Doing Business In Ghana
Ghana's strategic location as the “Centre of the World” makes it a prime location for investors to get access to the African market and beyond. As a democratic republic, the country's policies are well-coordinated to ensure that investors, both local and foreign, benefit from rewarding returns.
Ghana has world-class industries in technology, agriculture, manufacturing, mining, energy, financial services, oil & gas and the vigorous industrialization efforts and policies foster a business-friendly environment where investors thrive.
In this article, we shall explore the preliminary requirements of doing business in Ghana, including registration with the Registrar of Companies, registration with Ghana Investment Promotion Centre (GIPC) and its benefits to investors, and other statutory necessities.
Registration of Businesses with the Registrar of Companies
In Ghana, the operations of companies are regulated by the Companies Act 2019 (Act 992), the Ghana Investment Promotion Act 2013 (Act 865), Income Tax Act 2015 (Act 896) as Amended and related tax laws, the National Pension Act 2008 (Act 766) as Amended, the Labour Act 2003 (Act 651) and other legislation depending on the industry. Thus, any Investor intending to set up a business in Ghana must first register the business with the Registrar of Companies either as a company limited by shares, an unlimited company, a company limited by guarantee or an external company in accordance with the provisions of the Companies Act. The type of company to be registered/incorporated depends on the nature/object of business of the company and industrial laws.
The basic requirements to register a company in Ghana are the name of the proposed company, the object of the business, details of shareholder(s) which can be a natural person or a corporate body, authorized shares and stated capital of the proposed company, tax identification number (TIN) in Ghana for proposed shareholders, Company Secretary and directors of the company.
It is important to note that unlike shareholders and company secretary of a company, Ghana's Company law does not permit corporate bodies to act as director(s) of a company. Also, the minimum number of directors of a company must at all times be kept at two with one being ordinarily resident in Ghana. Other information to be provided by the proposed company is postal and physical addresses of the proposed registered place of business, details of auditors and identity of officers of the proposed company among others. Having satisfied the Registrar of Companies with the required information for incorporation/registration of business, and after payment of the statutory fees of filing and stamp duty on the proposed stated capital, the Registrar will then issue to the company a certificate of incorporation.
Capital Requirement
The capital requirement of an entity depends on the nature of business, the level of local/foreign participation and Industrial setup. Generally, in the case of a joint venture/enterprise with Ghanaian citizen, the foreign equity capital contribution must not be less than two hundred thousand United States Dollars (US $200,000) and the equity of the local partner not less than ten percent (10%) of the equity participation. Similarly, where the enterprise is wholly owned by a non-citizen of Ghana, the foreign equity capital must not be less than five hundred thousand United States Dollars (US $500,000). Nonetheless, the equity capital can be paid for in cash or capital goods relevant to the investment or a combination of both. The amount of stated capital requirement, equity capital contribution by a non-Ghanaian citizen and the level of local participation in an enterprise may differ from industry to industry, the nature of business of the entity and the local content regulations applicable to the operations of the company.
Other Statutory Registrations and Requirements
Subsequent to incorporation/registration with the Registrar of Companies, an entity is mandated to also register with the Ghana Revenue Authority (GRA), create bank accounts with a preferred authorized bank in the country for the remittance of equity capital, and register with Social Security and National Insurance Trust (SSNIT) for the payment of pension contributions for its staff when the entity engages the employment of workers. Additional licenses/permits will be required before commencement of business by the incorporated entity depending on the industry of operation.
Registration with Ghana Investment Promotion Centre (GIPC)
Any enterprise/business entity with foreign investment participation, after incorporation/registration, is mandated to register with the Ghana Investment Promotion Centre (GIPC) before commencement of business. The Ghana Investment Promotion Centre (GIPC) is a statutory agency responsible for attracting and promoting investment in Ghana with the added mandate of
encouraging and facilitating valuable investments that drive economic growth, unlock opportunities, and create employment in Ghana.
Security of Investment and the Benefits of Registration with GIPC
The Ghana investment Promotion laws ensure that foreign investors are protected and provide an enabling environment for remittance of profits and capital invested after liquidation. A foreign investor is subject to the same laws that apply to domestic enterprises, particularly in relation to licenses/ permits required of enterprises for conducting specific business activities; maintenance of business books and records in accordance with the recognized accounting standards; insurance requirements that apply to similar enterprises; and taxes required to be paid by enterprises which engage in similar activity. An enterprise registered with the Ghana Investment Promotion Centre (GIPC) has an additional advantage of protection against expropriation by theGovernment of Ghana and shall not be compelled by law to cede that person/entity's capital to another person. In addition, an enterprise through an authorized dealer bank shall be guaranteed unconditional transferability in freely convertible currency of dividends or net profits attributable to the investment made in the enterprise; payments in respect of loan servicing where a foreign loan has been obtained; fees and charges in respect of a technology transfer
agreement; and the remittance of proceeds, net of all taxes and other obligations, in the event of sale or liquidation of the enterprise or any interest attributable to the investment in the enterprise.
Employment and Immigration matters
An incorporated entity is permitted to engage in the services/employment of a foreign national having complied with the industrial compliance requirements such as the local content laws which may vary from one industry to another. Companies registered with the Ghana Investment Promotion Centre are permitted to employ key expatriate personnel in accordance with the level of investment. Consequently, the GIPC grants foreign immigration quota to companies for the employment of foreign nationals to work in the company as managers, supervisors or experts. The number of immigrant quotas issued to a company depends on the stated capital/equity contribution of the company.
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