trade & investment

TRADE AND INVESTMENTS

The thrust of the Governments policy directive is on:

A liberalised trade (import/export) regime within the spirit and principles of the World

Trade Organisation (WTO).

Liberalised investment regime sustained by a targeted investment drive;

An export oriented, value-addition industrial development strategy;

Free zone development encompassing:-

o factory specific and export processing zones (EPZ)

o liberalised skies

o free ports

o

Investment Procedures

Under the Ghana Investment Promotion Centre Act, 1994 (Act 478), investment projects in all

sectors of the economy, other than the mining and petroleum sectors, can be established without

prior approval of GIPC. Mining and petroleum sector projects have to be approved or licensed by

the Minerals Commission and the Ghana National Petroleum Corporation, respectively. All

investors intending to invest in Ghana should first register as business entities (limited liability

company, partnership, sole proprietorship, etc.) with the Registrar-Generals Department under the relevant laws.

Enterprises with foreign participation i.e, joint ventures and wholly foreign-owned enterprises,

must complete application forms from the GIPC (Ghana Investment Promotion Centre) for the

purposes of registering the actual minimum foreign capital requirement (as evidenced by bank

transfers in the case of cash transfers) and customs entry forms for investment goods. GIPC has

five working days to complete this formality if registration documents are received in good

order. Wholly Ghanaian-owned enterprises do not need to register with GIPC since the minimum

foreign capital requirement does not apply to such enterprises. All wholly Ghanaian-owned

enterprises and enterprises with foreign participation seeking immigrant quota facilities in

respect of expatriate personnel (expert) for their business should satisfy the relevant minimum

capital requirements specified under section 30 of Act 478.

Enterprises seeking exemption from import duties and related charges should send invoices for

clearance directly to CEPS, which will automatically clear all such investment capital goods and

parts thereof as zero-rated (duty free) in their tariff code. A list of all such zero-rated investment

capital goods and parts thereof is available at GIPC. In addition, all enterprises must deal directly

with the Internal Revenue Service with respect to the enjoyment of tax incentives in relation to

their investments. A list of such investment-related tax incentives is available at GIPC.

GIPC assists all enterprises in their dealings with government officials, providing advice as well

as serving as a facilitator to ensure unimpeded establishment and operation of business in Ghana.

Notice to Prospective Investors

Ghana is an ideal location to do business and all prospective investors are

welcome and, are indeed given the necessary assistance to establish and

operate their business.

For the avoidance of doubt, all prospective investors and foreign business

collaborators are hereby advised to, in the first instance, deal with the under-

listed official channels in exploring business opportunities and/or establishing

operations in Ghana.

For information on investment opportunities, registration of

projects involving foreign participation, and general investment:

The Chief Executive,

Ghana Investment Promotion Centre,

P.O. Box M193, Accra

Tel: 233 (21) 665125-9,

Fax: 233 (21) 663801,

E-mail address: [email protected]

For export business especially in non-traditional export sector:

The Executive Secretary,

Ghana Export Promotion Council,


Tel: 233 (21) 228813 or 228830,

Fax: 233 (21) 668263 or 233725,


For investment and trade in Ghanas Free Zones:


Ghana Free Zones Board,

P.O. Box M47, Ministries Accra

Tel: 233 (21) 780532-5,

Fax: 233 (21) 780536,


For the verification of authenticity and rating of business in

Ghana:

The Registrar-General,

Registrar General Department,

P.O. Box 118, Accra

Tel: 22 (21) 664691,

Fax: 662043

For stock Market Operations:

The Managing Director,

Ghana Stock Exchange,

Cedi House, Liberia Road,

P.O. Box 1894, Accra

Tel: 233 (21) 669908/669914/66935,

Fax: 233 (21) 669913.


For mining concessions and operations:


Minerals Commission,


Tel: 233 (21) 772783,

Fax: 233 (21) 773324.


For the purchase of gold/diamonds:

The Managing Director,

Precious Mineral Marketing Company,


Tel: 233 (21) 664931-4,

Fax 233 (21) 662586

For wood and wood products:

Managing Director,

Timber Industry Development Division (TIDD),

P.O. Box 515, Takoradi

Tel: 233 (31) 22921-3,

Fax: 233 (31) 23339

For cocoa and cocoa products:


Ghana Cocoa Board,

P.O. Box 933, Accra

Tel: 233 (21) 221212,

Fax: 233 (21) 667104

For divestiture of State Owned Enterprises (SOE):


Divesture and Implementation Committee,

P.O. Box C102, Cantonments, Accra

Tel: 233 (21) 772049, 773119, 760281,

Fax 233 (21) 773126,


For trade exposition:

