In Morocco, hotel transactions are primarily governed by a combination of general commercial, real estate and regulatory frameworks rather than a single dedicated hospitality law. Key sources include the Moroccan Commercial Code, which governs business transfers and commercial operations, and the Dahir of Obligations and Contracts, which sets out general contractual principles applicable to hotel management and franchise agreements.

Real estate aspects are governed by property laws and, where applicable, Law No 49-16 on commercial leases. Hotel operations are also subject to tourism-specific regulations, including classification and licensing requirements under the authority of the Moroccan Ministry of Tourism. Additional considerations include foreign exchange regulations and competition law (Law No 104-12 on freedom of prices and competition).

Where the hotel and potentially residences form part of a master-planned community, additional legal considerations arise, notably (without limitation) under Law No 25-90 relating to subdivisions, Law No 2-90 on urban planning, Law No 14-07 (completing and amending the Dahir dated August 12, 1913 relating to land registry), Law No 18-00 on co-ownership and Law No 39-08 on real rights, together with their implementing regulations. These frameworks govern zoning, land registration, development authorisations and the organisation of owners’ associations, and may impact both the development phase and the long-term operation of the project in general.

Hotel transactions are typically structured as either share deals or asset deals. Share deals are common where the hotel is held through a dedicated company, allowing the transfer of the business as a whole through the acquisition of shares, including its contracts and authorisations, subject to due diligence.

Asset deals are also used, particularly where the focus is on the underlying real estate or, in some cases, the transfer of the going concern (fonds de commerce), governed by the Moroccan Commercial Code and subject to specific formalities.

The choice of structure mainly depends on tax considerations, liability allocation and the overall objectives of the transaction.

Hotel transactions are generally not public, and their terms, such as the identity of the parties and the purchase price, remain confidential between the parties.

However, where a transaction qualifies as a concentration subject to notification and approval under Law No 104-12 on freedom of prices and competition, certain information is published on the website of the Moroccan Competition Council. This typically includes the identity of the parties and a general description of the transaction, but not the detailed contractual terms or the purchase price.

In Morocco, there are generally no restrictions on foreign investors acquiring hotels, and foreign investment in the sector is encouraged. Investors may acquire hotels directly or through Moroccan entities.

Transactions must comply with foreign exchange regulations, particularly for the inflow and repatriation of funds, and may be subject to notification under Law No 104-12 on freedom of prices and competition where thresholds are met.

In Morocco, most hotels are operated through management agreements or franchise agreements, especially for medium-to-large hotels. These structures are common because they allow owners to work with international brands and benefit from their know-how and visibility. Hotel lease agreements are less common in the hospitality sector.

It also depends on the city and the type of hotel. There are some successful independent hotels, usually owned and run by people with experience in the sector. However, in major cities like Rabat, Casablanca and Marrakech, most hotels work with international operators. Some owners prefer a franchise model and keep control of operations with a third-party manager, while others, especially public institutions, large companies or investment funds, prefer to fully delegate management to international operators.

Hotels are commonly operated under four main structures (i) independent ownership, (ii) management agreements, (iii) franchise agreements and, less frequently, (iv) lease agreements.

In an independent structure, the owner manages and operates the hotel directly. Under a management agreement, the owner appoints an operator (often an international brand) to manage the hotel on its behalf, while retaining ownership and bearing most of the financial risk. In a franchise agreement, the owner operates the hotel but uses the brand, systems and standards of an international operator. In a lease structure, the operator rents the hotel from the owner and operates it at its own risk, paying a fixed or variable rent.

The key differences lie in the level of control, operational responsibility and risk allocation between the owner and the operator.

In Morocco, hotel management agreements typically involve the owner retaining ownership of the hotel while appointing an operator, often an international brand, to manage the day-to-day operations. The operator is responsible for running the hotel in accordance with brand standards, while the owner funds the business and bears the financial risk.

Key terms usually include the duration (often long-term), management fees (base and incentive fees), budget approval processes, performance tests and termination rights. The agreement also covers operational control, reporting obligations and the use of the operator’s systems and brand.

In practice, management and franchise agreements with international operators are often governed by foreign law (neutral between the parties), depending on the operator and the negotiation with the owner.

As mentioned previously, hotel management agreements in Morocco are not governed by a specific legal regime and fall primarily under general contract law as set out in the Dahir of Obligations and Contracts.

From a regulatory perspective, key considerations arise from rules that cannot be contractually waived, including tourism regulations (notably licensing and classification requirements), foreign exchange regulations governing the payment of fees to foreign operators, and employment law, as hotel staff are typically employed by the owner.

Additional aspects may include competition law considerations and, to an extent, environmental and urban planning regulations applicable to the operation of the hotel.

