GENERAL INFORMATION The Republic of Ghana is an independent republic in West Africa. Ghana is bordered by Burkina Faso to the north, Togo to the east and the Ivory Coast to the west. The Gulf of Guinea of the Atlantic Ocean lies to the south of Ghana.
Area: 238 533 km2
Population: 24.3 million
GDP: USD 38.24 billion (2010)
Internet domain: .gh
Languages: English (official language)
Working week: Monday – Friday
Exports: Cocoa; gold; timber; manganese; bauxite; aluminium; diamonds; Tuna
Imports: Capital equipment; petroleum; consumer goods; food; intermediate goods
There are three forms of companies commonly used by foreign investors:
- Company limited by shares.
- Company limited by guarantee.
- Unlimited liability company.
The following steps need to be taken in order to incorporate a company:
- Particulars of the proposed company are required to be filed with the Ghanaian Companies Registry. These include the company name, registered address, object and nature of the company, the directors, the particulars of the company secretary, auditors and shareholders.
- Following filing of the particulars at the Companies Registry and the payment of the prescribed fee in addition to a percentage of the company's stated capital, applications will take between 10 to 15 working days to be processed.
- The company's constituting documents must be presented to the Registrar of Companies, and if it is in line with the Ghanaian Companies Act, it will be registered and certified under the Registrar's seal.
Once the above requirements have been complied with, a certificate to commence business will be issued.
Foreign investors intending to invest in Ghana are required to register with the Ghana Investment Promotion Centre (GIPC). Registration ensures that the company has complied with various mandatory legal requirements in respect of laws pertaining to foreign investment in Ghana.
Before commencing business, further information on the company must be provided which includes particulars of the company and a declaration of compliance pertaining to the minimum capital of the company.
Unlimited liability companies must file annual returns for the first time after eighteen months of incorporation.
If the company is wholly foreign owned, the minimum equity capital investment required is USD 300 000. A non-trading company which is wholly foreign owned, requires a minimum equity capital investment of USD 50 000. A joint venture with a Ghanaian national requires a minimum equity capital of USD 10 000.
A company must have a company secretary and the company secretary may be a corporate entity but should be locally based. Furthermore, the company should have a minimum of two directors in place, one of whom must be resident in Ghana at all times. Local nationality is, however, not required. The appointed auditors must also be qualified Ghanaian auditors.
Are local shareholders required?
Foreigners are allowed 100% ownership of companies provided minimum share capital investments are met.
Establishment of external companies are allowed. The following need to be filed with the Registrar of Companies, within one month of establishing a place of business:
- Certified copy of the charter, statutes, regulations, memorandum and articles, or other instrument constituting or defining the constitution of the company.
- A statement in duplicate in the prescribed form providing the required particulars regarding the company.
The registration process will take approximately 10 to 14 days.
Ghana currently has no national competition law or policy in place. However, in certain instances specific sector or industry legislation makes provision for competition related aspects.
Further to the paragraph above, competition law is not regulated in Ghana and there are, accordingly, no specific merger controls in place.
Competition is not regulated in Ghana and restrictive practices are therefore not regulated.
Abuse of dominance
Owing to the lack of competition regulation in Ghana, there are no abuse of dominance provisions to contend with.
As Ghana has no competition legislation and/or policy in place, there are no specific sanctions with regard to competition law.
Currently Ghana does not have consumer protection legislation. However, a draft consumer protection bill has been discussed in parliament and is expected to be promulgated soon.
When in force, the act will aim to protect consumers from unfair trade practices which adversely affect the health, safety and economic interests of consumers. An independent consumer protection authority will also be established in order to enforce the legislation and also to coordinate all consumer activities.
Some of the key features of the anticipated legislation are as follows:
- The statute will make provision for a specialised court which will only deal with consumer protection related issues and thereby ensuring a speedy redress to certain disputes.
- There will be hotlines and emergency lines for quick information and response flow on certain consumer related issues.
Since the promulgation of the Data Protection Act, 2012 (Act 843) (DPA) data protection in Ghana is now regulated by the standard provisions of the DPA. A Data Protection Commission (DPC) has also been established. The DPC is responsible for monitoring the processing of data information, and ensuring that such processing does not violate the provisions of the DPA.
Some of the key principles of the DPA are:
- Personal data information may only be processed if such processing has been registered with and authorised by the DPC.
- Personal data information is allowed to be transmitted to a foreign country, provided that such foreign country is registered with the DPC.
- The data subject as well as the DPC must be notified of any data breach committed.
