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Doing Business in Ghana

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HOW TO INVEST IN GHANA

 

How to get a Residence Permit in Ghana: In order to reside in Ghana legally, there are a few basic procedures that all must go through, whether you are an African born in the Diaspora (repatriate) or a common European (expatriate) seeking to exploit Ghana's vast resources, the rules apply the same. Residency is given to the following categories: Investors Non-Governmental Organizations Students Note that there is no special consideration for those of us, whose parents were shipped out as human cargo, so don't waste much time expecting a red carpet, rather come in and prepare to fight for your rights, enlightening those we come into contact with and leaving an impact that will force the government to acknowledge the need to make provisions for returning repatriates. Nothing speaks like positive works.

Investors:
Most commonly, those relocating to Ghana take advantage of the investment incentives offered by Ghana government, through its extension known as the Ghana Investment Promotion Center. After complying with a few requirements, G.I.P.C. will write to Ghana Immigrations on your behalf, for your residence permit. The incentives for investing in Ghana include tax holidays, protection of interests under specific laws and an opportunity to legally operate your business in Ghana, but the most significant reason is to be granted permission to reside in Ghana. However, one should note the following first:

* Investment in all sectors of the economy other than mining and petroleum can be established without prior approval. Mining and petroleum projects have be licensed by the Minerals commission and Ministry of Mines and Energy, respectively.

*There are categories for every investor, where a minimum equity contribution has to be met:

Joint Venture (90% foreign owned, 10% Ghanaian) $10,000 USD

Foreign Owned (100% foreign owned) $50,000 USD

All trading Enterprises (stores) $300,000 USD

Exportation of non-traditional exports no minimum required

The minimum equity investment can be in cash and/or kind. Machinery and equipment relevant to the objective of your business is added as part of the investment once it is imported in the name of the company and inspected by an official in Ghana.

*All of the above categories allow for one immigrant quota, providing residence permit for that person and his or her family, if they are the director of the company. Additional quotas are available for $1,200 per person.


The procedure is undoubtedly tedious and time consuming, however, we have ways of simplifying it for you, but first, consider the requirements in their totality and then we will present your options. The procedure is as follows:

1.Investors must register their business with the Register General. At this point you will determine availability of chosen name, incorporate your business and receive the appropriate docs to verify your registration.

2.A bank account must be opened, in the name of the business, to facilitate wiring in of investment capital and all other business transactions.

3.Investors must now provide the minimum equity investment required for business type either by wire transfer or the importation of business equipment.

4.The investor then registers with G.I.P.C. and pays all relevant fees. (Prior to this phase, fees should not exceed $100 USD, but with G.I.P.C. the minimum cost of fees for any type of business will be about $1,300 USD.

5. All enterprises must then register directly with the Internal Revenue Service and the Value Added Tax Secretariat for purposes of statutory taxes.

Once all is said and done the investor is prepared to commence business in Ghana. As promised, we offer a way to simplify this procedure, that is, we can either walk you through it or we can serve as your agent by handling almost every aspect of the process. In some cases an accountant will be necessary, but we provide a reliable one for you. Our fees are as follows:

* Walk through $100 USD

*Complete service $300 USD

Non-Governmental Organizations

This route is less commonly used by incoming repatriates, but it offers a wonderful alternative to those of us who intend to make our impact via strengthening the environment in which we live. An NGO is the same as a non-profit outfit. Its objectives are to serve the community. Due to the misuse of the privileges appropriated to such organizations, there has been many new restrictions and constant annual checks to insure that the NGO is operating as promised and yielding positive results. One of the areas most needed and most readily accepted by Ghana government is in the area of education. Health care workers also receive a welcome invitation as well as those who promote development in the rural areas of Ghana, whether it be providing water wells, lavatories, or processing plants for the better production of non-traditional exports.

There are no minimum equity investments for a NGO, but the outfit must show sponsorship from a parent company who will be responsible for the expenses of operation, that is, the salary of its employees and the funds to embark on the various projects.

Registration is done both through the Register Generals office and then through the NGO office in Ghana. An annual submission must be made to verify compliance with stated goals and objectives.

Students
Students are given permission to reside in Ghana for the extent of their term in school. This category is just above tourist and really doesn't attract a residency permit, but an extended visa. There are various exchange programs available through the schools who are affiliates with our universities, however, if a foreigner wishes to apply for to one of our universities and can pay the fees, he or she will be enrolled and given permission to stay in the country until the courses are complete.

.

A. Business Registration

(a) Registrar General’s Department (RGD)
The Registrar General’s Department is the organization that registers all companies (societies and institutions) in Ghana. The Law regulating the formation of companies is the Companies Code, 1963 (Act 179). A Limited Liability company is the most common structure utilized by businesses, particularly foreign investors and others who want to limit their liabilities.

