The auto-entrepreneur status is one of the easiest ways of getting started and making your work legal in Morocco. It’s also one of the cheapest options (tax wise).
But isn’t this too good to be true? Hmm, indeed!
The auto-entrepreneur status can make you lose all your belongings too!
How? Let’s see.
Auto-entrepreneur status hidden rule
There is a hidden rule in the auto-entrepreneur status that says: There is no separation between you and your work.
Hmmm… What does this mean?
Well, let’s explain this with an example.
Let’s imagine you signed a contract with a company to provide a service, like the maintenance of some machines for example.
A few months after finishing the job, you got a letter from the company saying that you did a bad job and the machines are now damaged due to your work. The company is suing you and asking for 1,000,000 MAD in damages.
I hope this will never happen to you, but for the sake of this example, let’s say it actually happened. And the court found out it’s actually your fault.
If you are an auto-entrepreneur, you’ll need to pay the whole amount. If you don’t have enough money, they can take over your personal belongings: house, car, phone, etc.
If you signed the contract as a company, there is a protection in place by default. If the company can not pay the whole amount, then the company will go bankrupt. They will not take over your personal belongings given it’s separated by law.
Separation of assets
That’s what we call separation of assets. In fact, when you create a company in Morocco, you’ll create an SARL. Société A Responsabilité Limitée. The Responsabilité Limitée part literally means there is a separation between you and your company.
The auto-entrepreneur status is good and has fewer taxes, but it’s worth keeping in mind that it comes with risks too.
If you are after big contracts and big projects, it’s worth creating a company instead of using the auto-entrepreneur status. This way, you’re protected by law.
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5 responses to “You can lose everything with the auto-entrepreneur status”
Hello, thank you for the amazing content. Could you write more about people who were using the auto-entrepreneur status but are exceeding the limit of profit, so they’ll need to create a company ? I’m interested in how to setup a company as a freelancer, paying taxes and things we can do to lower the amount of taxes, etc. Thank you!
Hello,
We have an ebook for just this. You can find it at https://makeitlegal.ma/
Hello, thank you very much for this extremely helpful content! I started working remotely with a US based NGO and I have no idea what I should I do in terms of taxes, health inssurance etc.. and there is no content about this for Moroccans, so stumbling upon your blog is LIVE SAVING.
The NGO I worked with (through an Employment Agreement) asked me to get my own health insurance pay for it and they will repay me upon submitting it with my monthly salary invoice. I went to some private insurance providers and they said we only provide insurance for companies not individuals. After some research I found two options: LA MAROCAINE VIE and Allianz Maroc (trying to decide between the two).
However, I’m wondering If I do proceed with one of them should I still apply for auto entrepreneur to get a legal status? Although I read in one of your blogs that it affects the visa process and I’m planing to travel abroad…
Sorry if this is too long and thank you so much for taking the time to read my comment!
Hello Mariya, I’m glad you found the content helpful!
Regarding your question, yes health insurance is usually for companies only. The two companies you found are indeed the ones providing this for individuals, but I personally recommend LMV. Aaaand there is also an article about that 🙂 https://remote.ma/2019/08/05/how-to-get-health-insurance-in-morocco-when-you-work-remotely/
100% go with AE status. Only open a company after reaching a stage where AE is no longer working for you. Regarding the visa, especially US visa, as long as the company provides an official invitation, you should not have a problem. It gets tricky for Schengen visa… but that’s a trade off 🙂
Good luck!
great content broter