Ghana has a strong and vibrant labour movement that is very effective in articulating the demands of its workers. The various sectors of the economy are represented by sector labour unions that are affiliated to the national umbrella labour union called the Trades Union Congress (TUC). The main sector of employment is agriculture, which provides employment for more than half the workforce in Ghana.
The main legislation governing employment relations in Ghana is the Labour Act 2003.
Ghana employment law requires that any workers employed for six months or more must be provided with a written contract of employment.
The employment contract must include information about the worker and employer, date of appointment, job title, wage rate and payment interval, work hours, overtime payment, annual leave, conditions relating to incapacity for work due to injury or sickness, length of termination notice required by the worker and employer and details of social security or pension scheme.
The written statement of particulars (containing main terms and conditions of employment) should be provided to a worker within two months of the commencement of employment. The contract must be signed by both parties and dated.
Fixed-term contract workers
While the Labour Act allows hiring fixed term contract workers for tasks of permanent nature, it does not specifically refer to any legal regime for the use of fixed-term contracts. Hence, there is no mention of the maximum duration (including renewals) of the fixed term contracts.
Casual and temporary workers
A temporary worker is defined as a worker who is employed for a continuous period of at least one month and is not a permanent worker or employed for a work that is seasonal in character; while casual worker is a worker engaged on a work which is seasonal or intermittent and not for a continuous period of more than 6 months and whose remuneration is calculated on a daily basis. A temporary worker who is employed by the same employer for a continuous period of six months and more is treated as a permanent worker.
While casuals are not required to be provided with a contract of employment for a casual worker may not be written; they still have the right to minimum wage for each working day, overtime and medical facilities.
Temporary workers are entitled to the Labour Act’s minima in respect of minimum wage, hours of work, rest periods, paid public holidays, night work and sick leave, irrespective of whatever terms agreed by the parties.
The Constitution also guarantees the right to freedom of association, which it defines to include the right of employees to form or join trade unions or other national or international associations, for the protection of their interests.
Collective bargaining agreements
Employees are free to join trade unions of their choice.
A collective agreement relates to terms and conditions of employment of workers and may be concluded between the trade unions on one hand and representative of one or more employers or employers’ organisations on the other hand. The representatives of the employees may include the following provisions in their collective:
A concluded agreement between the parties shall be in writing and signed by a duly authorised member of the committee representing each party. Two copies of the agreement shall be filed with the Labour Commission and the Chief Labour Officer.
|Statutory Working Hours ?||
The maximum number of working days in Ghana is five. All workers, except domestic workers in private homes and task-based workers, are entitled to forty-eight consecutive hours (2 days) of rest per week. The weekly rest days are usually Saturday and Sunday. Weekly rest period is independent of public holidays.
Apart from weekly rest day, workers are also granted a daily continuous rest of at least twelve hours duration between two consecutive working days. The daily rest in an undertaking operating on a seasonal basis may be of less than ten hours but of not more than twelve hours’ duration over a period of at least sixty consecutive days in the calendar year.
|Medical Leave ?||
While the Labour Act does not specifically provide for a statutory minimum period for medical leave, employers are still required to pay for medical expenses caused by occupational injury.
|Annual Leave Accrual Entitlement ?||
A worker is entitled to at least 15 working days fully paid annual leave, after completion of 12 months of continuous service.
On termination of employment contract, the worker is entitled to annual leave in proportion to the period of service in the calendar year (except in the case of termination without notice by the employer).
|Maternity Leave in Ghana ?||
Female workers are entitled to 12 weeks (84 days) of maternity leave with full pay. The maternity leave can be extended by two additional (2) weeks in case of caesarean delivery/abnormal birth or twin (or more) births. Extended leave may also be granted in case of illness due to pregnancy or confinement, certified by the medical practitioner. There is no maximum limit of extended leave stipulated in the law.
|Probation Period ?||
The Labour Act does not specifically provide for a maximum duration of probation period. Instead, it refers to a “reasonable duration determined in advance”. Generally, probationary periods and conditions of probation are provided in collective agreements. Where, as a condition for the engagement of an employee, a contract of employment requires probation, the employment contract has to specify the duration of the probation for the employee.
Compliance with local employment requirements is just one of the issues foreign companies face when employing staff in Ghana. For companies which intend to employ their staff directly through their incorporated Ghanaian entity, professional legal advice is recommended. Shield GEO provides an alternative path for companies to outsource the employment of their staff in Ghana.
