Economic outlook
With more than 32 million citizens and abundant natural resources, Ghana has fantastic growth and business potential. Ghana is the second-largest country (population) in West Africa. Only Nigeria has a larger population than Ghana.
The West African nation is strategically positioned as a major economic force in the West African sub-region, providing access to a market with a population of close to 400 million people (ECOWAS) and now even access to over 1.3 billion people (through AfCFTA).
A recent IMF assessment predicts that Ghana’s economy will remain comparatively robust over the medium term, helped by increased prices for important exports and strong domestic demand.
Growth is expected to reach 5.5 percent in 2022, with an average of 5.3 percent. A relatively stronger industry sector, led by agriculture and services, is anticipated to drive broad-based growth.
A strong and stable democracy for business growth
Since converting to a multi-party democracy in 1992, Ghana is regarded as one of the most stable nations in West Africa. Since then, the nation has made significant progress in solidifying its democratic accomplishments.
The legislative, executive, and judicial branches of government are distinctly separated in accordance with the 1992 Constitution.
According to the 2016 World Press Freedom Index, which evaluates the plurality, independence of the media, effectiveness of the legal system, and safety of journalists in each of the 180 nations included in the ranking, places Ghana 26th overall and 2nd in Africa.
Ghana has become a very important entry market for businesses and investors seeking to enter and access opportunities on the African continent.
Annan Capital Partners (ACP) has been at the forefront of facilitating smooth market entry. We are bringing together decades of consulting, advisory, and market entry experience, which can be leveraged for your business setup and growth in Ghana as well as across other key markets on the continent.
Setting up a business in Ghana
The Registrar Generals’ Department (RGD) is the statutory and regulatory body mandated by the government to ensure an efficient and effective administration of entities, inter alia, the registration of businesses in Ghana.
Ghana allows the formation of various forms of businesses. However, some forms of entities can only be set up by Ghanaians.
Business can be registered as:
- Sole Proprietorship
- Limited Liability Company
- Companies Limited by Guarantee
- External company (branch)
The type of business entity suitable for establishment in Ghana will be determined by the nature of the business in relation to the ownership structure (Ghanaian/Foreigner).Annan Capital Partners (ACP), over the years, has been assisting entrepreneurs and businesses to setup in Ghana without any hustle.
Under Ghana’s company registration Act, foreign businesses can be registered either as a Limited Liability Company or as an external company (foreign branch).
Limited Liability Company (Local Subsidiary)
This is a company limited by shares incorporated under the Ghana Companies Act, 1963 (Act 179). A Ghanaian or a non-Ghanaian may hold all or a portion of a subsidiary.
This entity type requires a minimum of two directors, a minimum of one shareholder and a secretary.
Setup requirements
Registration of a local subsidiary requires the filing of appropriate forms with the RGD. All fields of the forms must be properly completed in order to obtain certificates of incorporation and commencement of business, as well as a certified true copy of the company’s regulations.
These are some of the information required in order to complete the LLC forms:
- Company Name (Must be verified that it doesn’t already exist or does not violate any requirements in name formation)
- Nature of business
- Registered Office
- Digital Address
- Names and address of directors (a minimum of two is directors)
- Principal Place of Business
- Registered office and principal place of business and postal addresses
- Authorised number of shares
- Stated capital
- Issued shares
- Name and address of subscribers/ shareholders
- Name of company secretary
- Name and address of Auditor
- Tax Identification Number of directors, secretary, and shareholders
External Company
In order to facilitate the parent company’s economic interests, external firms may be founded in a nation (outside of the country of incorporation).
The laws of the Republic of Ghana permit the setup of external companies. An external entity here refers to a company formed outside the Republic of Ghana that has a registered place of business in Ghana.
It’s standard practice to work with a local agency to facilitate the setup of your external company in Ghana. Annan Capital Partners (ACP) is ideally positioned to provide foreign companies with the requisite business and legal requirements as well as market entry advisory services to setup external(branch) companies in Ghana as well as other key markets across Africa.
Setup Requirements
In addition to the requirements indicated above under limited liability company (local entity), setting up an external company requires the following information and proof of documentation:
- Certificate of incorporation (from parent entity country of incorporation).
