| Requirements For Foreign Investment / Joint ventures: |
An entrepreneur, irrespective of nationality can set up a business enterprise in Ghana in accordance with provisions of any of the following legal instruments: The companies Code, 1963 (Act 179); The Partnership Act, 1962 (Act 152); The Business Name Act, 1962 (Act 151).
1. Foreign Investment:
Foreigners are permitted 100% ownership of an enterprise provided the investor satisfies section 19 (2b) of the Ghana Investment Promotion Council (GIPC) Act, 1994 (Act 479). Wholly foreign-owned enterprise must have a minimum paid up capital, the equivalent of US$50,000 in all areas of economic activity except import trading, where minimum capital requirement is US$300,000. In the case of export trading and liaison (external) offices, there is no minimum foreign equity requirement. Foreign investors are required to register with GIPC.
2. Joint Venture:
A foreign investor may team up with Ghanaian partner for a joint venture, usually in the form of a partnership or a limited company. However, under Ghana Investment Promotion Centre Act, 1994 (Act 478) a minimum equity capital of US$10,000 is required in any area of economic activity, except trading which requires a minimum equity capital of US$300,000. In the cases of export trading (external) offices, there is no minimum foreign equity requirement. The foreign shareholder is required to satisfy this minimum equity capital either in cash transferred through Ghana's banking system or its equivalent in the form of goods, plant and machinery, vehicles or other tangible assets imported specially and exclusively to establish the enterprise.
3. External Company:
A body corporate formed outside Ghana with an established place of business in Ghana must deliver to the registrar of companies an n English translation of a certified copy of Charter, status, regulations, memorandum and articles or other instrument constituting or defining the constitution of the company. An external company may invite the Ghanaian public to subscribe to its shares, subject to its complying with requirements of the Companies Code concerning invitations and prospectus as if it were a Ghanaian company. The Registrar, however, has the discretion to waive or modify parts of these requirements.
Expatriate Employment:
Automatic quotas tied to Investment Capital are as follows: 1 quota - US$ 10,000 to under US$ 100,000 paid-up capital; 2 quotas - US$100,000 to under US$500,000 paid-up capital, 4 quotas - US$500,000 and above paid-up capital.
In order to register a company the following documents and details must be submitted to the Registrar-General:
- Name and address of company
- Names, addressees, nationalities and occupation of its first directors and company secretary
- The nature of the company's business
- A statement that the company possess all the powers of a natural person of full capacity
- A statement that the liability of the company is limited
- The share capital and its division into shares of no par value
- Any other lawful provisions relating to the constitution and administration of the company
Limited Liability companies must file annual returns with the Registrar of companies showing its audited balance sheet and profit-and-loss statement after 18 months of incorporation.
Investment opportunities exist in Ghana in the following:
- Agriculture (Cassava, Cotton, sorghum, Soya Beans, Oil Palm, Pine apples, etc.)
- Agro-processing (Cocoa, fruits, Vegetables, etc.)
- Information and Communication Technology.
- Mining (Gold, manganese, Bauxite, Salt)
- Services (Financial, Health, Educational)
- General Infrastructure (Agriculture and Industrial Estates, Roads, Railways and ports)
- Real Estate Development
- Fisheries
- Waste management (including recycling of Plastic and Polythene materials)
- Privatization of State Owned Enterprises.
Prospective investors should obtain competent professional advice on the type of company which may best meet their needs. Such an advice is obtainable from: The Registrar-General, Registrar-General's Department, P.O. Box 118, Accra, Ghana. Tel: (233-21) 662 043/ 664-691. |
| Tax Incentives: |
Corporate Tax:
Tax rate of 25% for all companies except:
- Hotels - 25%
- Income from non-traditional exports - 8%
- Income derived by a Financial Institution from a loan granted to a farming enterprise -20%.
- Income derived by a Financial Institution from a loan granted to a leasing company for the funding of acquisition of assets for lease - 20%.
- Income derived by a company listed on the Ghana Stock Exchange - 30 %.
