The prevalent informality and sheer size of international remittances characterize the North African countries. This study primarily aims at investigating how remittances moderate the effects of financial development on the informal economy in North African countries. Employing pool mean group (PMG)/panel ARDL approach and a balanced panel data set over the period 1980-2015, we find that remittances moderate the negative relationship between financial development and informal economy. This finding suggests that remittances bolster financial development, which, in turn, decreases the informal economy. Based on this result, we recommend that tailored policies and interventions are needed to promote financial development and international remittances in the North African region. 1 | INTRODUCTION Informality, or the informal economy, defined as "all economic activities by workers and economic units that are-in law or practice-not covered or insufficiently covered by formal arrangements" (OECD & ILO, 2019, p. 155), is a common issue that countries face all over the world, particularly developing countries. From the definition, it is clear that informality mainly manifests itself in production and employment. Indeed, according to Loayza (2016), over 70% of employment and 30% of production take place in the informal sector in a typical developing country. On a global scale, the informal economy accounts for 13% of world GDP, corresponding to US$10 trillion (Lewis, 2016). In terms of employment, two billion people, equivalent to about 62.1% of the working-age population, are informally employed in the world (ILO, 2018, p. 13). Finally, OECD and ILO (2019) estimates that 81% of all enterprises operate in the informal sector in the world. High levels of informal economy place an increasing strain on the formal economy and impede economic development and inclusive economic growth, particularly in developing countries. That said, the informal economy adversely affects a developing economy in several ways. First, it erodes the tax base and therefore undermines fiscal sustainability (