Ghana International Trade Fair Limited,

P.O. Box 111, Trade Fair Centre, Accra

Tel: 233 (21) 776611-5, 772376,

Fax: 233 (21) 772012,

E-mail address: stfc

For Business Associations:

1. The President, Ghana National Chamber of Commerce, P.O. Box 2325, Accra

Tel: 233 (21) 662427,

Fax: 233 (21) 66221

1. The Chief Executive, Ghana Chamber of Mines,

P.O. Box 991, Accra

Tel: 233 (21) 760652,

Fax: 233 (21) 771500,


1. The Director-General, Private Enterprise Foundation, P.O. Box C1671, Cantonments, Accra

Tel: 233 (21) 7715056,

Fax: 233 (21) 771500,


2. The President, Federation of Association of Ghanaian Exporters, P.O. Box M124, Accra

Tel/Fax: 233 (21) 232726, 232554,


3. The President, Association of Ghanaian Industries, P.O. Box 8624, Accra-North

Tel: 233 (21) 777283,

Fax: 233 (21) 773143,


Procedures for Exportation of Gold and Purchase of Diamonds

Gold

The gold to be exported shall be a minimum weight of 50Kgs.

The mineral to be exported shall be sealed in the premises of Precious

Minerals Marketing Company (PMMC) and in the presence of

Customs Officials, PMMC representatives and that of the agent. After

sealing, the Gold will be kept in the vault of PMMC awaiting export.

PMMC will supply the agent with assay certificates to determine the

purity of gold being exported.

All Bank of Ghana and Customs, Excise and Preventive Services

(CEPS) export documents will be completed by the Agent

inconjunction with PMMC (and the agent's Bank where necessary).

The agent shall nominate a carrier and provide all relevant flight

details to PMMC 24 hours before export.

Transportation of gold will be done from PMMC premises

accompanied by the agents representative to the carrier.

Cost of Insurance and Freight will be borne by the agent.

The agent will undertake to ensure that the export value of the gold

Dore Bars being exported is repatriated to Ghana according to the

London (AM) Gold Fix on the day the Gold is shipped.

Funds relating to all transanctions will be transferred through PMMC's US

Dollar account with the Bank of Ghana.

The agent is responsible for arranging a market overseas. Marketing

contracts to be executed by the agent shall be subject to the approval

of the Bank of Ghana or Minerals Commission.

PMMC will export the Gold using its License to the address given by

the agent.

The agent will incur a fee of not more than 0.5% of the value of the

gold for each and every shipment, payable before or on the day of

export to PMMC. This excludes smelting and assay charges which are

separate.

PMMC agrees to smelt and or assay gold at the request of the agent. The fees

payable for such services are:

Assaying - $50 per bar

Smelting - $20 per kg gold

Diamonds

Application forms for Licenses to purchase Diamond may be obtained

by any foreign company and/individuals from the PMMC. Completed

forms must be returned to the Managing Director of PMMC with a

non-refundable fee of USD$100.

Processing of application forms requires a confidential status report on

the company. Whilst this is being done, a temporary license may be

issued not exceeding six months. A company so issued with a

temporary license may commence purchase of rough diamonds only

upon the payment in full US$1,000 per month for the period approved

and an up-front payment transfer of not less than USD$250,000 is

required. All unutilized funds will be transferable. Fees for permanent

Licenses are US$12,000 per annum. This is renewable every year.

Permanent license holders are required to purchase not less than

US$150,000 worth of diamonds per month.

All buying agents are provided with an office at Diamond House with

basic office furnishing for the purpose of buying rough diamonds.

A temporary or permanent buyer must engage resident valuer(s) to

purchase the rough diamonds by negotiating directly with local

winners and agents alongside other buyers at competitive prices.

All purchasing activity must be done in this office at Diamond House

and not at the mining sites.

Rough diamonds purchased by License Buying Agents are kept in a

special box at the end of each working day and transferred to PMMC

for security safe keeping until required by the agent.

A commission of not more than 3% on the export value of rough

diamonds shipped at the request of the agent to a designated address is

paid to PMMC.

A license will be withdrawn immediately for the following reasons:

1. Inactivity for a period exceeding 21 days without prior notice 2. Buying diamonds outside the premises 3. Infringement or violation of Ghana's Mining Laws 4. An official adverse report on the status of the company 5. Buying malpractice including dealing with solely selected

agents/winners

Using the office for other purposes other than buying diamonds

Enquiries

The Managing Director

Precious Minerals Marketing Corporation

Diamond House

P O Box 108

Accra

Ghana

Tel: +233 21 664931-4

Fax: +233 21 662586

Telex: 20-5-Dimond GH

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Ghana Economy

The Ghana Economy

Ghana, rich in agricultural resources, timber, gold and other valuable minerals, abundant with

educated, skilled and enterprising people, blessed with a stable form of government and

dedicated to the principles of free enterprise, has long been seen as one of Africas most promising countries.

