The Gaming industry (Game of Chance) in Ghana has witnessed tremendous growth over the last decade, evidenced in the numerous licensed companies operating in Ghana. It is, however, projected to grow significantly in scope over the next decade. It is, therefore, imperative for prospective industry players to be well abreast with the legal nuances and the phases involved in procuring a license from the Gaming Commission of Ghana.
To be considered for a game of chance license in Ghana, you must have a domestic entity. The entity should either be a partly or wholly owned Ghanaian Company. However, to be fully qualified as an entity capable of being licensed by the Gaming Commission, the entity must undergo three crucial separate processes in addition to other similar processes. These include the following:
- Registration of the business with the Registrar Generals Department.
- Registration of the business with the Ghana Investment Promotion Centre (GIPC).
- Acquisition of the license from the Gaming Commission of Ghana.
Processes for Incorporating a company (Private Limited Liability).
The following conditions must be met to incorporate a company (Private Limited Liability Company) in Ghana.
First and foremost, the promoters must decide who will act as the company's first directors. A company incorporated and registered in Ghana must have a minimum of two directors, both natural persons over 18 years, one being ordinarily resident in Ghana. By virtue of section 173 of the Companies Act, 2019 (Act 992), the following persons are excluded to be appointed as a company director in Ghana.
- An infant
- A person adjudged to be of unsound mind
- A body corporate
- A person convicted for fraudulent offences, including persons convicted for offences involving fraud or dishonesty and any other stipulations under section 177 of the Companies Act, 2019 (Act 992).
The directors also appoint the company secretary, who may be a natural person or a body corporate. As part of the new prescription by the Companies Act, among the persons qualified to be appointed a company secretary is a barrister or solicitor in good standing in the Republic of Ghana.
The directors are also mandated to appoint the first auditors of the company.
The company must choose a business name and confirm whether the company's business name is available for use.
The company must register with the Ghana Revenue Authority for the issuance of tax identification number (TIN) for its members if they don't have them already. It is an essential prerequisite for individuals to apply for and obtain TIN before registering the business.
The regulation of the company must be prepared. The regulation of the company must be signed by one or more of the initial subscribers in the presence of an independent adult witness and must state:
- The name of the company
- The company's objects or authorized business
- That the company can enter into a legally binding agreement
- The name of the first directors of the company
- That the powers of the directors are limited under the law
- The number of shares in which the company is registered
- The number of shares each subscriber will own on incorporation and the amount payable for the shares.
- A declaration that the liability of the members of the company is limited
Where the Registrar is satisfied that the application for incorporation of a company complies with this Act, the Registrar shall, after payment of the prescribed fee, certify under the seal of the Registrar that the company is incorporated and, in the case of a limited liability company, that the liability of the members is limited. From the date of incorporation, the company becomes a body corporate by the name contained in the application for inclusion. It is capable of performing the functions of an incorporated company.
For incorporation of the company to be completed, a fee (capital duty) charged at the rate of 0.5% of the company's stated share capital, and the registration fee must be submitted to the Registrar of Companies.
Registration with the Ghana Investment Promotion Centre (GIPC)
After the said certification from the Registrar Generals Department, an entity is mandated to register with the Ghana Investment Promotion Centre (GIPC) the Ghana Investment Promotion Centre Act, 2013 (Act 865). Under Act 865, foreign investors are required to comply with the minimum equity requirements. The required capital can be either in cash or in capital goods relevant to the investment; or a combination of both.
The law requires that, where all the company's equity is wholly held by the foreign investor in a company incorporated to offer services, the investor must invest a minimum of not less than FIVE HUNDRED THOUSAND UNITED STATES DOLLARS (USD500,000.00. The minimum capital requirement for a game of chance under the GIPC Act shall be US$500,000.00. This is because a game of chance can be classified as a service business. However, where the foreign investor intends to engage in the business of services and the said foreign investor has a Ghanaian partner, the foreign investor is required to invest an international capital of less than TWO HUNDRED THOUSAND UNITED STATES DOLLARS (USD200,000.00) in cash, or capital goods or a combination of both by way of equity participation and the person who is a citizen of Ghana must hold not less than 10% of the equity.
Be it as it may, the Gaming Act of Ghana makes it mandatory for a Ghanaian to hold a minimum of at least 10% of the share capital of a game of chance. Therefore, the foreign investor must invest not less than TWO HUNDRED THOUSAND UNITED STATES DOLLARS (USD200,000.00) in cash, or capital goods or a combination of both in an entity established for a game of chance.