Limited Liability companies are expected to fill out the relevant Application Forms, which serve as the Company ’s Regulations. All companies must have an auditor, who must be a member of the Institute of Chartered Accountants, but should not be an officer or servant of the company or be an employee or partner of such persons. When all such forms have been filled satisfactorily and relevant fees paid, a Certificate of Incorporation and a Certificate to Commence Business are issued. Below are the basic costs and fees applicable at the RGD office:

 

US$

GH¢

Application Forms

7.14

10.00

Stamp Duty is 0.5% of stated /paid-up capital

 

 

Filing  Fees

7.14

10.00

Incorporation Fees

40.00

56.00

Auditor's Fees Varies

 

 

    1. Centre (GIPC)
      The GIPC is responsible for registering all (foreign) investment, which qualify under the GIPC Act 1994. This Act does not apply to either mining or petroleum enterprises.

      Application Procedure: Investors are required to complete
      Investor Registration Forms (Form GIPC/R1) in triplicate. Within five (5) days from the date of orderly receipt of these forms (and its attachments) the GIPC will formally register the investment. Below are the relevant fees and costs applicable at GIPC:

 

 


CATEGORY
 



US$

 

 

GH ¢

1. REGISTRATION

a)Wholly Ghanaian Owned Business

Free

 

Free

b)Joint-venture (ie $10,000)

1,000

 

1,400

c)  Wholly Foreign (ie $50,000)

2,500

 

3,500

d)General Trading (ie $300,000)

5,000

 

7,000

e)Renewal (Every 2 years)

1,500

 

2,100

f)Certificate Replacement

100

 

140

g) Liaison Office

7,500

 

10,500

h) Tourism

  • Up to $500,000 investment
  • $500,000 - $2million investment
  • above $2million investment

1,000

5,000

10,000

 

 

 

1,400

7,000

14,000

i)All Strategic Investment (LI 1817
and section 25)

20,000

 

28,000

2. EXEMPTION

a)Invoice Value up to $100,000

500

 

700

b)Invoice Value up to $500,000

1,000

 

1,400

c)  Invoice Value up to $1,000,000

2,500

 

3,500

d)Invoice Value greater than $1,000,000

5,000

 

7,000

 

 

 

 

3. TECHNOLOGY TRANSFER (Max 10 years)

a)Transfer Value up to $500,000 per annum

2,500 p.a

 

3,500
p.a

b)Transfer Value up to $1,000,000 per annum

5,000 p.a

 

7,000
 p.a

c)  Transfer Value greater than
$1,000,000 per annum

15,000 p.a

 

21,000
p.a

(c)   Ghana Free Zones Board (GFZB)
The GFZB is responsible for the promotion of the processing and manufacturing of commodities through the establishment of export processing zones. It also encourages the development of commercial and service activities within the ports of Ghana. These activities are regulated by the Free Zone Act, 1995 (Act 504).

Application Procedure: As a basic requirement for commencing business with GFZB, investors are expected to incorporate a company/partnership in Ghana and provide evidence of possession or lease of property or intent to acquire such property.

Depending on the activity to be undertaken in the zone, the applicant should obtain and complete GFZB Form 3, 4 or 5; and submit it with the required attachments to the Secretariat of the Board. The GFZB shall notify the investor of his/her Application for License within 28 working days.

(i) Application Forms (US$100.00)

(ii)    Licensing Fees:

Business

Initial

Renewal/Year

Manufacturing

US$2,000.00

US$1,600.00

Commercial

US$5,000.00

US$4,000.00

Service

US$3,000.00

US$2,000.00

Development

US$4,000.00

US$3,000.00

 

B. Labour Issues/Employment

The Labour Act 651 of 2003 regulates employment and labour issues in Ghana. This Act consolidates all laws relating to labour, employers, trade unions and industrial relations. The result of a collaborative effort among the social partners – Government, Employers and Organized Labour – the Act provides for the protection of employment, general conditions of employment, unfair labour practices, trade unions and employers organizations, occupational health, safety and environment, and labour inspection.

National Labour Commission
An important feature under the Act is the establishment of seven-member National Labour Commission. The Commission consists of two members each nominated by Government, organized labour, and employers’ organization. The chairperson is nominated by organized labour and employers.

Mission Statement
“To develop and sustain a peaceful and harmonious industrial relations environment through the use of effective dispute resolution practices, promotion of co-operation among the labour market players and mutual respect for their rights and responsibilities.”