- Address of registered office in country of incorporation
- Details of principal place of business in Ghana
- Name and address of process agent (facilitator)
- Memorandum and articles of association of head office
- A power of attorney executed in favour of the local manager (notarised)
Statutory registration
Depending on the sector and the type of business, businesses must also be registered with various regulatory agencies in addition to incorporating or registering with the RGD.
Here are some of such regulatory entities depending on the nature of business.
Ghana Investment Promotion Centre (GIPC)
Under the GIPC Act of 2013 (Act 865) (GIPC Act), all companies in which there is foreign participation are required to register with the GIPC.
The following are the minimum capital requirements under the GIPC Act:
A joint venture with Ghanaian participation
A foreign partner must invest at least US$200,000 (in cash or capital goods related to the investment) in a joint venture with at least 10% Ghanaian involvement.
A wholly owned foreign entity
An entity wholly owned by a non-Ghanaian requires a minimum amount of foreign equity capital of US$500,000 in either cash or capital goods relevant to the investment.
Trading entity
A trading organization must have a minimum equity capital of US$1,000,000 in cash or capital goods appropriate to the investment if it is controlled entirely or in part by a non-Ghanaian.
While it could be cumbersome in navigating these regulatory, legal and local content requirements in setting up as a foreign entity, it is highly recommended to seek advisory support.
Reimagine an improved, transparent, trustworthy, and consistent business support system, which is essential to building value and managing your risks in setting up a foreign entity in Ghana through a local advisory support network.
Seeking to incorporate in Ghana as a foreign company? Find out more here.
Minerals Commission (MC)
To participate in the mining industry, all mining and mine support service companies must register with the MC.
The registration entitles them to a number of benefits, including support in the form of an immigration quota for expatriates, freedom from import duties, and authorization to issue invoices in foreign currencies with the Bank of Ghana’s consent.
Petroleum Commission (PC)
Contractors, subcontractors, and sub-subcontractors alike in the upstream oil and gas industry must register with the PC and submit the necessary registration costs.
One must create a joint venture (JV) with an indigenous Ghanaian firm (IGC) that has at least a 5 percent or 10 percent stake in the JV in the event of a contractor or subcontractor, respectively, in order to engage in the upstream oil and gas sector as a foreign investor.
National Communication Authority (NCA)
Businesses that plan to import telecommunications equipment, such as servers, mobile phones, fax machines, cordless phones, and radio equipment, must register with the National Communications Authority.
Social Security and National Insurance Trust (SSNIT)
The law mandates that each employer register with the SSNIT and make Tier 1 pension contributions on behalf of its staff.
Ghana Revenue Authority (GRA)
For tax purposes, all entities conducting business in Ghana must register with the GRA.
Leveraging on Specialized Economic Zones
As a means of generating employment and stimulating economic growth, Ghana has long attempted to expand its industrial capacity.
Key to this has been government efforts to improve the country’s industrial infrastructure, in part by establishing programmes designed to expand industrial parks and Special Economic Zones (SEZs).
The Ghana Free Zones Authority is the institution mandated to facilitate the development and regulation of these economic zones in the country.
Companies operating in industries other than mining, petroleum, or timber can obtain a license from the GFZB to operate as a free zone entity.
To qualify for this, the entity needs to export at least 70% of its goods or services. A GFZB registration enables the company to enjoy a tax holiday for a period of ten years; thereafter, it will be required to pay corporate tax of 25% on local sales and 15% with respect to exports.
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About us:
Annan Capital Partners (ACP) is a boutique investment advisory and business development agency offering holistic wealth management and venture building services to a wide range of clients, from entrepreneurs to governments and from local SMEs to global corporations. Over the past decade, we have been involved in bridging the gap between investment and investment opportunities in core growth industries such as creative economy, agribusiness, tech, and renewable energy, among others in Africa and beyond.
We are ideally positioned to provide foreign companies with the requisite business and legal requirements as well as market entry advisory services for foreign companies looking to expand their operations in Africa and beyond.
We have spearheaded expansion projects for several multinational corporations and small to medium-sized enterprises on the continent and the establishment of foundations for several high-net-worth individuals.
Talk to our consultants today: www.annancapitalpartners.com
