not to waste my time and his but if I insist I need to work on what he phrased as "dossier" , this dossier is basically impossible to complete even if you are a simple citizen.

I am always at awe when I see people who lived in the US for many years still want to do business in Morocco. Why do business or buy a house in Morocco when you can do it here in this great country of ours.
Morocco that I love is good for one thing and one thing only. Le couscous!

Until we revamp our judicial system that only benefit the king and his cronies, please stay away from doing any sort of buying or selling, but do go spend you vacation there, your money does help many over there but at least you get something out of it too.

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0 #2 RE: Spain's EU Residency For Real-Estate Investment Plan Worries Morocco — mbt 2012-12-07 12:37

Living in Spain has its disadvantage, the women there speak too much. The Spanish government has not thought well about the law to bring in investment to help the real-estate sector. It is not just that you buy a property and move to Spain, for those who are going to buy property what about the jobs and of course if you are wealthy enough to buy for 180k a place, would you care about the residency? Of course for people from Morocco and other third world countries it may just be a ticket, pay the Spanish government 180K Euros and get your foot and that of your family members' in to Europe. Why bother paying some mafia to carry you on a leaky boat to Italy? Do it ligit and pay the Spanish government to take you in with a welcome of flamenco dancers.

As to the Moroccan authorities, just imagine if the Moroccans with stashed pile of blue notes bought lots of properties in Spain, would it affect Morocco? I don't think so. The secret money does not show on any official documents anyway, so it is not calculated for the purpose of statistics and as to money taking flight out of the country, it is old as the guy who offer a dirham or two less then the official rate. I had no problem changing tens of thousands of dirhams in to any foreign currency from MOST bureau de change operators, there are others also who will exchange money for you without ANY problem. However I did find there are few fake notes in circulation both local and foreign.

I have to agree with Morcelli why bother setting up a business in Morocco or a property. Naive as I was I thought I will make some money and at same time help others, but the locals (not all) both your Si Mustaffas and the guy and gal seating on the chair in idaras helped themselves. Could not wait to get out of the place. It is nice to go back have a week's holiday and come back knowing that you have helped being part of the Plan Azure.

Until the king is king we will not see much progress. Being Friday today I wonder what mosque did the king attend, have not seen the news yet.

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0 #3 that's — because 2012-12-09 14:39

Moroccans still think Spain is worth sh-t. Spain is doomed for a big collapse and as one of my favorite characters, The Grinch, once said I would not touch it with a nine foot pole (hey it is Christmas season after all). Morocco at least has the advantage of being Muslim (yes that's important to me) not being tied to the Euro and is a better option right now as far as I am concerned (can devalue currency as you wish until it makes sense). I don't know if it is the Barca / Real thing, or the Al Andalus continued hallucination, or something else... maybe Moroccans like the treatment there where the Spaniards look @ them as peasants... A Spaniard friend of mine here in the US once told me that Moroccans are the low of the low in Spain...below the Ecuadorians!! ouch, the thought of that gives me the jitters...

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0 #4 little note — Iberkak 2012-12-09 20:53

The currency reserves are estimated at around 15.2 billion Euros not 1.527 Euros as the article stated.

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-3 #5 Re: that's because — Yet Another Moroccan 2012-12-10 01:32

Morocco has the 'advantage' of being Muslim! What does that even mean? Did you read the article, or the comments?
There is nothing more pathetic than this sense of exceptionalism.

Is this 'advantage' why corruption is so rampant? Or, why renting in Morocco is such an insane proposition?

Yeah, the Spanish look down on the Moroccans, and why is that a surprise? It's the old rich vs. poor, etc. It's hard to get respect when you're continuously attempting to '7hag' into other people's countries. Gee, even wonder why so many are emigrating legally or illegally to Europe?

I guess your silly 'Baraka' isn't working out too well for k7al rass.

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+3 #6 RE: Spain's EU Residency For Real-Estate Investment Plan Worries Morocco — Cherafat 2012-12-11 15:48

I am from Morocco and I have US citizenship. I moved to Spain to retire last November. The life is much cheaper than Morocco. My own family in Tetuan goes to Ceuta every week to shop. Everything is cheaper there. The meat and fish is half price than Morocco.
I can't imagine myself living in Morocco. Is a nightmare. I moved from there more than 20 years ago. I have a horrible memories growing up there.
Once my parents leave this world I will never go back there. I don't really see any improvement. The mentality is getting worse and the infrastructure is a maquillage,

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0 #7 RE: Spain's EU Residency For Real-Estate Investment Plan Worries Morocco — nataly 2013-01-03 05:13

www.domland.com

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-1 #8 Spanish Real Estate Market — Mr. Spanish Property 2013-01-19 12:00

If my opinion counted I would say Spanish housing market is ready for take-off in 2013!!! I just bought a luxus house on eudomi.com/ there is a lot of property available for cheap.

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