Investment Code Ghana

Ghana, aiming to attract foreign direct investment (FDI) and boost its economy, operates under a legal framework primarily governed by the Ghana Investment Promotion Centre (GIPC) Act, 2013 (Act 865). This act establishes the GIPC as the primary agency responsible for promoting and facilitating investment in Ghana.

The GIPC Act outlines the minimum capital requirements for foreign investors. Generally, a foreign investor requires a minimum foreign equity investment of US$200,000 in a joint venture with a Ghanaian partner who holds at least 10% equity, or US$500,000 for a company wholly owned by foreign nationals. This requirement is in place to protect small and medium-sized Ghanaian businesses and ensures that foreign investment significantly contributes to the Ghanaian economy.

Certain sectors are reserved exclusively for Ghanaians, reflecting the government’s commitment to promoting local participation and ownership. These sectors typically include petty trading, operation of taxi and car rental services (with fleet less than 25 vehicles), and the sale of goods in markets, stalls or kiosks. Specific updates regarding reserved activities are published by the GIPC periodically. Foreign investors are encouraged to partner with Ghanaians in other sectors, contributing capital, technology, and expertise.

The Ghanaian government offers various incentives to attract investment. These may include tax holidays, import duty exemptions, and reduced corporate tax rates, particularly in priority sectors such as agriculture, manufacturing, renewable energy, and tourism. The specific incentives available depend on the industry, location, and the scale of the investment. Details are subject to change, and investors should consult the GIPC and the Ghana Revenue Authority (GRA) for the most up-to-date information.

Registering with the GIPC is a crucial step for foreign investors. Registration involves submitting the necessary documentation, including proof of capital importation and a business plan. The GIPC reviews the application and, upon approval, issues an investment certificate, which confers certain benefits and protections under the Act. The registration process ensures that investments align with Ghana’s development priorities.

Ghana also has bilateral investment treaties (BITs) with several countries. These treaties provide additional protections for foreign investors, such as guarantees against expropriation without compensation and the right to international arbitration for investment disputes. BITs further enhance investor confidence and stability. It’s important to consult the specific provisions of the relevant treaty, if applicable.

Enforcement of contracts and property rights is critical for a favorable investment climate. Ghana’s legal system, while improving, still faces challenges in these areas. The government is actively working to strengthen the judiciary and improve the efficiency of the dispute resolution process. Investors should conduct thorough due diligence and seek legal advice before entering into any agreements.

In conclusion, the GIPC Act is the cornerstone of Ghana’s investment code, aimed at attracting foreign investment while promoting local participation and sustainable development. Understanding the minimum capital requirements, reserved sectors, incentives, registration process, and available protections is crucial for any foreign investor considering doing business in Ghana. Staying updated with amendments to the act and relevant regulations from bodies such as the GIPC and GRA is vital for compliance and maximizing investment opportunities.