Ghana is a West African nation with a population exceeding 30 million people. In recent years, Ghana has made notable progress in fostering an environment conducive to entrepreneurship and business development. With its abundant natural resources, stable political climate, and expanding middle class, Ghana is increasingly attracting local and foreign investors interested in Ghana business incorporation by tapping into its growth potential.
That being said, setting up a company in Ghana can be daunting. There are many factors to note, such as legal compliance, market research, and competition. In this blog, we’ll provide valuable insights into setting up a company in Ghana and the challenges and opportunities that come with it. Whether you’re a seasoned entrepreneur or a novice looking to start a business in Ghana, our blog can be a valuable resource to help you navigate the Ghanaian business landscape.
Business Opportunities in Ghana
In Ghana, access to electricity has steadily increased over the past two decades, with over 85% of the population now having access. The country has a diversified energy mix, including the largest hydropower project in West Africa. With the help of international development partners, Ghana is upgrading its electricity transmission and distribution systems to become a regional exporter of power.
Ghana’s oil and gas industry is also growing, attracting companies and partners. While Nigeria remains the hub for oil and gas in West Africa, Ghana is becoming an increasingly important player in the sector, providing opportunities for auxiliary services.
Mining significantly contributes to Ghana’s economy, with exports of gold, bauxite, manganese, diamonds, salt, and lithium providing opportunities for companies. The Ghanaian government is looking to expand local value-added processing in this sector.
The construction industry in Ghana is experiencing sustained growth, particularly in road and highway construction, coastal works, and residential buildings. This sector’s success depends on the government budget and financing availability. The construction equipment sub-sectors, including reconditioned equipment, also present promising opportunities.
The automotive industry is a new opportunity for businesses planning for Ghana business incorporation. The government seeks to establish the country as a hub for assembling automobiles in the sub-region. Tax waivers and other incentives are being offered to attract Original Equipment Manufacturers to establish assembly plants from Semi Knocked Down and Completely Knocked Down kits.
Benefits of Starting a Business in Ghana
Ghana offers several advantages of doing business in Ghana to owners looking to set up an offshore company. If you plan to start a business in Ghana, here are some advantages you need to know:
- Ghana is politically stable, with democracy widely accepted across all institutions. Both local and foreign businesses can challenge and suggest regulation improvements through appropriate channels without fear. The Ghana Investment Promotion Center promotes laws that attract and protect businesses.
- The media in Ghana is considered one of the most liberated in Africa and plays a pivotal role in business activities. Vibrant television/radio stations, newspapers, and the internet provide a good platform for businesses to thrive, particularly through advertisements.
- Ghana is one of the most stable countries (politically) in Sub-Saharan Africa, providing a peaceful environment for businesses to thrive. The country has sustained political stability, allowing it to gain in socio-economic activities such as business, healthcare, and housing.
- Ghana’s educational institutions continue to expand in quantity and quality, with education receiving the largest chunk of the government’s annual budget. This has resulted in an increasingly skilled labor force, making the country attractive for tertiary students across West Africa and providing businesses looking for company incorporation in Ghana with a large pool of bright students and graduates to recruit.
- A positive and competitive business environment is essential for business growth and prosperity for companies planning to start a business in Ghana. Ghana has tried to create an atmosphere that supports and encourages business growth. The Ghana Investment Promotion Center (GIPC) and other agencies have been instrumental in attracting foreign businesses to Ghana. This resulted in an increased number of private and public business enterprises, making the nation the most cutting-edge location for businesses and a favorable investment destination for foreign businesses in Africa.
- The Ghanaian government has streamlined bureaucratic procedures and reduced the hurdles businesses face during offshore company registration in Ghana. While corrupt and fraudulent practices still exist, decreasing bureaucratic obstacles has made setting up a company in Ghana more transparent and efficient.
- With a rapidly increasing skilled labor force, businesses are highly valued in Ghana. While unemployment remains a significant challenge, new business ventures are usually welcomed and receive a friendly reception from the Ghanaian public.
