A Technology Transfer Agreement (TTA) is a legally binding contract between a Ghanaian company (Transferee) and a foreign entity (Transferor) lasting for not less than eighteen (18) months which involves:
- The transfer, sale, or licensing of industrial property (except trademarks, unless they are part of the technology being transferred).
- The provision of technical expertise, including feasibility studies, designs, training, and advisory services.
- The provision of technological knowledge needed to install, operate, and manage equipment, plants, and turnkey projects; and
- The provision of technological knowledge on using machinery, raw materials, or intermediate goods obtained through purchase, lease, or other means.
TTAs do not cover the sale of goods; instead, they focus on services that enhance industrial and commercial capabilities.
Legal Framework Governing TTAs in Ghana
TTAs in Ghana are primarily regulated by:
- Ghana Investment Promotion Centre (GIPC) Act, 2013 (Act 865) – This mandates the registration of TTAs with the GIPC.
- Technology Transfer Regulations, 1992 (L.I. 1547) – This regulates the registration of TTAs.
According to Section 37 of the GIPC Act, every TTA must be registered with the GIPC. The GIPC is responsible for:
- Reviewing submitted TTAs.
- Registering TTAs
- Monitoring and ensuring compliance with the terms and conditions of TTAs.
Some Mandatory Requirements for TTA Registration
For a TTA to be registered and enforceable, it must meet certain specific requirements. These include:
- Services provided must not be readily available in Ghana.
- The governing law must be the laws of Ghana.
- Training of local personnel is mandatory.
- Taxes on royalties are to be paid by the Transferor (foreign company).
- Fees payable are subject to thresholds set by the GIPC.
- TTAs cannot include certain unfair restrictions such as:
- Requiring the local company to buy all inputs exclusively from the foreign transferor.
- Imposing unnecessary royalty payments after industrial property rights expiration, termination or invalidation.
- Prohibiting the local company from improving or modifying the technology.
- The duration of the TTA should not be more than ten (10) years. If both parties agree, it can be renewed, but each renewal cannot exceed five (5) years.
- The TTA is effective on the date it is registered by the GIPC.
Threshold of Fees Payable Under a TTA
Fees payable by the Ghanaian company to the foreign Transferor are capped as follows:
| Service Type | Allowable Charge |
|---|---|
| Industrial Property Rights | 0-6% of Net Sales |
| Technical Services | 0-5% of Net Sales |
| Technical Services (only) | 0-3% of Net Sales |
| Know-How | 0-2% of Net Sales |
| Management Services | 0-2% of Profit Before Tax |
If a company requires approval for fees exceeding these limits, an application must be made to the GIPC for special consideration.
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