The first step
The first thing to do when seriously considering investing into Ghana is to consult with the GIPC (Ghana Investment and Promotion Centre) in Accra – an appointment will need to be made. The GIPC is the key contact for the foreign investor, and a partner along the journey of investing and operating in Ghana.
The GIPC registration must happen to do business in Ghana – the GIPC will take the investor through the investment process and explain the list of guidelines and requirements which must be met whilst establishing and whilst doing business.
The requirements are not exhaustive, but require resources. At this meeting, it always makes sense to profile the investor with recent financials, global reach, systemic importance as an agriculture supplier, etc.
Any offshore investment from a South African company will require South African Reserve Bank (SARB) approval for an offshore investment if investing from South Africa, or SARB notification of the investment if from Mauritius.
The notes below are fairly firm guidelines, however, engagement with the GIPC will give 100% certainty.
The second step – Setting up a company
At a high level, the key steps into setting up a company or branch in Ghana are as follows:
Register a company with the Department of the Registrar General to obtain:
- Certificate of incorporation
- Company regulations
- Certificate to commence business
A minimum of two directors need to be appointed, one of whom must be a resident of Ghana. Legal firms such as ENS offer full company services (Director, company secretary, registered address).
The complete process generally takes less than two weeks if all documents are in order.
100% ownership is allowed, but JV’s are encouraged – equity requirements for JV’s are smaller at USD 200 000.
Subsequent requirements include appointing external auditors, registering with the Ghana Revenue Authority, registering for VAT.
Open Bank accounts
Open two bank accounts – one in local currency and one in foreign currency (USD or EUR) – these accounts will be used to transfer initial equity.
Equity can be transferred by:
- Bank transfer, or
- Physical cash, or
- Importation of equipment, goods and machinery
Registration with the relevant government agency, such as the department of Agriculture, normally happens at this time.
The company must be able to product a cedi bank statement before being allowed to operate by the GIPC.
It is important to note that Expatriate worker visa depend entirely on the level of capital contribution:
- USD 50 000 to USD 250 000 – 1 person
- USD 250 000 to USD 500 000 – 2 persons
- USD 500 000 to USD 700 000 – 3 persons
- USD 700 000 and higher – 4 persons
A trading company will be required to invest equity or equity equivalent of USD 1 000 000 if it undertakes trading activities.
The third step – Registration with the GIPC
Once the GIPC is satisfied that all requirements (as above) have been met, the investor can register the company with the GIPC. Through the registration with the GIPC, the Investor obtains the licence to operate – this is key.
The licence to operate is valid for two years, after which time, it needs to be renewed with the GIPC. The renewal application will need to be accompanied by a tax clearance certificate from the GRA.
The GIPC will remain involved in the entire investment life cycle, and will require 6 monthly updates of business operations, even if the established company is not operational.
The fourth step – Registration with the Ghana Revenue Authority
After the licence to operate has been granted by the GIPC, the company will need to register with the GRA to obtain the TIN (Tax Identification Number). The company tax rate is 25%.
It makes sense to delay VAT registration until operational, given that monthly VAT returns are required from the date of registration for VAT. Tax audits, which will happen, will expose any irregularities, and the accompanying fines and penalties.
DISCLAIMER: THIS INFORMATION HAS BEEN COMPILED FROM VARIOUS OPEN AND FREE SOURCES, MOST OF WHICH CAN BE ACCESSED FROM LINKS IN THE CONTENT. IT IS INTENDED FOR INFORMATION PURPOSES ONLY. FINAL REQUIREMENTS ARE DECIDED BY THE RELEVANT GHANA AUTHORITIES AND THE HOME AUTHORITY OF THE BUSINESS INVESTING OUTSIDE OF ITS HOME. ALL RIGHTS RESERVED.