The main exports - gold, cocoa, diamonds, timber, manganese and bauxite - known as

traditional items, are now increasingly supplemented by processed and semi-processed industrial and agricultural products with tourism as the third largest foreign currency earner after

cocoa and gold.

The economy of the country is based on two distinct sectors:

A large, traditional Sector (principally agricultural and informal activities)

A relatively small, labour intensive industrial and service sector

The economy has traditionally depended on exports of primary products, with about 60 per cent

of the labour force employed in agriculture. Agriculture contributes about 46 per cent to the GDP

and is characterised by small-scale operations, principally staple food crops and cocoa

productions. The services sector is the second largest employer (about 25 per cent of the labour

force), accounting for over 40 per cent of real GDP from trade and public sector services, while

the industrial sector accounts for 14 per cent of GDP and employment.

Over the years, a series of comprehensive macroeconomic and structural adjustment reforms

aimed at reversing the economic decline were undertaken. The reform programme included

restructuring of institutions, diversifying the economy, balancing the national budget, liberalising

trade and currency and attracting direct private investments.

Advantages for Relocating In Ghana

A stable political environment, with established democratic institutions and systems to

ensure good governance.

Abundant, adaptable, easily trainable and cost-effective labour force.

Excellent sea and air connections with Europe and the USA.

A strategic and central location within the West Africa sub-region providing access to a

total market of around 250 million people.

A dynamic private sector willing to collaborate with foreign partners.

A high degree of personal safety.

Investment Opportunities

Resource-based activities in agri-business, agro-processing, i.e. fish, fruit, vegetable,

wood products, minerals processing, - gold, diamond and salt, export manufacturing and

tourism.

Real Estate Development.

General infrastructure: Agriculture and industrial estates, toll roads and highways,

railways and ports, sea and air services.

Development and operation of export processing zones.

Incentives

All sectors are open to foreign investment and 100% foreign ownership:

Corporate Tax - 8% on export income from the non-traditional export sector, 25% for

Hotels and 35% for all other sectors.

Location incentives: Tax rebates for manufacturing in certain locations.

Tax Holidays: ranging from 3 to 10 years for sectors such as agricultural processing, real

estate and rural banking.

Other tax concessions such as accelerated depreciation for plant and building

expenditure, 5 years Loss Carry-Over in all sectors, and fully deductible Capital

Expenditure for R&D.

Custom Duties: 100% exemption for plant, machinery, equipment and parts thereof.

Guarantees

MIGA membership and Bilateral Promotion and Protection agreements protect your

investment.

GIPC Act 1994 (Act 478) guarantees 100% transfer of profits, dividends, fees etc.

Immigrant quotas are automatic depending on paid-up capital.

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Trade & Industry Policy

Trade and Industry Policies

Trade and Industry Policies The Ministry of Trade and Industry is pursuing trade and industry measures which ensure a

stable policy environment for achieving a neutral status for Ghanaian industry, for export

development and promotion, an outward orientation of the economy, and the enhancement of

inter-sectoral co-ordination. Harmonisation and rationalisation of trade and industry polices are

on-going.

Trade Sector Policies

In implementing medium-term policies in the trade sector; account is taken of Ghanas objectives of participating fully in the globalised market, the rationalisation of tariffs, and the

promotion of intra regional trade.

Policies are therefore being pursued within the framework of national macro-economic

objectives and strategies that take account of the opportunities presented by the Uruguay Round

results and other multilateral trade agreements.

In the medium term, trade sector policies that are the focus of attention are:

creation of a buoyant and self-sustaining export sector

expansion of domestic trade thereby ensuring the countrywide availability of goods at

reasonable prices

pursuit of efficient and effective import management practices

adoption of anti-monopoly legislation and other regulations to protect the consumer

pursuit of anti-dumping policies in international trade through rationalisation of all tariff

and the identification of all non-tariff barriers to trade

active and effective participation in multilateral trade for a secure increased market

access for Ghana's exports especially processed and semi-processed goods and to achieve

stable, fair and remunerative prices for commodities of export interest in Ghana.