Functions
The functions of the Commission are:

a) to facilitate the settlement of industrial disputes;
b) to settle industrial disputes;
c) to investigate labour related complaints, in particular unfair labour practices and take steps as it considers necessary to prevent labour disputes;
d) to maintain a data base of qualified persons to serve as mediators and arbitrators; and
e) to promote effective labour cooperation between labour and management

 

Independence
In the exercise of its adjudicating and dispute settlement function, the Commission is not subject to the control or direction of any persons or authority.

Powers
In settling industrial disputes the Commission has the powers of the High Court in respect of enforcing the attendance of witnesses and examining them on oath, affirmation or otherwise and compelling the production of documents, among others.

Enforcement of Orders
In enforcing its orders, the Commission makes application to the High Court for an order to compel any person who fails or refuses to comply with its direction or order.

Settlement of Industrial Disputes - Mediation
When the Commission is notified by parties to an industrial dispute that they have failed to settle the dispute by negotiation, the Commission requests the parties to settle the dispute by mediation and the settlement agreement is binding on the parties.

Voluntary Arbitration
When mediation fails and the Commission is notified, it refers the dispute to an arbitrator, selected by the parties, and the decision of the arbitrator is binding on the parties.

Compulsory Arbitration
In industrial disputes that affect workers engaged in essential services, which are prohibited from resorting to lockout or strike, the Commission settles the dispute by compulsory arbitration. The award in a compulsory arbitration is final and binding on the parties unless challenged in the Court of Appeal on questions of law.

The Value of Labour
The National Tripartite Committee, comprising the Minister responsible for Labour, representatives of the Government, employer’s organizations and organized labour, determines the national minimum wage. Currently, the daily minimum wage is GH¢3.11 (US$2.22). Another financial obligation of the employer is the payment of a statutory monthly contribution of 12.5% of employee’s basic salary to the Social Security and National Insurance Trust (SSNIT).

 The following are some other fees and charges expected in the case of the employment expatriates resident in Ghana –

(a)    Ghana Immigration Service

The Ghana Immigration Service has been established as the agency of the government of Ghana to advise on and to ensure the effective implementation of all laws and regulations pertaining to immigration and related issues. The Ghana Immigration Service is mandated to regulate and monitor the entry, residence, employment and exit of all foreigners. Movement of Ghanaians in and out of the country is equally monitored.

(i) Resident Permit/Person (ECOWAS)

¢500,000 (GH¢50) (US$35.71)

(ii) Resident Permit/Person – Others

¢2,000,000 (GH¢200) (US$142.86)

(iii) Re-Entry Permits (Single/Multiple)

US$50.00/100.00



(b) Ghana Investment Promotion Centre

(i) Automatic Quota (per person)

US$500 ¢7,000,000 GH¢700

(ii) Additional Quota (per person)

US$2,500 ¢35,000,000 GH¢3,500

(iii) Replacement of Quota (per person)

US$500 ¢7,000,000 GH¢700

(iv) Short term Quota up to 2 years

US$1000 ¢14,000.000 GH¢1400


(c) Ghana Free Zones Board

(i) Resident Permit/Person/Year - US$200.00

 d. Taxes

Companies operating in Ghana are liable to pay varied levels of taxes depending on the sector of operation, and the location of the project and whether the company is listed on the Ghana Stock Exchange. Taxable profits are based on profits declared in audited accounts subject to adjustments made for capital allowances. For more information on the tax rates in 2010 visit the Internal Revenue Website:www.irs.gov.gh 

Income tax incentives are provided under the Internal Revenue Act, 2000 (Act 592) and further amended by Internal Revenue (Amendment) (No.2) ACT, 2006 (ACT 710)6. Income Tax rates applicable to resident individuals are:

Breakdown

Chargeable Income GH¢

Rate of Tax

First

240.00

Free

Next

240.00

5%

Next

1,200.00

10%

Next

7,920.00

17.5%

Exceeding

9,600.00

25%


If you take someone on to work for you, (even your wife, husband or child), you may have to deduct tax and Social Security (www.ssnit.com) from their earnings, and pay the employer's share of 12.5% of the Social Security Contributions. 

For more information on the income taxation in Ghana visit Internal Revenue Service website (
www.irs.gov.gh)

The income tax rate applicable to non-resident individuals is 20%.

ALL THOSE WHO WANT TO COME TO WEST AFRICA CAN CONTACT US,FOR PROPER DIRECTION. FOR CULTURAL,HISTORICAL ,BUSINESS,BACKGROUND RESEACH FOR AFRICAN-AMERICANS,FESTIVALS,TOURISM,SIGHT-SEEING,VACATIONS,HOLIDAYS,AND ANY OTHER,AS MUCH AS U HAVE INTEREST IN AFRICA AND WANT TO COME,WE ARE HERE TO ASSIST AND HELP YOU. FEEL FREE TO SEND US E-MAIL OR CALL US ON PHONE.

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