The main challenge lies in aligning these mandatory local requirements with management agreements often governed by foreign law, particularly when dealing with international operators.

In Morocco, hotel lease agreements are relatively uncommon but may be used where the owner leases the hotel to an operator who runs the business in its own name and at its own risk. These agreements are typically long-term and provide for a fixed rent, a variable rent based on turnover, or a combination of both. The operator is generally responsible for day-to-day operations, staffing and operating costs, while the owner retains responsibility for structural works and certain capital expenditures. Key terms include rent structure, duration, maintenance obligations, insurance and termination rights.

Hotel lease agreements are primarily governed by general contract law under the Dahir of Obligations and Contracts and, where applicable, by Law No 49-16 on commercial leases. From a regulatory perspective, key considerations include compliance with tourism regulations (licensing and classification) and local operational requirements.

The main challenges relate to the interaction between lease structures and mandatory Moroccan rules, particularly in ensuring compliance with lease regulations, allocation of operational responsibilities and, where relevant, alignment with foreign-law governed arrangements, if any.

Franchise agreements in Morocco typically involve the owner operating the hotel under the brand, systems and standards of an international operator, while retaining control over day-to-day operations, often through a local or third-party management team.

Franchise agreements are usually long-term and include the grant of a trade mark licence, together with access to reservation systems, marketing platforms and operational standards. Key terms generally cover franchise fees (initial and ongoing), brand compliance obligations, key money (in some cases), quality control and audit rights, training and support, as well as termination rights.

Hotel franchising agreements are not subject to a specific franchise regime and are primarily governed by general contract law under the Dahir of Obligations and Contracts. From a regulatory perspective, the main challenges are relatively similar to those applicable to hotel management agreements, in particular the need to align foreign-law governed agreements with public order Moroccan rules, notably in relation to foreign exchange control, employment matters and local regulatory compliance.

In Morocco, hotel transactions are typically financed through a combination of equity and bank financing. Local banks play a key role and commonly provide medium-to-long-term loans, often secured by mortgages over the hotel property and other securities.

For larger projects, financing may involve a mix of local and international lenders, including development finance institutions. Shareholder loans may also be used, depending on the structure of the investment.

Additional options include public support or incentives, particularly for tourism projects aligned with national development strategies. The choice of financing depends on the size of the project, the profile of the investor and the bankability of the asset.

The most commonly used financing options for hotel transactions are equity combined with bank debt provided by local banks. Banks typically finance a significant portion of the project through secured loans, while investors contribute the remaining equity.

In Morocco, there are generally no restrictions on foreign financing of hotel transactions, and foreign lenders may provide loans to Moroccan borrowers. However, this is subject to important regulatory constraints, notably the banking monopoly under Law No 103-12, which may require foreign lenders to obtain prior authorisation from Bank Al-Maghrib (the Moroccan central bank) if the lending activity is considered to be carried out on a habitual basis.

In addition, foreign financing must comply with foreign exchange regulations, including requirements relating to the structuring, registration and repayment of external loans. In practice, these constraints mean that foreign lenders often participate alongside local banks or structure their involvement carefully from a regulatory standpoint.

AQ Law Firm does not have expertise in this area.

In Morocco, zoning and permitted uses, including hotel developments, are governed by urban planning documents under Law No 12-90, notably the schéma directeur d’aménagement urbain (SDAU), the plan de zonage, and the plan d’aménagement. These documents define the allocation of land uses (including tourist zones) and set the applicable construction rules, such as permitted uses, building conditions and planning constraints. Hotel developments must comply with these documents and obtain the required authorisations, including a building permit.

Where hotel use is not permitted, a change may require an amendment to the relevant urban planning documents, which is a formal administrative process. In practice, developers may also seek a derogation or rely on the compatibility of the project with the applicable planning framework, subject to approval by the competent authorities.

In Morocco, hotel construction and refurbishment are governed by both urban planning rules and sector-specific regulations, notably Law No 12-90 relating to urban planning and Law No 80-14 relating to tourist establishments, as implemented by Decree No 2-23-441.

From a planning perspective, key parameters such as height, density, floor area ratio and parking requirements are determined by the applicable urban planning documents (in particular the plan d’aménagement) and therefore vary depending on the location of the project.

In addition, Law No 80-14 requires that any construction, extension or conversion of a hotel comply with specific standards relating to construction, functionality, safety, hygiene, energy efficiency and water use. These standards are assessed as part of the building permit and certification process.

Fire protection, health and safety, and accessibility (including for persons with reduced mobility) are reviewed through the authorisation and classification process, with input from competent authorities such as civil protection services. Finally, the number of rooms, facilities and services directly impacts the classification of the hotel, which in turn determines the applicable technical standards.