Industrial Sector Policies

The thrust of the industrial policy is the promotion of an accelerated and sustainable industrial

development within a liberalised and global economic environment. Long-term policy objectives

in the main are:

increasing industry share of GDP to 37% (by 2020) from the current level of 16% with an

average growth rate of 12%

making Ghanaian manufactured goods competitive in the domestic and international

markets

establishing effective linkages between manufacturing, agriculture, education, services

and other relevant sectors

ensuring that all industrial operations are environmentally friendly

securing increased domestic and foreign private investment in industry

maximising the use of local raw materials in the industry

Medium term objectives consist of:

Restructuring the industrial sector and rehabilitating major industries, including

expansion, diversification and modernisation of existing viable enterprises and

enhancement of their competitiveness.

Promoting the establishment of new industrial capacities and environmentally sound

industrial operations, including increased investment, development and acquisition of

appropriate technologies in the following areas:

1. food and agro-based industries, as well as forest industries 2. building and construction industries 3. metallurgical industries 4. engineering industries, especially electrical and electronic industries 5. textiles/garments and leather industries 6. chemical industries 7. energy-related and environmentally friendly industries 8. packaging industries

Promoting the local indigenous private sector and involving both local and foreign

private enterprises to a greater degree in the industrial development of the country.

Enhancing Ghana's international competitiveness in goods and services through

standardisation.

To enhance the achievement of these objectives, considerable emphasis is placed on capacity-

building, promotion of women in industry, self-employment through entrepreneurial

development, and micro and small enterprises development.

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Setting up Business in Ghana

Setting Up Business in Ghana

Notice to Prospective Investors An entrepreneur, irrespective of nationality, can set up a business enterprise in Ghana in

accordance with the provisions of any of the following legal instruments:- The Companies Code,

1963 (Act 179); the Partnership Act, 192 (Act 152) and the Business Name Act, 1962 (Act 151).

A foreign investor may team up with a Ghanaian entrepreneur or company for a joint venture,

usually in the form of a partnership or a limited company. However, under the Ghana Investment

Promotion Centre Act, 1994 (Act 478), a minimum equity capital of US$10,000 is required from

any foreign investor who intends to enter into a joint venture partnership with a Ghanaian. 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.

Foreigners are permitted 100-per-cent ownership of an enterprise provided he/she satisfies

section 19 (2b) of the GIPC Act, 1994 (Act 478). Wholly foreign-owned enterprises must have a

paid-up capital the equivalent of US$50,000.

Application for registration of a company is made directly, or through agents or solicitors, to the

registrar-general. A company is duly registered after the companys regulations have been submitted to the registrar of companies and a certificate of incorporation issued. A specified fee

is paid on presentation of the regulations. The information required includes the name of the

company with the word Limited as the last word in the name; the nature of the companys business; names of the directors of the company and the shares capital and its division into shares

of no par value.

External Companies

An external company is a body corporate formed outside Ghana but which has an established

place of business in Ghana. This can take the form of a branch, management, share, transfer,

registration office, factory, mine or other fixed place of business, but does not include an agency

unless the agent is authorised to negotiate and conclude contracts on behalf of the outside

company.

Within one month of the establishment of the place of business, the external company should

deliver to the registrar of companies the following: an English language translation of a certified

copy of the charter, statutes, regulations, memorandum and articles or other instrument

constituting or defining the constitution of the company; nature of business or main objects;

name, address and business occupation of the local manager authorised to manage the business

in Ghana; number of authorised shares, amount paid and what is remaining payable in cash or

otherwise and address of its registered or principal office in the country of its incorporation;

address including post office box number of its principal place of business in Ghana; name and

address in Ghana of a person authorised by the company to accept service of process and other

documents on its behalf, particulars and copies of any charges on the property of the company or

if no such charges, then statement to that effect.

On receipt of the documents, they are registered in the Register of External Companies and the

particulars gazetted.

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 the prospectus

as if it were a Ghanaian company. The registrar, however, has the discretion to waive or modify

parts of these requirements.

Annually, or at intervals not exceeding 15 months, the external company must submit for

registration, a profit-and-loss account and balance sheet (as in the limited liability return of

accounts).

Alterations made in the charter, statutes, regulations, articles or other instruments used in

registration should be delivered to the registrar within two months of the effective date of the

alteration.

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Free Zone - Incentives

Free Zone - Incentives To implement the government's policy of attracting investments, the following incentives

have been provided under the Free Zones Act 404 1995.

Duty

100% exemption from payment of direct and indirect duties and levies on all imports for

production, and export from the free zones.

Taxation

Free-Zone enterprises are granted 100% exemption from income tax on profits for 10

years, after which the tax rate shall not exceed 8%.

Relief from double taxation for foreign investors and employees

Customs Incentives

No import licensing requirements, with minimal customs formalities.

