Morocco opens up charity sector, but foreign donations still face tight controls

Morocco is making room for more philanthropic activity, but strict rules on foreign donations and limited legal options for nonprofits are keeping things in check.

A new report from Indiana University Lilly Family School of Philanthropy highlights the complex environment for charity work in Morocco, placing it somewhere between openness and restriction compared to its regional neighbors.

Unlike countries such as Jordan or Saudi Arabia that allow various legal forms for nonprofits, Morocco only recognizes the association. This narrow framework may limit growth and innovation in the nonprofit space.

Starting an association also requires prior government approval.They can only be dissolved by a court ruling, unlike in countries like the UAE, where the government can shut down organizations without any judicial process. That puts Morocco in a more balanced legal position.

When it comes to money, Moroccan nonprofits get some tax benefits, but they’re modest.

Donations are tax-deductible only up to 5% of taxable income, and only if the organization is officially recognized as serving the public good. 

There’s no exemption from VAT either, making Morocco less generous than countries like Turkey.

The report also notes that Morocco enforces tight restrictions on foreign funding, citing national security concerns. 

Only officially recognized public benefit associations can receive donations from abroad, and they must report them and pay taxes. 

It’s part of a broader regional trend of increased financial oversight in response to global risks like money laundering and terrorism financing.

Still, the government supports some civil society work, especially in social and environmental areas.

It promotes a “development-focused” model for nonprofits, while steering clear of groups focused on advocacy or human rights, an area where restrictions are growing.

Morocco’s economy is also showing signs of improvement, with per capita income rising by 13.5% between 2021 and 2023. 

While this growth is lower than in countries like Turkey or the UAE, it signals a gradual recovery that could boost local giving capacity, though the charity sector still faces structural limits.

Transparency rules are in place, nonprofits must file regular financial reports, but without the heavy penalties seen in places like Egypt, where unregistered groups face fines of up to $60,000.