Doing Business In Ghana
A Brief Guide
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The Registrar General’s Department is the Institution mandated by Law to register and keep records pertaining to all business entities within the jurisdiction of Ghana.
Business entities may be set up under any of the following statutes:
Registration of Business Names Act, 1962 (ACT 151): Companies incorporated under this statute are referred to as Sole Proprietorships. In such Companies, the liability of the business owner and the business are one and the same.
Incorporated Private Partnerships Act, 1962 (ACT 152): Partnerships are legal entities set up for business comprising two or more persons that share management, profits and liabilities.
Companies Act, 2019 (ACT 992): The following business entities may be set up under the Companies Act:
Company limited by Guarantee: Is a company used for non-profit making organizations that require legal personality.
Company Limited by Shares: Is a Company that limits the liability of its members to the number of shares to which they subscribe.
External Company: Is a body corporate registered outside Ghana with an established place of business in Ghana. It‘s capacity is only representative of its Holding Company, and it cannot accordingly directly engage in any business
Companies incorporated with foreign shareholding are mandated under Ghanaian law to register with the Ghana Investment Promotion Centre (GIPC). Registration with the GIPC has a number of advantages namely;
Grant of immigrant quotas for foreign nationals depending on the amount of foreign equity contribution introduced into the country.
All foreign individuals doing business in Ghana must obtain a work permit from the Ghana Immigration Service (GIS) in compliance with the laws of Ghana. Permits may be obtained by way of the automatic immigrant quota granted by the GIPC or by direct application to the GIS supported by relevant documentation. Permits issued are valid for a period of one year and can be renewed with the issuing authority for a specified fee.
The Ghana Revenue Authority is the statutory institution that oversees the admistration of taxes in Ghana. Ghana has Double Taxation Treaties with a number of countries including, the United Kingdom, South Africa, France and Germany. Generally, the following taxes are applied to corporate entities and individuals in the course of doing business in Ghana:
Corporate Tax: Companies currently pay 25% of profits realized from business activities.
Pay As You Earn: These are levied on salaries of employees in graduated rates according to their earnings.
Indirect Tax: Are taxes collected by intermediaries on behalf of the Government and include Withholding Tax (from 5% upwards depending on the nature of the transaction/service); Value Added Tax (3% flat rate for retailers and wholesalers of goods (with exceptions) and 15% on goods and services); and National Health Insurance Levy (2.5%) & GETFUND (2.5%). The Value Added Tax and National Insurance Levy are combined into a rate of 17.5%.
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