Zone Ownership

100% ownership of shares by investor (foreign or national) in a free-zone enclave and

enterprise.

Capital/Profit Repatriation

No conditions or restrictions on repatriation of dividends or net profit;

No conditions or restrictions on payments for foreign-loan servicing;

No payments of fees and charges for technology transfer agreements;

No conditions or restrictions on the remittance of proceeds from the sale of any

interest in a free-zone investment.

Management of Foreign Currency

Free-zone investors are permitted to operate foreign currency accounts with banks in Ghana.

Sales to Local Market

Up to 30% of annual production of goods and services of a free-zone enterprise are authorised

for sale in the local market.

Investment Guarantees

Free-zone investments are guaranteed against nationalisation and expropriation.

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Investment in Oil & Gas

Investments in Oil & Gas, and Energy The discovery of oil and gas in commercial quantities offshore Ghana in recent years has

generated a lot of interest in the oil and gas sector. The Petroleum (Exploration and Production)

Law, 1984 (PNDCL 84), sets out the policy framework and describes the role of the Ministry of

Energy, which regulates the industry. The Ghana National Petroleum Corporation (GNPC),

which is empowered to undertake petroleum exploration and production on behalf of the

Government, is authorized to enter into joint ventures and production-sharing agreements with

commercial organizations. GNPC was established under the GNPC Law of 1983 (PNDCL 64).

Between 2002 and 2008, 12 acreages were awarded to 10 oil and gas companies for petroleum

exploration and production in Ghana. Significant discoveries have been made by a number of

the exploration drillings that have been taken place offshore Ghana. Currently investment

opportunities exist in the gas sector and the entire downstream sector of the industry.

Under the sub-sector of electricity, prospective independent power producers are being

welcomed for the development and operation of additional power generation units under very

clear policy frameworks. Ghana currently has an installed capacity of 1925 MW, representing a

hydro and thermal mix and an additional 1615 MW capacity of generation is also underway. Of

the generation capacity under development a significant number represents IPPs. The policy

goal of the Government of Ghana is to have a minimum generation capacity of 5,000 MW by

2015 and so IPPs are being aggressively incorporated in the programme to assure energy

security. It needs mentioning that because of the West Africa Power Pool Project, which links

the grid of Ghana and a number of energy deficit neighbouring countries, virtually all energy

generated has a ready market in the sub-region.

In consonance with government commitments to ensure transparency in the oil and gas industry,

the under-listed simplified steps have been designed as a guide to prospective investors in the

industry.

PROCESS FOR ACQUIRING A BLOCK FOR EXPLORATION

Step

1:

Ministry of Energy (Receipt of Letter of Interest)

& Applicant invited to make presentations

Step

2:

(GNPC) Applicant inspects on the available blocks/contract area

data at the GNPCs data room

Step

3: (Ministry of Energy/GNPC) Applicant picks up forms

Step

4:

Ministry of Energy (Receives application with an application fee

of UD $7500)

Step

5:

Ministry of Energy & GNPC

Vetting and Evaluation of the Application

Step

6:

Governments Negotiation (MoEn, GNPC, AGs Dept. MoFEP) Negotiate a Petroleum Agreement with the applicant

Step

7: Cabinet Petroleum Agreement sent to Cabinet

Step

8:

Parliamentary Petroleum Agreement sent for Parliamentary

Ratification

Step

9: Petroleum Agreement becomes effective

PROCEDURE AND REQUIREMENT FOR OBTAINING OIL

MARKETING COMPANY (OMC)

LICENSE AT THE NATIONAL PETROLEUM AUTHORITY (NPA)

Step 1: Registered company in Ghana

Step 2: Business Plan

Step 3: Obtain Environmental Permit from EPA

Step 4:

Bank guarantee favor from TOR

Bank guarantee in favor of CEPS

Evidence of at least 50% local participation in the company

Meet requirement for the number of stations to be constructed

Step 5: Provisional license valid for 2 years, issued by NPA

Step 6: Construction of at least 5 service stations

Step 7: Granting of OMC license by NPA

Note:

The provisional license does not allow applicants to lift products from Tema Oil Refinery,

the depots or any other refinery but grants permit to construct service stations.

For additional information you may contact: The Ministry of Energy - www.energymin.gov.gh

The Ghana National Petroleum Corporation - www.gnpcghana.com

The Volta River Authroity- www.vra.com

The Electricity Company of Ghana - www.ecgonline.info/ecgweb

DOING BUSINESS IN GHANA

Requirements for registering a business in Ghana

This Memorandum sets out the legal regime and requirements governing companies and

investments in Ghana.

