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Financing a Business in Ghana

There are a series of incentives in place in Ghana to encourage foreign investment. All sectors are open to foreign investment and 100 per cent foreign ownership:

• Corporate Tax - 8 per cent on export income from the non-traditional export sector, 25 per cent for Hotels and 35 per cent for all other sectors.
• Location incentives: Tax rebates for manufacturing in certain locations.
• Tax Holidays: ranging from 3 to 10 years for sectors such as agricultural processing, real estate and rural banking.
• Other tax concessions such as accelerated depreciation for plant and building expenditure, 5 years Loss Carry-Over in all sectors, and fully deductible Capital Expenditure for R&D.
• Custom Duties: 100 per cent exemption for plant, machinery, equipment and parts thereof.

Minimum Foreign Capital Requirement

A foreign investor may team up with a Ghanaian entrepreneur or company for a joint venture, usually in the form of a partnership or a limited company. However, under the Ghana Investment Promotion Centre Act, 1994 (Act 478), a minimum equity capital of US$10,000 is required from any foreign investor who intends to enter into a joint venture partnership with a Ghanaian in any area of economic activity, except trading. In trading, the minimum equity capital requirement is US$300,000.

The foreign shareholder is required to satisfy this minimum equity capital either in cash transferred through Ghana's banking system or its equivalent in the form of goods, plant and machinery, vehicles or other tangible assets imported specially and exclusively to establish the enterprise. The imported items must be covered by a Destination Inspection Report issued by an accredited inspection company, stating the value and condition of the goods. Consideration for goodwill of a business or services rendered by partners cannot be used to satisfy the minimum foreign equity capital.

Foreigners are permitted 100 per cent ownership of an enterprise provided the investor satisfies section 19 (2b) of the GIPC Act, 1994 (Act 478). Wholly foreign-owned enterprises must have a minimum paid up capital, the equivalent of US$50,000 in all areas of economic activity except import trading, where the minimum equity capital requirement is US$300,000. In the cases of export trading and liaison (external) offices, there is no minimum foreign equity requirement.

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