Ghana is one of the fastest growing economies in Sub-Saharan Africa. There is a growing population, flexible government policies and structures for foreigner investors and strong labour force to work. It can be enticing as a foreigner in Ghana to get started with a business without going through the due process. To save you a fortune, we have put together the five (5) critical steps you must never skip, doing business in Ghana as a foreign investor.
STEP #1: YOU FIRST HAVE TO REGISTER YOUR BUSINESS AT THE OFFICE OF THE REGISTRAR OF COMPANIES
- You could register your business under any of the three types
of business entities in Ghana. These are Sole Proprietorships,
Partnerships and Companies.
- For sole proprietorships, an individual owns and controls the business. There is no distinction between the business and the owner. The only thing the business owner is required to do is register the business name if the business name is different from the business owner's name.
- Ghanaian law allows for the creation of Incorporated Private Partnerships. These partnerships, when incorporated, essentially have similar rights and powers as companies, except that individual partners are liable without liability for the debts and obligations of the firm. The maximum number of partners allowed in a partnership firm in Ghana is 20 partners.
- There are four types of companies in Ghana. These are as
- Companies limited by shares:
- Companies limited by guarantee:
- Unlimited liability companies
- External companies.
- After the incorporation/registration of any of these business forms mentioned above, the Office of the Registrar will provide the requisite certificate of incorporation/registration within five(5) working days if all information/documents supplied to them are in the right order.
- Some of the documents you will need to complete registration at the Office of the Registrar include the following:
- Tax Identification Number (TIN)
- Partnership Agreement (in the case of a partnership)
The completion of the required business registration form
STEP #2: YOU HAVE TO OBTAIN GIPC REGISTRATION
- After incorporation/registration of your business, you will be required to register with the Ghana Investment Promotion Centre (GIPC) if you are a foreign investor.
- Foreign investors are, by Ghanaian law, mandated to register with the GIPC, the Ghanaian government agency responsible for investment. Specific requirements have to be met before a foreign investor can commence business in Ghana and be registered with the GIPC:
- If you are a foreign investor and intend to operate a 100% owned business in Ghana, the law requires that you bring an amount of US$500,000.00 into the country. This amount can be brought into the country in cash or goods or a combination of cash and goods. This amount is the minimum foreign equity capital requirement required for businesses that are 100% foreign-owned.
- If you are a foreign investor and you want to set up a business in Ghana jointly with a Ghanaian national, the law requires that you have to bring into the country an amount of US$200,000.00. This amount can be brought into the country in cash, goods, or a combination of cash and goods. The law further requires that for joint ventures, the Ghanaian partner should have at least 10 per cent equity participation in the joint enterprise.
- If you are a foreigner and you want to engage in trading in Ghana, the law requires that you bring into the country an amount of US$1 million. The law defines trading to include the purchasing and selling of imported goods and services. This amount can be brought into the country in cash or goods or a combination of cash and goods. The law further requires a foreign trading enterprise to employ at least 20 skilled Ghanaians.
- To meet the minimum capital requirements to invest in Ghana by bringing money into the country, you would first have to open two bank accounts in Ghana (a foreign account and a local account) with any bank in Ghana. The money would have to be transferred into Ghana into the foreign account and converted into Ghana Cedis. Your local bank will then be required to notify the Bank of Ghana that you have brought in money to meet the minimum capital requirements. The Bank of Ghana will then notify the GIPC that you have brought in the required amount to meet the minimum capital requirements.
- If you intend to use capital goods to meet the minimum capital
requirements needed to do business in Ghana as a foreigner, such
goods, imported machinery, and equipment must be in the name of
your business, and all documents covering the importation of such
capital goods should be in the name of your business. The following
are some of the documents you can use to prove to the GIPC that you
have brought in capital goods to meet the minimum equity capital
- Certified/Final Invoices of the capital goods
- Destination Inspection Certificate
- Import Declaration Form (IDF)
- Original Custom Bill of Entry
- Bill of Lading/Airway Bill
- You will, however, be exempt from meeting these minimum capital requirements if your business will be engaged in manufacturing or export trading. Export trading has been defined as the export of goods or products that originate from Ghana. If you are a portfolio investor, you are also exempt from meeting the minimum foreign equity capital requirements.
- If you are a foreign investor and have been married to a Ghanaian citizen for a continuous minimum period of five (5) years, you may be exempt from meeting the minimum foreign equity capital requirements if you meet certain requirements. If you are a foreign investor who has lost your Ghanaian citizenship, you will also be exempt from meeting the minimum foreign equity capital requirements.
- If all your documents are in order and the minimum capital requirements have been met, the GIPC has five (5) statutory working days to register your business.
STEP #3: YOU HAVE TO REGISTER WITH THE GHANA REVENUE AUTHORITY AND THE PENSION AUTHORITIES
- Ghana's taxation laws provide that every business liable to taxation must register with the Ghana Revenue Authority (GRA) as a taxpayer. Therefore, if you are a foreign investor doing business in Ghana, you must comply with the law.
- Ghana's pension laws also require all companies and businesses to register that every business must register with the Social Security and National Insurance Trust (SSNIT), Ghana's statutory public trust. You will also be required to make contributions to the mandatory pension schemes in accordance with the law.
STEP #4: IF YOU WILL EMPLOY EXPATRIATES, YOU HAVE TO APPLY TO THE IMMIGRATION AUTHORITIES FOR WORK PERMITS
- One of the incentives that foreign investors may be entitled to upon registration at the GIPC is the granting of automatic expatriate quotas. This automatic expatriate quota is an indefinite work permit slot given as an investment incentive. The maximum number of slots that any business may be entitled to is four (4) quotas. The number of automatic expatriate quotas that your business may be entitled to depend on your business' paid-up capital.
- If your business does not qualify for these expatriate quotas, you can still apply for regular work permits at Ghana's Immigration authorities.
STEP #5: OBTAIN SECTOR-SPECIFIC CERTIFICATIONS AND PERMITS
Every sector in Ghana has its own required licenses, permits and certifications for operation. Prior to starting or commencing your business operation, you will need to go through the due process to obtain your sector's certifications, permits or licenses. If you bypass this process, it may come back to bite you. We have written about how to obtain each sector license, permit, or certification, you might want to read through or simply contact our office for assistance.
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.