As a Global Employer Organization (GEO), Shield GEO acts as the Employer of Record and ensures the employment is compliant with host country regulations regarding employment. In addition Shield GEO will handle payroll processing, tax and immigration. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Ghana.
The Shield GEO solution is an attractive alternative where
– the company is looking to employ staff quickly
– the company doesn’t have an appropriately incorporated entity in Ghana
– the company wants to work within a defined budget
– the company wants to limit its initial commitment in Ghana
– the company needs help with tax, employment, immigration and payroll compliance in Ghana
GEO Solutions or DIY Employment
Companies entering Ghana must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a GEO solution to handle payroll and employment responsibilities. A GEO or Ghana Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have a Ghanaian entity established that can run payroll.
A DIY approach will typically take 6-9 months until there is a properly incorporated WFOE ready to run payroll and cost up to 6 figures if registered capital is required. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally Shield GEO is responsible for all compliance issues related to the employment.
|Management Fee for Employer of Record Services / Monthly Payroll Costs||
Please contact us for a quote
Shield GEO pays the employee on a monthly basis, typically on the last working day of the month although we can adapt to your preferred schedule. Income tax and social security (where applicable) are deducted at source and paid to the local tax authorities.
Ghanaian cedi, GHS or GH¢
|Tax Returns Supplied||
|Corporate Tax Requirements||
The Ghanaian tax year is the calendar year. Companies must submit their tax returns within four months from the end of the accounting year.
Tax instalment payments are due by the last day of every quarter (i.e. three- month period) following the accounting year-end of the company.
|Employers Social Security and statutory contributions||
Employers are required to contribute 13% of the employee’s gross monthly remuneration. For more details, please refer to the section on Employment.
|Employees Social Security and statutory contributions||
Employees are required to contribute 5.5% of the employee’s gross monthly remuneration. For more details, please refer to the section on Employment.
Foreign companies operating in Ghana may find it challenging to deal with the complexities of the country's tax system. The primary concerns for a foreign company that needs to comply with tax laws in Ghana are: Individual income tax (IIT) for employees in Ghana, social security costs, VAT, withholding tax, business tax and permanent establishment concerns.
|Remote Payroll ?||
A remote payroll in Ghana is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Ghana. This applies to both local and foreign employees. One option for a non-resident company to payroll its employees (local and foreign) in Ghana is to use a fully outsourced service like a GEO or PEO which will employ and payroll the staff on their behalf.
|Local Payroll Administration ?||
In some cases, a company will register their business in Ghana under one of the forms available but prefer to have another company administer its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
|Internal Payroll ?||
Larger companies with a commitment to Ghana may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete the incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Ghanaian payroll and can fulfil all tax, withholding tax and payroll requirements.
This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Ghanaian employment laws.
|Fully Outsourced Payroll & Employment ?||
Companies can outsource the employment and payroll of their staff in Ghana to a GEO, like Shield GEO. This is possible for both foreign workers and Ghanaian nationals. This is the easiest, fastest and safest way to payroll staff in Ghana.
Shield GEO manages all aspects of payroll for workers in Ghana, including taxes, withholding, social security payments and other statutory requirements. Shield GEO becomes the Employer of Record and employs the staff on behalf of the client.
Staff are paid monthly with tax and social security deducted at source and paid to local authorities. Shield GEO will invoice the client monthly in advance of the payroll date. The invoice consists of the Total Cost of Employment (Base salary + Employers Statutory Contributions + Additional statutory contributions) and a Management Fee. Shield GEO provides the employees with payslips.
Read more about outsourced payroll and employment through Shield GEO.
|National Currency ?||
Ghanaian cedi, GHS or GH¢
|Corporate Income Tax ?||
The current corporate income tax rate is 25%. For companies operating in the upstream oil and gas industry, the general corporate income tax rate is 35%.
|Income Tax Rate ?||
|Payroll Tax ?||
|Sales Tax ?||
VAT is imposed on the supply of taxable goods and services as well as imports in Ghana. Taxable persons charge VAT on their taxable supplies (output tax) and are charged with VAT on goods which they receive (input tax).
The current standard rate of VAT imposed on taxable goods and services is 15%, with reduced rates available for certain items (0%). In addition, a National Health Insurance Levy of 2.5% is imposed on the supply of goods and services in Ghana and the importation of goods and supply of imported services, bringing the effective VAT rate to 17%.
