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Incorporation

Setting up a company in Ghana

When setting up a company you may want to consider these factors:

  1. Business 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 :-

    • The industry and type of business that will be conducted
    • Nationality of the headquarters / individuals (s)
    • Presence of existing trade agreements or relationships
  2. Location

    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.

Your Options

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:-

  • Limited liability company
  • Branch office
  • Liaison office

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.

Corporation

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.

2.Joint venture

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:

  • Nature of the business that subscribers intend to engage in
  • Full names of subscribers and shareholders, their addresses, percentage shareholdings, occupation, and any directorships in any other company
  • Full name and address of company secretary and auditors (a letter of consent to act as auditor is attached)
  • A declaration that the minimum nominal capital complies with the requirement that a company 100% Ghanaian-owned have minimum nominal capital of at least GHC 500

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

Cost:

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.

Agency: Bank

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).

Agency: GIPC

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.

 

Branch office

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

None

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:

  • Name of company (name of head office entity);
  • Nature of business;
  • Name and details of local manager;
  • Authorised capital (for head office);
  • Issued capital (for head office);
  • Address of principal place of business in Ghana
  • Address of registered office in country of incorporation;
  • Name and address of a person authorised by the company to accept service of process and other documents on its behalf
  • English translation of memorandum and articles of association of head office, duly notarised by a notary public in the country of registration
  • A power of attorney executed in favour of the local manager, which must be notarised as well; and
  • Certificate of incorporation of Head Office.

On receipt of the documents, they are registered in the Registrar of External Companies and the particulars gazetted.

Liaison Office

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.

Outsourcing Employment Through a GEO Employer of Record Service

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 company is looking to setup an office quickly
  • 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

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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