Presently the minimum foreign capital requirement is as follows for the category of business indicated:
Wholly owned foreign business (Services):
General trading company (Trading):
The applicable fees for registration of the business are as follows:
Joint venture (i.e US$200,000.00 minimum foreign equity):
Wholly foreign (i.e US$500,000.00 minimum foreign capital):
General trading company (i.e US$1,000,000 minimum foreign capital):
Exceptions to the Minimum Capital Requirement:
- Manufacturing, export trading (locally manufactured goods) and portfolio investment businesses are exempted from meeting the minimum capital requirement.
- Foreign spouses and Ghanaians with dual nationality are also exempt from the minimum equity requirement.
Incentives and Benefits Under the GIPC Act
The GIPC Act provides for automatic incentives and benefits as follows:
- Customs Import Duty Exemptions (There are custom duties exemption for Plant, Machinery, Equipment, and parts thereof).
- Various Tax benefits (Subject to some conditions)
- Investment Guarantees (Free Transferability of Capital, Profits and Dividends and immigrant quotas depending on the amount of paid-up capital of the enterprise
- Automatic expatriate quotas (subject to some conditions). For instance, a company with a paid-up capital of up to $200,000 shall be entitled to one (1) automatic work quota, whiles a company with a paid-up capital of up to $500,000 shall be entitled to two (2) automatic work quota.
- Registration with the GIPC entitles a corporate entity to cafeteria Dispute Resolution Mechanism, including arbitration under UNCITRAL arbitration rules. Also, where there is any bilateral and multilateral investment protection agreement to which Ghana and the investor's home country are parties, the established dispute resolution mechanism shall be available to the investment. The dispute mechanism could include Investor Treaty Arbitration under ICSID Convention. The GIPC Act also afford parties recourse to any other national or international machinery for the settlement of investment dispute agreed to by the parties.
License Application from The Gaming Commission of Ghana
The Gaming Commission is mandated to license all entities seeking to operate a game of chance in Ghana. The Gaming Act, 2006 (Act 721) requires the Commission to grant a license within twelve (12) months after receipt of the application.
The following games of chance are under the jurisdiction of the Gaming Commission:
- Sports Betting
- Route Operation (Slot Machines)
- Importation and installation of Gaming Equipment
- Promotional Gaming (Games of Chance)
- Betting on Horse Racing
- Scratch Cards
Conditions for Grant of License
An entity shall qualify for a license if that entity proves to the satisfaction of the Gaming Commission the following:
- Has an identifiable office
- Has a service mark or logo registered with the Registrar of Companies.
- Has the required minimum stated capital under section 22 and has agreed to maintain and has agreed to keep the amount of cash or cash equivalent determined by the Commission under section 23 of Act 721
- Has submitted a criminal clearance certificate in respect of all the directors of the company
- Agrees to permit the Commission to have access to the records of its bank accounts and other financial records
- Has submitted a tax clearance certificate
- Is partly or wholly Ghanaian owned, and
- Has agreed to provide any other information that the Commission may require
However, the Gaming Commission shall not grant a license if any of the directors of the entity has
- Been adjudged insolvent or bankrupt and has not been discharged
- Made an assessment or arrangement or composition with creditors which has not been rescinded or set aside, or
- Been convicted by a court or tribunal of an offence involving fraud or dishonesty, and an appeal against conviction has not been brought or having been brought was withdrawn or dismissed.
Other Mandatory Institutions
An entity seeking to undertake a game of chance must also register with the following institutions to remain compliant in Ghana.
These institutions include the following:
a. The Ghana Revenue Authority
All incorporated companies are by law demanded to register with the Ghana Revenue Authority. The registration is essential for the payment of taxes. On registration and the payment of the initial tax assessment, the company shall be issued with a tax clearance certificate.
b. Register with Social Security and National Insurance Trust (SSNIT)
The Social Security and National Insurance Trust (SSNIT) is a statutory public Trust charged under the National Pensions Act, 2008 Act 766 with the administration of Ghana's Basic National Social Security Scheme. Its mandate is to cater for the First Tier of the Three-Tier Pension Scheme. The Trust is currently the largest non-bank financial institution in Ghana. The law demands all incorporated entities to register and make a contribution for their employees towards their retirement. It is a mandatory act. An entity seeking to register with SSNIT must provide the institution with the following information:
- Tax Identification Number for the company/ business entities.
- Profile of Directors or Local Managers.
- Copies of the Directors' or Local Manager's valid ID (e.g. Voter's ID, passport, driver's license).
- Directions to Taxpayer's Premises using the Ghana Post (GPS).
- List of employees with their SSNIT numbers, basic salaries, and contributions.