Requirements for Starting a Business in Ghana
It could seem like an excellent idea to start a business in Ghana, but with the correct guidance, it can be more accessible.
To start a business in Ghana, companies must master the correct procedures. The Ghana company incorporation requirements are as follows:
Name of the company
- For Ghana business incorporation, you must choose a unique name for your company that is not already registered in Ghana.
- It is recommended to check the name’s availability before submitting your application.
Nature of business
- You need to state the type of business your company will engage in.
- This will help determine the legal and regulatory requirements you must fulfill for Ghana’s new company incorporation.
Address of the company
- You must provide a physical address for your company in Ghana.
- This address will be used for communication with the authorities and other stakeholders.
Stated capital
- This refers to the amount of money that the company has been authorized to issue as shares.
- It is important to note that certain businesses to do in Ghana have a minimum capital requirement.
Email address and telephone number for the company
You will need to provide contact information that can be used by the authorities and other stakeholders to reach your company.
Taxpayer Identification Number (TIN)
- All directors, shareholders, company secretaries, and auditors must have a TIN before the company can be registered.
- This is a unique identification number issued by the Ghana Revenue Authority for tax purposes.
Directors
To start a business in Ghana, a company can have one or more directors, either local or foreign individuals. However, foreign individuals must obtain work and temporary residence permits before serving as directors. Corporate directors are not allowed. Directors are appointed through a general meeting of shareholders, who hold the power to appoint directors.
Types of Business Structures in Ghana
In Ghana, several business structures are available for entrepreneurs planning to start a business in Ghana, each with its benefits and requirements. Here are the options for business to do in Ghana:
Sole proprietorship
- This entity is exclusively owned by an individual who is entitled to all the business profits and personally liable for all business liabilities.
- In Ghana, such entities are not required to be incorporated at the Registrar General’s Department (RGD). Still, if the owner wants to operate under a business name, they must register such a name at the RGD.
Company limited by shares
- This is a business entity registered at the Registrar General’s Department that comprises at least two individuals acting as directors and at least one person (company or individual) acting as a shareholder.
- The company’s objects are usually for profit generation, and the value of their shares limits the liability of the members.
Company limited by guarantee
- This company structure is best suited for not-for-profit organizations, as its objects cannot include any for generating profit.
- These businesses are not subject to corporation tax, but any staff paid a salary must pay income tax.
- The amount of their guarantee restricts the members’ liabilities.
Company unlimited by shares
- This business entity is registered at the Registrar General’s Department. It comprises at least two individuals acting as directors and at least one person (company or individual) acting as a shareholder.
- Its objects are usually for the generation of profit, but the liability of the members is not limited by the value of their shares.
- This business type is typically used for entities that provide professional advice and services, such as law firms.
External company
- An external company is a corporate body incorporated outside of Ghana that seeks to register a place to start a business in Ghana.
- Although an external company is subject to Ghanaian tax laws (income and corporate tax), it is regulated by the laws of the country where it was initially incorporated.
Incorporated partnership
- Where two or more people (up to a maximum of 20) decide to go into business together for the generation of profit, they may do so through an incorporated partnership registered at the RGD. There is no protection of a partner’s personal assets in an incorporated partnership, and the acts of one partner bind the whole partnership.
Company Registration Process
For company registration in Ghana, specific tasks must be completed. The following are the steps to incorporate a company in Ghana:
- Certain documents must be filed with the Companies Registry for the company registration process in Ghana.
- These include certified true copies of the company’s constitutional documents from its country of origin and information such as the company’s name, business nature, registered office and principal place of business in Ghana, and details of authorized shares (if applicable).
- The documents should also provide information on the amount paid for shares and the amount still to be paid (if applicable).
- Additionally, one or more persons authorized to act as the company’s Local Manager(s) must be specified, along with their names and addresses.
- These individuals should be competent to be appointed as directors in Ghana.
- A board resolution and power of attorney are required to authorize their appointment and enable them to act on the company’s behalf.
- Finally, the name of the process agent authorized to accept service of the process and other documents on the company’s behalf should be included.