All persons engaged in taxable activities, with annual taxable supplies exceeding (or expected to exceed) GHC 120,000 are required to register for VAT.
|Withholding Tax ?||
Ghana imposes withholding taxes (WHT) on payments made to both resident (R) and non-residents (NR) on certain classes of income earned:
A reduced rate may be available under an applicable Double Tax Treaty.
|Other Tax ?||
Foreign nationals wishing to work in Ghana are required to obtain a work permit. Foreign companies registered with the Ghana Investment Promotion Centre (GIPC) are automatically granted an Automatic Immigration Quota (AIQ), which enables them to hire foreign nationals. However, the number of foreign nationals that may be hired is dependent on the amount of foreign equity capital invested.
A foreign company that wishes to get a work permit for one of its employees must first set up its Ghanaian subsidiary/branch/representative office. This Ghanaian entity may then apply for the work permit.
Work permits can be obtained from either the GIPC in the form of an Automatic Immigration Quota (AIQ) or the Ghana Immigration Service (GIS)/ Ministry of Interior (MoI), depending on what type of industry the proposed applicant will be working in.
Applicants engaged by companies in the mining and petroleum industries, as well as NGOs have to apply to the GIS/MoI while applicants engaged by companies in other industries have to apply to the GIPC.
Step 1: Obtain letter of recommendation
Prior to making application to the
GIS for work permits, applicants should obtain letter(s) of recommendation from the regulatory bodies overseeing the industries concerned in respect of named applicants:
Step 2: Apply for a work permit
Generally, the Ministry of Interior only grants work permits to expatriate employees or to individuals who have already been issued residence permits. Work permits may also be granted to foreign nationals engaged on a short-term basis for certain specific services. Short-term work permits are not counted against a company’s foreign employee quota.
The following documents must be submitted as part of the work permit application:
When reviewing applications, the Ministry of Interior will consider whether the activity in which the foreign national will engage will be functional, whether the applicant honours his or her tax obligations, and whether the applicant demonstrates evidence of satisfactory financial support.
An applicant may not work in Ghana while his or her work application and other papers are being processed.
The foreign national is not permitted to change employers after he or she receives a work permit. If unavoidable, the applicant must notify the Immigration Service within one week after the applicant knows he or she is changing jobs.
Time: Work permits must be renewed annually; however, long-term (two or more years) work permits are issued if the applicant has worked consistently in Ghana for at least three years.
Fees: Ranges from GHC 10,500 – 21,000. For a full fee schedule, please refer here.
Step 3: Notification to the relevant immigration authority
When a foreign national begins to work for an employer in Ghana, the employer will have to give notice to the issuing authority for work permit or Immigrant quota no later than seven days after commencement of employment in a prescribed form, indicating the commencement date with a copy to the Director of Immigration. Additionally, a letter of guarantee in respect of repatriation expenses of the employee (in the event the employee is required to be repatriated) should be submitted to the Director.
Similarly, the employee will have to give notice of the commencement date to the issuing authority not later than 7 days after the commencement of employment with a copy to the Director of Immigration.
Step 4: Obtain a residence permit
Foreign nationals employed under a company’s AIQ are automatically granted residence permits by the Ghana Immigration Service. He or she must apply for the permit to be stamped into his or her passport.
The initial residence permit is valid for one year. Applications for renewals must be submitted to the Director within one month before the other permit expires. Approvals are subject to the discretion of the Director of Immigration. Applicants must normally be sponsored by established entities in Ghana or by universities or international organizations.
The following documents should be submitted when applying for a residence permit:
Automatic Immigration Quota
Companies registered with the GIPC are entitled to an immigrant quota (that is, the maximum number of expatriates the foreign investor can employ), based on the level of foreign equity paid-up capital invested in Ghana. This is known as the Automatic Immigration Quota (AIQ).
The bands of foreign equity capital investments as regards the grant of AIQ are:
Paid-up capital Quota
US$50,000 – US$250,000 1
US$250,000 – US$500,000 2
US$500,000 – US$700,000 3
Above US$700,00 4
*The above contributions can be made in their GH¢ equivalent.
Within the last band, additional quota can be negotiated with the GIPC.
Applications a made to the GIPC for the grant of the AIQ in respect of a named applicant. The AIQ serves as an automatic work permit.
Once you get in touch with us, one of our consultants will take all the work off your hands, coordinate with our local partners to get all the required permits organised, provide the processing time, costs, document-checklist and keep you informed through the process. Contact us to know more.
|Category||Description of Visa|
A foreign national may invest or start a business in Ghana by registering the company with the Registrar of Companies and then by applying to the Ghana Investment Promotion Centre, indicating his or her field of investments.