- Relief from double taxation for foreign investors and employees
Tax Holidays (from start of operation):
- Real estates 5 years, Rural Banks 10 years, Tourism - 3 to10 years
- Agriculture: Cocoa production indefinite, Cattle ranching - 10 years, Other livestock and poultry - 5 years, Others 5 to10 years
- Agro-processing -5 years, payment of VAT on imported raw materials is zero rated.
- Waste processing (including plastics and polythene) - 7 years
- Free Zones Enterprise/development 10 years and maximum 8% thereafter.
- Air and Sea transport (non-resident) - income tax exempt.
Location Incentives (Tax rebates):
- Location of manufacturing companies in regional capitals other than Accra and Tema - 25%, elsewhere - 50%.
- After the initial 5-year tax holiday period, agro-processing enterprises, which use local agricultural raw materials as the main inputs, shall have corporate tax rates fixed according to their location as follows: Accra-Tema - 20%, Other regional capitals (except Northern, Upper East and Upper West Regional Capitals) - 10%, Outside Regional Capitals - 0%, Northern, Upper East and Upper West Regional Capitals - 0%.
Carry Forward Losses:
- All companies except mining and insurance can carry forward losses for 5 years.
- Insurance companies can carry forward losses indefinitely
- For mining companies, losses are carried forward indefinitely but restricted to capital allowance granted for the year.
Industrial plant machinery and parts thereof are exempted from custom import duty.
Investment Guarantees:
- Constitution (Act 478) guarantees protection from arbitrary deprivation of property and guarantees compensation
- Investment laws (GIPC Act 478) guarantee 100% transfer of profits, dividends, etc in freely convertible currency and remittance of proceeds (net of all taxes and other obligations) in the event of sale or liquidation of the enterprise or any interest attributed to the investment.
- Multilateral Investment Guarantee Agency (MIGA) membership
- Bilateral Investment Promotion treaties
The Ghana Investment Promotion Centre (GIPC) is the government agency established to encourage, promote and facilitate investment in all sectors of the economy, except mineral and mining business, petroleum business, portfolio investments, free zone activities and privatization of government enterprises. GIPC provides one-stop approval and facilitation services for investment in Ghana. For further information contact: The Chief Executive, Ghana Investment Promotion Centre, P.O. Box M 193, Accra- - Ghana. Tel (233 21) 665 125-9; Fax: (233 21) 663 801; Email: info@gipc.org.gh; Website: http://www.gipc.org.gh
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| Free Trade Zones: |
Ghana's Free Zone (GFZ) programme is designed to promote processing and manufacturing of goods through the establishment of Export Processing Zones (EPZ) and Industrial parks. Focus is also placed on development of commercial activities at sea and airports The programme is also completely private sector driven with government providing legal and policy framework and physical infrastructure.
There are 3 EPZ under government ownership. However, Free Zone enclaves and enterprises can be located anywhere in Ghana upon approval of the GFZB. Tema Export Processing Zone, the flagship of GFZ Programme is located close to the largest seaport in Ghana and about 24 km from Ghana's International Airport. The Tema EPZ, with a total of 1,200 acres (480 hectares), offers investors a favourable and conducive environment for manufacturing, service and commercial export activities.
Incentives provided to investors under the Free Zone Act (1990) include: 100% exemption from payment of direct and indirect duties and levies on all imports for production and exports; 100% exemption from payment of income tax on profits for 10 years and 8% thereafter; total exemption from payment of withholding tax from dividends; relief from double taxation for foreign investors and employees; no import licensing requirements;100% ownership by any investor; no condition or restriction on repatriation of dividends or net profit; no payment for foreign loan servicing, fees and charges for technology transfer agreements; investments guaranteed against nationalization and exploitation. For further information contact: The Chief Executive, Ghana Free Zones Board, 5th Link Road East Cantonments, P.O. Box M 626, Accra - Ghana. Tel: (233-21) 780 535 / 785 037 / 8; Fax: (233-21) 780 536 / 780 537. Email: gfzbes@ghanatel.com.gh; info@gfzb.com Website: http://www.gfzb.com |