How Much Does it Cost to Incorporate a Company in Ghana?
The cost of incorporating a company in Ghana for the first year is US$6,950, while the annual costs for the second and subsequent years are US$0. The average total fees per engagement, including company incorporation in Ghana, company secretary, and corporate bank account, amount to US$18,650.
Entity types | Cost (USD) |
LLC | 18, 650 |
JSC | 23, 650 |
External company | 17, 300 |
Are Foreigners in Ghana on Certain Passes Allowed to Start a Business in Ghana?
In the Accra Metropolitan Assembly (AMA) jurisdiction, every business planning for company incorporation in Ghana is expected to obtain a Business Operating Permit. This permit is essentially a license that allows businesses to operate within the city of Accra. You can apply for your Business Operating Permit from your local assembly office. The following are the requirements to do business in Ghana:
- Purchase an application form for the Business Operating Permit from the Cash Office of any Sub-Metros.
- Complete the application form and submit it to the Revenue Mobilization Officer (RMO) at your District Assembly’s office.
- You must have registered with the Registrar General’s Department and obtained a Business Registration Certificate.
- You must provide a tax clearance certificate from the Internal Revenue Service (IRS).
- You must provide a registration certificate from any other recognized bodies if applicable.
To avoid delays or complications in Ghana business incorporation, fulfill all these requirements before applying for the Business Operating Permit.
Government Assistance for Foreign-owned Businesses
Company incorporation in Ghana has become more accessible due to the simple business rules established by the Ghanaian government. Some grants to start a business in Ghana are mentioned below:
- The Government of Ghana has prioritized increasing foreign direct investment (FDI) and recognizes the significance of fostering a climate that will allow the private sector to grow.
- In pursuit of this goal, officials are implementing regulatory and other reforms, such as digitizing government processes and improving support services offered by the Ghana Investment Promotion Center (GIPC), to enhance the ease of setting up a company in Ghana and make investing in Ghana more appealing.
- According to the 2013 GIPC Act, the GIPC is responsible for registering, monitoring, and maintaining records of all business enterprises that wish to start a business in Ghana.
- Additionally, sector-specific laws regulate investments in minerals and mining, oil and gas, industries within Free Zones, banking, non-bank financial institutions, insurance, fishing, securities, telecommunications, energy, and real estate.
- Some of these laws, such as those in the oil, gas, and power sectors, may include local content requirements that could discourage international investment. Foreign investors must comply with the GIPC Act and sector-specific laws.
- GIPC leadership has pledged to work more closely with the private sector to address investor concerns, but the laws have not changed significantly. Further information on investing in Ghana can be obtained from GIPC’s website, www.gipc.gov.gh.
- In 2019, Ghana passed the Companies Act 2019 (Act 992), which introduced several changes to improve the regulation of businesses.
- One key change was the creation of the Office of the Registrar of Companies, an independent office responsible for registering and regulating all businesses in Ghana. This office will be separate from the Registrar General’s Department, which will continue registering non-business transactions like marriages.
- The new law has simplified some registration processes by eliminating the requirement for a certificate to commence business and the need for companies to state their business objectives. Companies wishing to start a business in Ghana can now engage in any lawful activity without restrictions.
- Additionally, the law has expanded the role of the company secretary, who must now have educational qualifications and some background in company law practice and administration. Alternatively, they must have undergone training under a company secretary for at least three years.
How Can Multiplier Help?
Starting a business overseas requires extensive planning, research, and financial considerations. However, partnering with a Professional Employer Organization (PEO) and Employer of Record (EOR) company can simplify the process. Multiplier is a reputable PEO and EOR company that offers a comprehensive range of HR, payroll, and compliance solutions to businesses in various industries and locations.
When businesses choose Multiplier, they can entrust their HR responsibilities to our experts, who will manage their global employee team, streamline the onboarding process for new hires, and handle payroll without the need to establish a subsidiary. Our qualified professionals will assist in recruiting workers from around the world and expanding their business internationally. With Multiplier’s day-to-day HR support, businesses can focus on growing their company while we manage the business’ administrative aspects.