The construction of a hotel requires obtaining a building permit in accordance with Law No 12-90 relating to urban planning. Refurbishment works may also require a building permit where they affect the structure, layout or external aspects of the building, while minor internal works may not.

The application is submitted to the competent municipality and must include architectural plans, technical studies and supporting documents demonstrating compliance with applicable planning and construction regulations, including zoning requirements. In practice, hotel projects typically involve a co-ordinated review by multiple authorities.

In terms of timing, the process typically takes between one and three months in practice, if not more, depending on the complexity of the project and the location, although delays may occur where additional approvals or clarifications are required. Law No 12-90 provides that, in the absence of a response from the president of the communal council, the building permit is deemed granted after a period of two months from the date of submission of the application. In addition, whether granted expressly or tacitly, the permit lapses if foundation works are not commenced within one year from the date of its issuance.

Under Moroccan law, building permits are administrative decisions and are not subject to a formal public objection process prior to their issuance. However, third parties, including neighbouring landowners or interested parties, may challenge a building permit after it has been granted before the administrative courts, typically on the basis of non-compliance with applicable urban planning rules or procedural irregularities.

In practice, objections are most commonly raised by neighbours or other affected stakeholders, particularly where the project may impact their property or the surrounding environment.

To limit such challenges, developers typically ensure strict compliance with applicable planning documents and regulations, conduct thorough technical, environmental and legal due diligence, and engage early with relevant authorities. In some cases, informal engagement with local stakeholders may also help mitigate the risk of post-permit disputes.

AQ Law Firm does not have expertise in this area.

Heritage preservation in Morocco is governed by Law No 22-80 relating to the conservation of historical monuments and sites. Where a hotel is located within, or constitutes, a classified or registered monument or site, specific restrictions apply.

Under this law, buildings may be subject to either registration (inscription) or classification (classement), depending on their historical or cultural value. In both cases, any works affecting the property are strictly regulated. For registered properties, any modification, restoration or alteration requires prior notification to the competent administration. For classified properties, stricter controls apply: no demolition is permitted without prior declassification, and any restoration, modification or new construction is subject to prior administrative authorisation.

In addition, restrictions may extend to surrounding areas, including limitations on construction or modifications affecting the environment or visual integrity of the site.

In practice, these requirements may significantly constrain redevelopment or conversion projects and may lead to longer approval timelines and additional administrative oversight.

Hotel operators must comply with technical, functional, safety and hygiene standards, as well as service quality requirements, which vary depending on the category of the establishment. In addition, the operator must hold a valid operating authorisation and ensure compliance with ongoing regulatory obligations, including insurance requirements and periodic controls by the competent authorities.

The procedure is initiated by submitting an application file to the competent Regional Investment Centre (CRI), including, in particular, the certificate of conformity, documentation relating to the applicable standards, and information on the operation and management of the establishment. The file is reviewed by several authorities, including civil protection and hygiene services, and is subject to an inspection to verify compliance with applicable standards.

Following a favourable opinion of the Regional Unified Investment Commission, a provisional classification is granted, and the operating authorisation is issued by the competent authority, subject in particular to the provision of insurance coverage. A final classification is granted after the opening of the establishment and further inspection.

Operating licences are administrative decisions and are not publicly disclosed as such, although certain information (such as classification) may be known through administrative records or sectoral bodies.

In Morocco, there is no single mandatory sustainability certification specifically applicable to hotels (such as LEED). However, sustainability requirements arise from a combination of environmental, construction and sector-specific regulations.

Hotel developments must comply with general environmental and construction standards, including energy efficiency and water management requirements under Law No 80-14 relating to tourist establishments, which requires compliance with technical standards covering, among others, sustainability aspects. In addition, broader environmental legislation and national policies promote sustainable development, particularly in relation to energy use, waste management and environmental impact.

In practice, many international hotel operators and developers voluntarily adopt international certifications such as LEED or similar ESG standards, particularly for high-end or branded projects, although these remain optional.

There are no specific Moroccan employment law rules tailored exclusively to hotel transactions. However, general labour law principles under the Moroccan Labour Code apply and are particularly relevant in the context of transfers of hotel operations.

Where a hotel is transferred as a going concern, employment contracts are generally transferred automatically to the new employer, with continuity of employment preserved and existing rights and obligations maintained. Employees cannot be dismissed solely as a result of the transfer, and any termination must comply with the applicable legal grounds and procedures.

In addition, employees benefit from statutory protections relating to notice periods, severance indemnities and collective dismissal procedures, which may be triggered depending on the scale of the restructuring.

In practice, these rules require careful structuring of hotel transactions, particularly in asset deals involving the transfer of a going concern, and typically necessitate the involvement of local legal counsel to ensure compliance with Moroccan labour law requirements and mitigate related risks.