Dependants are covered under the AIQ, however this does not entitle them to work, as such they are required to apply for a work permit in their own right. Residence permits may be issued to a spouse and other dependents of a principal residence permit holder. Issuance is subject to the condition that the dependents may not undertake remunerated employment without obtaining the appropriate authorisation.
The following documents must be submitted:
1. Completed visa application form
When setting up a company you may want to consider these factors:
Generally, Ghana does not impose any restrictions on foreigners wishing to invest in the country. In deciding on whether to invest in Ghana, you may also want to consider the following when making your decision :-
Location will be another factor. Separate cities and regions may have different rules, costs and availability. It is always recommended to seek advice from relevant professionals, such as business or legal advisors, accountants and others depending on your need.
There are three types of business forms available to foreign companies in Ghana. Each of these business forms has distinct advantages and disadvantages, as well as differing scope of business activities, registration requirements and minimum capital requirements. In most cases it will depend on the degree of commitment a company has to Ghana and the planned business activity.
When setting up a company in Ghana, you have the following options:-
This article provides a general guideline for foreign businesses on entering Ghana for business purposes. In particular, it looks at common pathways to establishing a business presence in Ghana, generally through a corporation or branch office. In addition, various economic, tax and regulatory factors are provided throughout as a source of useful information to assist those who will enter the Ghanaian economy. The guide also looks at some immigration requirements such as obtaining appropriate visa status.
Data is based on the time of writing, November 2015 or closest available dates.
In Ghana, investors can either set up a wholly-owned limited liability company or set up a joint venture with a local partner.
Under the Ghana Investment Promotion Centre Act (GIPC Act), all companies in which there is foreign participation are required to register with the GIPC, except for companies operating in the mining and petroleum industry.
1.Limited liability company (local company)
A limited liability may be either public or private, with the only difference being the public may subscribe to shares in the public company.
Investment capital requirements
Ghanaian LLCs can be either fully or partly owned by foreigners.
The minimum capital requirements vary with respect to the level of foreign shareholding the company has. Wholly- owned foreign companies have a minimum capital requirement of US$500,000. Enterprises with foreign participation that are involved in trading have a minimum capital requirement of US$1,000,000. All of these may be paid in cash or its equivalent in goods by way of equity capital.
Accounting / auditing requirements
Every company is required to keep proper books of accounts.
The Companies Code also requires statutory audits for every company.
For joint ventures, the minimum equity shareholding is US$200,000 (in either cash or capital goods) to be contributed by the foreign partner. The local partner who is a citizen cannot have less than 10% equity participation in the joint enterprise.
Steps for Incorporation
Step 1: Acquire a Tax Identification Number (TIN)
Applicants are required to obtain a TIN before proceeding to company registration. The applicant needs to complete a Ghana Revenue Authority Taxpayer Registration Form. Organisation. After processing, the Ghana Revenue Authority (GRA) officers will send a text message to the applicant to collect the TIN.
Agency: Registrar-General Department or Ghana Revenue Authority
Time: 2 days
Cost: No charge
Step 2: Check for availability of company name and submit company documents to obtain the certificate of incorporation
A company name search can be conducted at the Companies Registry (customer service office) to ascertain the availability and acceptance of the proposed name of the company and submit the company documents for registration. The Registrar may, on a written application and on payment of the prescribed fee, reserve a name pending registration of a company: section 15(13) of the Companies Act 1963 (Act 179)
The applicant may pick up a prescribed Form A and submit the completed forms at the in-house bank. The relevant forms may be found here. The applicant must also submit four copies of the Company regulations and a copy of its Tax identification number form.
The applicant will need to provide the following information in the forms:
The tax identification number (certificate) is usually obtained by the Registrar General’s Department on behalf of the incorporated company. Four or five copies of the company regulations and Forms 3 and 4 are required (auditors, banks, solicitors, company secretaries may each require a copy). A letter from an auditing firm must also be presented.
Agency: Companies Registry Customer Service Office
Time: 1 day
Name search GHC 25, Name reservation GHC 50 , Complete set of Incorporation forms GHC 15 , Registration fees GHC 200 , GHC 5 per certification of regulations (assuming 3 certificates)
Alternatively, the fee schedule may be found here.
Step 3: Authentication of forms required for the certificate to commence business
Applicants must complete Form 4 for the issuance of the certificate to commence business. The forms have to be certified before a Commissioner of Oaths.
