Coming to Ghana for Business? Akwaaba ! Here are the TIPS You need to Know

What is the procedure for setting up/establishing a business in Ghana?

The Companies Code 1963 (Act 179) is the law that regulates the formation of companies in Ghana. Under this Act, investors are allowed to establish and register a place of business in Ghana. The Government of Ghana (GoG) recognizes that attracting foreign direct investment requires an enabling legal environment, and has passed laws that encourage foreign investments, and replaced some that previously stifled it. One of such laws is the Ghana Investment Promotion Center (GIPC) Act, 1994 (Act 478). Under this Act, investors are free to set up investment projects in all sectors of the Ghanaian economy, without prior approval by the GIPC, with the exception of the mining, petroleum, and free zones sectors, as well as portfolio investments. Investments in the mining and petroleum sectors require approval or licensing by the Minerals Commission and the Ministry of Mines and Energy respectively. Free Zones (Export Processing Zones) investments must be approved by the Ghana Free Zones Board, while portfolio investments are handled by the Ghana Stock Exchange. Sector-specific laws further regulate banking, non-banking financial institutions, insurance, fishing, securities, and real estate. Foreign investors are required to satisfy the provisions of the investment act as well as the provisions of sector-specific laws.

The following steps are involved in the establishment of investment projects in Ghana:

STEP 1 Submit an application form for the registration/incorporation of a company at the Registrar General's Department. Application formalities at this department may be completed within 5 working days if all documentation is in order.

STEP 2 Foreign investors must comply with the GIPC Act 478's minimum equity requirements as follows:

Joint Venture - US$10,000.00
100% Foreign-Owned - US$50,000.00
Trading companies either wholly or partly-owned by non-Ghanaians require a minimum foreign equity of USD $300,000.00, and must employ at least ten Ghanaians. The minimum capital requirement does not apply to portfolio investments, enterprises set up for export trading or branch offices.

2 corporate bank accounts (i.e. foreign and local) must be opened with a local bank of the investor's choice.

A bank-to-bank transfer of the minimum equity requirement must be effected, and the transaction confirmed to the Bank of Ghana by the investor's local bank. Bank of Ghana in turn confirms transaction to GIPC for the company's registration purposes.

If the investor prefers to carry physical cash into Ghana for investment purposes, this must be declared upon arrival using Bank of Ghana Form T5, and must subsequently be deposited in a local bank account within the shortest possible time. This transaction must be confirmed by the investor's bank and Bank of Ghana as in (b) above.

In the case of equity in kind in the form of imported machinery, equipment and goods, all documentation covering such imports must bear the name of the registered company, and must be submitted to the GIPC as evidence for registration purposes. Such documentation should include the following:

Bill of Lading/Airway Bill (originals only)
Destination (Ghana) Inspection Certificate
Original Customs Bill of Entry
Import Declaration Form (IDF)
Certified/Final Invoices
Evidence of Capitalization Form 6 from the Registrar General's Department.

Depending upon the area of investment, the investor is required to register with some oversight agencies. The Ghana Investment Promotion Center may assist directly or indirectly by referral to accredited public agencies or accounting and legal firms in this process.

STEP 3 The investor registers with the GIPC (after paying the relevant fees), which has 5 working days to complete the registration process, providing all required documentation is in order. 100% owned Ghanaian enterprises do not need to register with the GIPC since they are exempt from the minimum foreign capital requirement.

STEP 4 All enterprises, including wholly Ghanaian-owned and those with foreign participation seeking immigrant quota facilities in respect of expatriate employees for their businesses must satisfy the appropriate minimum capital requirements specified under section 30 of Act 478. Immigrant quota requests must be made by a formal letter to the GIPC.

STEP 5 All enterprises must register directly with the Internal Revenue Service (IRS) and with the Value Added Tax (VAT) Secretariat for purposes of statutory taxes, rebates or exemptions thereof.

STEP 6 Enterprises seeking to engage in manufacturing must register with, and obtain an environmental permit from the Environmental Protection Agency (EPA).

SOURCE: GHANA EMBASSY IN WASHINGTON DC