The Ghanaian judicial system is structured into Superior Courts and Lower Courts. The Superior Courts comprise (in descending order of jurisdiction) of the Supreme Court, the Court of Appeal and the High Court, with the Lower Courts comprising of the Circuit Courts, District Courts and Juvenile Courts. The District Court is governed by the District Court Rules, the High Court is governed by the High Court Civil Procedure Rules and the Court of Appeal by the Court of Appeal Rules. The Supreme Court is governed by C.I. 16 of 1999.
Security by foreign litigants
An application has to be made for an order of security for costs and the applicant is likely to be successful if it can show that the plaintiff resides outside the jurisdiction and is unlikely to be able to pay the costs of the defendant. However, where a plaintiff has assets in Ghana the court is unlikely to make such an order.
The court has a discretion to order costs of and incidental to the legal proceedings and may determine the total extent of costs payable after considering a wide range of factors.
There is a single professional roll for all lawyers in Ghana who practice as both barristers/ advocates and solicitors/attorneys. All lawyers have rights of appearance before all trial courts and tribunals in Ghana.
Alternative dispute resolution
Arbitration is a recognised form of dispute resolution and the Alternative Dispute Resolution Act was brought into effect in 2010, largely reflecting the UNCITRAL Model Law. The National Arbitration Institute is the Alternative Dispute Resolution Centre and there are private arbitration bodies such as the Ghana Arbitration Centre as well as registered associations such as the Association of Certified Mediators and Arbitrators.
Labour Act 651 of 2003 and the Labour Regulations 2007.
Particulars of employment
A contract of employment must be in writing for workers employed for 6 months or longer and a written statement of particulars must be given to an employee within 2 months of commencement of employment.
Forms of contracts
- A monthly contract of employment.
- A weekly contract of employment.
- A contract of employment determinable at will.
- The Act does not refer to the use of fixed term contracts, there is no provision for a maximum duration of probation save for a reference to reasonable duration determined in advance but probation periods and conditions are generally provided for in collective agreements.
Termination / Dismissal
- A termination is unfair if the employer fails to prove that the reason is fair or made in accordance with a fair procedure.
- A fair termination is possible in cases of incompetence or lack of qualification in relation to the work for which the employee is employed, or the proven misconduct of the employee, or redundancy, or a legal restriction is imposed on the employee prohibiting him from performing the work for which he is employed.
- Provision is made for a definition of unfair labour practice.
Dispute resolution mechanisms and remedy
- The National Labour Commission exercises adjudicating and dispute settlement functions in complete independence. In settling an industrial dispute, the Commission shall have the same enforcing powers as the High Court and enjoy the same privileges and immunities in regard to its proceedings.
- Unfair termination – Reinstatement, re-employment or compensation.
- Unfair labour practice:
- An order forbidding the person to engage or continue to engage in such activity.
- Where this involves the termination of employment or of the conditions of his employment, an order requiring the employer to take such steps to restore the position of the employee and to pay the employee a sum specified as compensation for any loss of earnings attributed to such contravention.
- Where this involves the making of a contribution to a trade union, an order that the trade union refund the contribution.
Until 2006, Ghana operated a strict foreign exchange control regime which was replaced by the Foreign Exchange Act of 2006 (the Act), which has introduced a more liberal regime.
Under the Act, exchange controls (which were previously exercised by the Bank of Ghana) are now operated by authorised dealer banks, which are only required to report their foreign exchange dealings to the Bank of Ghana.
Repatriation of funds or dividends and payments in foreign currency to or from Ghana between a resident and a non-resident, or between non-residents, must be made through an authorised dealer bank. There are no exchange control or currency regulations, as long as the transaction is effected through these banks.
The Internal Revenue Act 2000 was passed in 2001 to administer direct taxes. Ghanaian income tax is defined as the total of a person's assessable income from business, employment and investment less allowable deductions.
Types of taxable income
Residents are taxable on their worldwide income whilst non-residents are taxable only on income derivied from Ghana.
In addition, non-residents are subject to a range of withholding taxes on certain types of payments deriving from Ghana.
The income tax rate is 25%.
Petroleum income tax may not exceed 50%, capital gains tax is taxed at 15%. Dividends are taxed at 8%, royalties are taxed as ordinary income for residents whilst rent on properties is taxed at 8%.
Double taxation treaties
Ghana currently has double taxation agreements with Belgium, Denmark, France, Italy, Netherlands, Serbia, South Africa, and the United Kingdom.
Published in April 2015
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.