1. Requirements:

The Companies Code 1963 (Act 179), as amended governs the organization of companies in

Ghana. Companies in Ghana may be either public or private (not more than 50 members or

debenture holders) and unlimited, limited by shares or limited by guarantee. With regard to

companies limited by shares, the Code sets down the following minimum requirements:

Minimum of 1 shareholder

Minimum of 2 directors

1 auditor

1 Company Secretary

Submission of proposed Regulations.

The Regulations would only be accepted if in the opinion of the Registrar the objects for which

the company is being formed are not illegal, the name is acceptable to the Registrar and the

subscribers are neither minors nor persons of unsound mind.

The Regulations must contain the following:

1. The name of the company with Limited as the last word of the name of company (unless it is not a company limited by shares).

2. The nature of the business or businesses which is to be carried out by the company. 3. It must state that the company has all the full capacity of a mature person except where

the power is expressly excluded by the Regulations.

4. The names of the first directors of the company (at least 2). 5. An indication in the Regulations that the powers of the directors are limited in accordance

with the law.

6. The number of shares with which the company is registered. 7. A declaration that the liability of its members is limited.

(2) The Regulations must be signed by the subscribers. The subscribers must indicate the number

of shares they have agreed to take and the consideration in cash that they have agreed to pay.

The directors of the Company also must be natural persons of sound mind, not minors.

A company is required under the law to appoint a Company Secretary. In fact, a company cannot

commence business unless a secretary, 2 directors and an auditor have been appointed. A

company cannot also carry on business for more than 6 months without a secretary (otherwise

officers of the company would be liable to pay a fine for each day of default).

In Ghana, a secretary can be either a natural or artificial person. It is the duty of the directors to

appoint a secretary and fix the remuneration of the secretary (section 190-3).

A letter should also be obtained from the prospective auditors, indicating their willingness to act

as auditors to the Company.

Upon submission and acceptance of the regulations by the Registrar, the company is duly

registered and the Registrar issues a certificate of incorporation to the Company.

The Directors and Secretary of the Company are then required to file additional forms stating

their full names and addresses, particulars of other directorships held, and the principal or

registered office of the company.

The following information must be filed:

The name of the company;

The objects of the company;

The name and address of the Secretary;

The name and address of Auditor

Stated Capital

Number of shares issued

Registered Office

Upon submission of the relevant forms, and payment of a commencement tax (0.2% of the stated

capital), a certificate to commence business and a tax identity number are issued to the company.

It is to be noted that when the particulars are submitted, the Registrar is obliged by law to

register the returns and cause a copy to be published in the Gazette. The publication in the

Gazette is notification to the general public that the company has been incorporated and ready to

carry on business.

2. Stated Capital:

The minimum capital for a company registered in Ghana is GHC500 i.e. the equivalent of about

USD500. However, for companies with foreign participation i.e. foreign shareholders, the

minimum capital requirements are as follows:

Joint venture with Ghanaian participation: USD10,000

100% foreign ownership: USD50,000

Company engaged in trading activities: USD300,000.

(Regardless of whether the shares are wholly held by foreigners or not)

Investment incentives:

a. Minimum Foreign Capital Requirement

To satisfy the minimum equity requirement, the investor must first incorporate or register a

company at the Registrar General's Department and provide the minimum equity requirements

either in cash or in kind (i.e. stock, equipment, vehicles etc).

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. Consideration for goodwill of a business or services rendered by partners cannot be

used to satisfy the minimum foreign equity capital.

b. Investment Incentives, Benefits and Guarantees

The Ghana Investment Promotion Centre Act, 1994, provides for automatic incentives and

benefits. A highlight of these incentives and benefits are as follows:

1 Customs Import Duty Exemptions

There is custom duty exemption for agricultural and Tax

industrial plant, machinery and equipment imported for

investment purposes as contained in chapters 82, 84, 85,

and 92 of the Customs Harmonized Commodity and

Tariff Code. However, with the exception of goods

imported specifically for the Educational, Health and

Agricultural sectors, all import duty-exempted goods

attract the relevant processing and/or other related fees or

levies ranging between 0.5% and 1.0%.