Once satisfied, SSNIT will issue a confirmation letter with the company's registration number and a certificate of membership to signify registration.
c. Register with the Data Protection Commission
The Data Protection Commission (DPC) is an independent statutory body established under the Data Protection Act, 2012 (Act 843) to protect individual and personal data privacy by regulating the processing of personal information. The Commission provides for the process to obtain, hold, use, or disclose personal information and other related issues bordering on personal data protection. All organizations that collect personal data from individuals must register with the Commission to have a license to collect such information and know-how to use them. The Data Protection Act 2012 established the Data Protection Commission (DPC) to protect individual and personal data privacy. The DPC's statutory powers, functions and duties derive from the Data Protection Act 2012 (Act 843) and the Constitution of Ghana 1992. All organizations that collect personal data from individuals, including entities that operate a game of chance, must register with the Commission to have a license to collect such information and know-how to use them.
d. Apply for Business Operating Permit from the Metropolitan, Municipal or District Assembly
The law demands incorporated companies to pay and obtain permits from the District, Municipal or Metropolitan Assembly where the activity of the corporate entity is centred or situated. This is also a mandatory act.
The processes for registration with the Metropolitan, Municipal or District Assembly include the following:
- Purchase of application form from the Cash Offices of the Metropolitan, Municipal or District Assembly.
- Completion of the application form and submitting it to the Revenue Mobilization Officer (RMO) at the Assembly.
- A copy of the certificate of incorporation must be attached.
- Registration Certificate from other recognized bodies as may be applicable.
- Tax clearance certificate from Ghana Revenue Authority (GRA).
Once the completed forms are submitted, a joint team from Finance Department, Environmental Health Division and City Engineer's outfit will inspect the applicant's premises within five (5) business days of submission of application. The inspection team shall subsequently recommend to the Assembly within two (2) business days from the day of their inspection. Upon approval by the Assembly, the license shall be issued to the applicant at a prescribed fee.
An entity that seeks to operate a game of chance is mandated to apply and obtain a business permit from the Metropolitan, Municipal or District Assembly where it intends to undertake its operations.
e. Open a Business Account
An incorporated entity (including a company operating a game of chance) that has meet the minimum capital requirement and issued with the GIPC Certificate shall have the right to operate a corporate account and enjoy all the benefits that come with it, including transfer of funds out of the jurisdiction. The opening of the accounts requires completing the accounts opening pack and attaching to it the registered documents of the company including the GIPC Certificate.
Tax Liabilities for Doing Business in Ghana.
It is crucial for every start-up business to understand Ghana's tax structure to aid them in fulfilling their obligation to the government.
The Ghana Revenue Authority (GRA) is the mandatory and regulatory body for assessing and collecting taxes on behalf of the Government. The Ministry of Finance (MOF) oversee the activities of GRA.
A start-up business, either a sole proprietorship, partnership or a limited liability company, should bear in mind that there are taxes on what you earn, taxes on what you buy, and taxes on what you own. In Ghana, taxes consist of Direct and Indirect Taxes. An example of direct tax is the income tax, and an example of indirect taxes are the consumption taxes/goods and service, customs and excise duties.
Direct Taxes are the taxes on what you earn which comprises of the examples below.
- Individual/Personal Income Taxes: This is levied on the wages, salaries, investments or other forms of income an individual earns. Example include Pay As You Earn (PAYE) tax.
- Company/Corporate Tax: A corporate income tax (CIT) is levied on business profits unless exempted explicitly in the law, companies (both resident and non-resident) are required to pay tax on income relating to business and investment, derived from, accrued in, brought into or received in Ghana after the necessary adjustment are made.
In Ghana, companies have to file returns four months after their accounting year, and it is also required that they make quarterly tax payment on the current year's income based on provisional assessment.
Depending on the sector, the following corporate tax are imposed by the government on some sectors.
General Corporate Business: 25%
- Capital Gains Taxes: This is a tax on the profit or gains realized on the sale or disposal of an asset either than trading inventory. Companies are required to pay tax on gains made on the realization of chargeable assets. Chargeable assets include land (which is not for agriculture in Ghana), buildings, shares, goodwill, and business assets.
Indirect Taxes are taxes levied on goods and services rather than on income or profit.
- Goods & Services/Consumption Taxes are taxes on what you buy, or services rendered to you and are taxes levied on retail sales of goods and services. It is known as the Value Added Tax (VAT), which are indirect taxes paid by consumers on some goods and services to the state through registered individuals or businesses. The current rate is 12.5%, excluding the National Health Insurance Levy (NHIL) of 2.5%, Ghana Education Trust Fund (GETFUND) levy of 2.5% and Covid – 19 Health Recovery Levies of 1%.
- Customs and Excise Duties are imposed on the importation of goods at the port of entry and certain manufactured goods produced or imported into Ghana.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.