Agency: Commissioner of Oaths
Time: 1 day
Cost: GHC 5-10
Step 4: Obtain the certificate to commence business from the Registrar-General Department
After incorporating the company, the founder must complete Forms 3 and 4 within 28 days, indicating, among other information, the names, addresses, businesses, and occupations of the company’s secretary and directors; name and address of the company’s qualified auditor; the address of its registered office; its register of members; the amount of stated capital; and the number of issued and unissued company shares. All the company directors as well as the secretary must sign forms 3 and 4. 0.5% of the stated capital will also be collected by the Registrar-General’s Department on behalf of the Internal Revenue Service (IRS) as a commencement tax.
The Registrar of Companies now automatically registers new companies with the IRS. VAT is charged at 15% including a national health insurance levy (NHIL) of 2.5%.
Agency: Registrar-General Department
Time: 2 days
Cost: 5% of the stated capital as commencement tax + GHC 10 (registration fee with the Ghana Revenue Authority).
Step 5: Deposit paid-in capital in an account
The applicant must present the following documents to deposit paid-in capital in a bank account: copies of company regulations; the certificate of incorporation and the certificate to commence business; and signatures of the authorised company representatives.
Step 6: Apply for business licenses at the Metropolitan Authority
The cost to apply for a Business Operating Permit (BOP) at the Metropolitan Authority depends on the type of business and the category in which it falls under. Documents to be submitted also depend on the type of enterprise (for example, restaurants must have permits from the fire department and the Town and Country Planning Authority—and, among other documents, an inspection certificate from the Ghana Tourist Board).
Agency: Metropolitan Authority
Time: 7 days
Cost: GHC 270
Step 7: Inspection of work premises by the Metropolitan Authority
An officer will visit the business premises to make an inspection, following which a report will be made to the Revenue Mobilization Subcommittee of the Metropolitan Assembly. The subcommittee meets to deliberate on the report and then recommend to the Executive Committee of the Metropolitan Authority whether any adjustment is required.
Agency: Metropolitan Authority
Time: 1 day
Cost: No charge
Step 8: Register for social security
The company must attach the list of employees, their respective salaries and social security numbers, and the company’s certificate of incorporation and certificate to commence business when registering for social security.
Agency: Social Security Office
Time: 1 day
Cost: No charge
Step 9: Register with the GIPC
Foreign investors are required to register their companies with GIPC. Investors are required to complete Investor Registration Forms (Form GIPC/R1) in triplicate. The GIPC will formally register the investment within five (5) days from the date of orderly receipt of these forms (and its attachments).
Time: 5 days
Cost: Varies according to enterprise and industry, ranges from GHC 1050 to 42,000. A full fee schedule can be found here.
Foreign corporations operating in Ghana can operate as a branch office without the need to incorporate. However, it is generally advisable to incorporate rather than set up a branch office in Ghana, given the numerous drawbacks associated with having a branch office.
In Ghana, a branch is considered an ‘external company’, meaning it is a body corporate formed outside the Republic of Ghana that 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.
Investment capital requirements
Accounting / auditing requirements
The branch is required to submit a profit-and-loss account and balance sheet (as in the limited liability return of accounts) annually, or at intervals not exceeding 15 months.
Steps for Set-Up
Registration of a branch will require the following documents:
On receipt of the documents, they are registered in the Registrar of External Companies and the particulars gazetted.
A liaison office is not an independent legal entity and hence, may not conduct direct commercial or revenue-generating activities with the execution of contracts, receipt of funds, sale or purchase of goods, or provision of services. Its sole purpose is to collect market information and promote the foreign corporation’s business.
As a liaison office is considered an external company, the set-up process is similar to that of a branch.
Whether to incorporate in Ghana, and what sort of entity to setup are just two of the many choices companies must make when expanding into a new market.
If the company intends to have staff in Ghana, they must also decide whether they will administer that employment internally or use a Global Employment Organisation to handle payroll and employment responsibilities. A GEO Employer of Record solution is an attractive alternative where
The complexity of employment regulations in Ghana makes the use of a GEO advisable coupled with local legal counsel to ensure full compliance with employment laws, for example the drafting of local contracts for workers.
Shield GEO provides a comprehensive service in Ghana allowing companies to deploy their staff quickly with reasonable, clearly stated costs and timeframes. The company contracts directly with Shield to employ and payroll their staff on their behalf in Ghana.
Shield GEO then becomes the Employer of Record. Shield GEO assumes the legal responsibility for these employees, sponsoring them on work permits, complying with local employment law and running their monthly payroll. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Ghana. Read more about outsourced employment through Shield GEO.
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