Rate

0

The following attract concessionary duty as follows:

Tariff Description

Import

Duty (%)

VAT

(%)

Knives and Cutting Blades 5 0

Automatic Data Processing Machines

and units thereof

0 12.5

Solar, Wind, & Thermal Energy

Generating sets, Electric Generating

sets of 375 KVA and above

5 0

Air-conditioners; Furnishing including

Carpets, Bedding and Fixtures; Fans

and Radio Sets; Refrigerators/Deep

Freezers; Television Sets; Public

Address Systems; and Crockery

10 0

Sawn, Chipped, Sliced or Peeled

Wood

0 12.5

Aluminium Ingots 5 12.5

Floats for fishing nets (of natural

corks)

0 12.5

Float cords for fishing nets 0 12.5

Floats for fishing nets (of glass) 0 12.5

Lead weights for fishing nets (of lead) 0 12.5

Inputs for the manufacture of fishing

nets & fishing ropes

0 12.5

Recording instruments for the music

industry

0 12.5

Import duty is imposed on vehicles depending on the type of vehicle. All motor vehicles

with cylinder capacity not exceeding 1900 attract an import duty rate of 5%. Motor

vehicles of cylinder capacity exceeding 1900 but not exceeding 3000 attract an import

duty of 10%. Other vehicles of cylinder capacity exceeding 3000 and those designed for

travelling on snow, golf cars and similar vehicles attract an import duty of 20%.

Commercial vehicles for the transport of goods such as trucks, tippers and Lorries attract

a duty of 5%.

All the type of vehicles referred to above attract a Value Added Tax (VAT) rate of

12.5%, except ambulances, which are VAT-exempt.

Exemptions may be granted from payment of customs import duty and other related

charges for any special equipment that is not zero-rated upon application to the GIPC.

2 Tax benefits

Tax Holiday:

For some chosen sectors e.g. Air and sea transport (non-resident): Income exempted (from start

of operations).

Capital Allowances:

Accelerated depreciation allowance is applicable to all sectors except banking, finance,

commerce, insurance, mining and petroleum. The qualifying plant expenditure depreciation rate

is 50 percent per annum for 2 years; the qualifying building expenditure depreciation rate is 20

percent per annum for 5 years.

Location Incentives (tax rebate):

Manufacturing industries located in regional capitals other than Accra and Tema will enjoy a

25% rebate. All other manufacturing industries located outside regional capitals will enjoy a 50%

rebate.

Corporate Tax Rates:

The tax rate in all sectors is 25% (2008 budget) except for income from non-traditional exports,

real estate companies and hotels which enjoy a lower tax rate.

Exemption from Income Tax:

An exemption will apply for the provision of accommodation for employees on farms, as well as

building, timber, mining and construction sites.

Exemption from the Minimum Chargeable Income Tax:

There is an exemption from the minimum chargeable income of 5% of turnover during the first 5

years.

Withholding Tax:

Withholding tax rebates are as follows: dividends 10%; royalties, management and technology

transfer fees 15%; interest 10%.

Loss Carry-over:

All sectors are allowed 5 years for loss carry-over, except for insurance business, which is

unlimited.

* Please note that all income derived from, accruing in, brought into or received in Ghana by any

person, whether resident in Ghana or not, and whether Ghanaian or not, is taxable. All

enterprises must register with the Internal Revenue Service and the Value Added Tax (VAT)

Secretariat for purposes of statutory tax, e.g. taxes, rebates and exemptions thereof.

c. Investment Guarantees

Free Transferability of Capital, Profits and Dividends

The GIPC Act 478 provides guarantees to all enterprises, including free transferability through

any authorized dealer bank in freely convertible currency of dividends or net profits attributable

to the investment; payments in respect of loan servicing where a foreign loan has been obtained;

remittance of proceeds (net of all taxes and other obligations) in the event of sale or liquidation

of the enterprise or any interest attributable to the investment. Guarantees against expropriation

of private investments provided under Act 478 are buttressed by the constitution.

Protection regimes at the multilateral level

Ghana has signed an Investment Incentive Agreement with the Overseas Investment Corporation

(OPIC) of the United States of America. OPIC offers investment insurance on a commercial

basis with support of the United States government.

Ghana is also a signatory to the World Bank's Multilateral Investment Guarantee Agency

(MIGA) Convention. MIGA guarantees insurance coverage against non-commercial risks such

as transfer restrictions, breach of contract, expropriation, war and civil disobedience.

Immigrant Quota:

Under the GIPC Act, enterprises benefit from the grant of an automatic maximum immigrant

quota, depending on the enterprises' paid-up capital as follows:

US $10,000.00 but less than US $100,000.00 or its equivalent in cedis, shall be entitled to

an initial automatic maximum immigrant quota of one person.

US $100,000.00 but less than US $500,000.00 or its equivalent in cedis shall be entitled

to an initial automatic maximum immigrant quota of two persons.

US $500,000.00 or more or its equivalent in cedis shall be entitled to an initial automatic

maximum immigrant quota of four persons.

All other applications for Immigrant quota with respect to an investment in Ghana should be

submitted to the Centre and will be dealt with by the Immigration Service in consultation with

the Centre.

4. Joint venture

Where two companies propose to enter into a joint venture relationship, Ghana Law only permits

them to use the vehicle of an incorporated company. This is because under Ghana law, a

partnership is defined as an association between 2 or more natural persons (and not more than 20

persons) who carry on a business in common with a view to profit. Further, there is no limited

liability form of Partnership in Ghana and therefore, it is not a very advisable form of business

organization.

5. Costs of incorporation

The costs for incorporating a company are mainly determined by the amount of the stated capital.

A commencement tax of 0.5% of the stated capital is paid at incorporation. For instance, a stated

capital of USD50,000 would attract a tax of USD250. The other costs are the costs of purchasing

and filing of the requisite statutory forms (USD400), registration at the Ghana Investment

Promotion Centre (USD1200) and legal fees of USD 1000.

6. External companies

Instead of incorporating a company in Ghana, the investor may register an external company. An

external company is a body corporate formed outside Ghana, which has an established place of

business in Ghana. The Companies Code defines an external company as a branch, management,

share, transfer or registration office. A factory, mine or other fixed place of business also

qualifies under the Companies Code as an external company.

Any company incorporated outside Ghana which intends to operate as an external company in

Ghana must register with the Registrar of Companies. It is required to deliver to the Registrar of

Companies its establishment documents from its country of origin. These documents should be

certified copies of the instruments constituting or defining the constitution of the company.

In addition to its basic instruments, the external company is also required to provide further

particulars. These particulars include the name and the nature of business of the company. If the

company has shares, the number and nominal value of its authorised and issued shares and the

amount paid for the shares and the amount yet to be paid must also be disclosed. The company is

also required to provide the address of its registered or principal office in the country of

incorporation and its address and principal place of business in Ghana. Should there be any

change or alteration in the particulars given to the Registrar of Companies, the external company

is required to notify the Registrar of Companies within two months from the time the change

occurred, and deliver the new particulars for registration.

Officers of external companies

The Companies Code recognises and provides for two officers of an external company. These

are described in the Code as the local manager and the process agent.

Local manager

The local manager is the person or persons appointed by the external company to manage its

business in Ghana. The external company is required to supply to the Registrar of Companies the

names and addresses of its local manager or managers. The local manager of a company must be

a person who is competent to be appointed a director of a company in Ghana. The acts of a

person registered as a local manager bind the external company as a general rule; the exception

to this rule is where the local manager has no authority so to act and the person with whom the

local manager was transacting business had or should have had knowledge of this absence of

authority.

Process agent

An external company is also required by the Companies Code to appoint a process agent. A

process agent is a person authorised by an external company to accept service of court processes

and other documents on behalf of the external company. The external company is required to

supply the Registrar of Companies with the name and address of the process agent. A process is

deemed to be served on the company if it is served on the process agent.

7. Incorporation Steps

1 Fill out the Incorporation Questionnaire attached hereto. Note the following:

o Directors' details, including dates of birth and residential addresses. A minimum

of two directors is required. At least one director is required to have Ghanaian

residential address.

o Indicate stated capital. For GIPC registration (see below), the following minimum

stated capital (cedi equivalent) is required for:

Joint venture (non-trading) companies with a Ghanaian partner,

$10,000.00

Wholly foreign-owned (non-trading) companies, $50,000.00

Trading companies involved in importation (regardless of nationality of

owners, $300,000.00).

o Nominate Auditors (If you do not have any in mind, we can recommend a firm of

auditors)

We will complete the appropriate forms using the information supplied on the

questionnaire. We will require original signatures of all directors on all copies. If you are

not in Ghana at the relevant time, we will email you the completed forms. Print out four

copies and sign, and return them to us by courier.

We will also email you

an invoice of the incorporation costs, which are dependent on the stated

capital of the company and our agreed Company Secretarial fees; and

A copy of our Company Secretarial agreement, which we require you to

sign to authorise our firm to register the company on your behalf as

company secretaries.

Once we receive the signed forms and the invoice amounts, we will proceed to register

the company.

Within 1-2 weeks, we will forward you the Certificate of Incorporation. The Certificate

to Commence Business may take a week longer because it is sent to the Ministry for

Trade and Industry for a Tax Identification Number to be assigned to the company.

Your company can now begin operating.

Registration with the Ghana Investment Promotion Centre (GIPC) is mandatory

trade & investment

Documents

investment goods

investment projects

foreignowned enterprises

targeted investment

liberalised investment

foreign business collaborators

prospective investors

ghanaianowned enterprises