Ghana remains one of the most viable countries in Africa for foreign investment.

With its stable political environment as well as its relatively strong economic growth credentials including recording a growth rate of 6.7% at the end of Q1, 2019, Ghana is expected to close the year 2019 as Africa’s 5th fastest growing economy with a growth rate of 7.6%.

This growth has been largely fueled by the growth and investments in the services, non-traditional export and extractive sectors of the economy.

A notable transaction in the extractive sector in recent years is the US$2billion bauxite deal between Ghana and the Sinohydro Group Limited, which was concluded after a meeting between Ghana’s President Nana Akuffo Addo and China’s President Xi Jinping in Beijing in September 2018.

The deal, which is a barter trade deal, will involve the exchange of Ghana’s alumina from its bauxite deposits for a loan facility of US$2billion from the Sinohydro Group for infrastructural development across the country.

It is expected that the funds will be used to construct roads, bridges, schools, housing, medical facilities in areas where they are much needed.
Deals like the US$2 Billion bauxite barter deal show the growing relationship between Ghana and China and supports the need for increased economic collaborations between both countries.

Among others, numerous opportunities arise from the related value chain for collateral business for other firms in both countries.

1.0 Economic Opportunities in Ghana

As one of Africa’s dynamic and fastest growing economies, Ghana’s growth is fueled by revenues and significant investments in key sectors of the economy namely: energy, real estate, information technology, agriculture and tourism. Some of the identifiable opportunities in these sectors are presented below.

1.1 Energy

The energy sector has seen significant developments in recent years due to the growing demand for energy from both residential and commercial ends.

The key developments are driven by legislative changes, which have created new categories of industry opportunities whilst ensuring a fair competitive environment for both local and foreign investors.

The key energy subsectors replete with opportunities include oil, natural gas, thermal power, hydropower and renewable energy.

Current opportunities include:

· The development of off and on grid renewable energy sources.

· The expansion and rehabilitation of existing hydro and thermal plants.

· Power management and distribution.

· Commercial production and management of the natural gas sector.

1.2 Real Estate

1.2.1 Residential properties

Investment in private residential properties has been growing consistently anchored by the growing population and the middle-income class in particular. The gap in residential homes is estimated to be in a deficit of about 2 million housing units as at March 2019.

This presents a huge opportunity for private investments in the sector as well as public-private partnerships to drive low-income residential properties. The growth in demand for residential properties has led to a growth in the mortgage market.

1.2.2 Commercial office properties

There is a growing demand for commercial and mixed-use properties in the major cities of Accra, Tema, Takoradi, Kumasi, and Tamale.

1.2.3 Industrial properties

The growth in commerce has propelled the demand for industrial properties such as warehouses and industrial parks. The economic activities in most of the industrial estates will increase with investment in power.

1.2.4 Commercial retail and hospitality properties

Retail mall development has picked up in the last 5 years largely driven by the population demographics and the growing middle class and its unique demand architecture.

There are multiple shopping malls and hotels being developed across the country dominated by a mix of local sponsors and private equity firms, which are supported by syndications led by local and foreign banks.

Opportunities for private sector-led investments still abound without any signs of abatement.

1.3 Information, Communication and Technology (ICT)

Ghana represents Africa’s fourth-largest market with respect to mobile and internet penetration. There are major regulatory and state-driven developments to improve the quality of service and infrastructure.

Major opportunities exist in the deployment of IT infrastructure, proprietary software, e-commerce, and digital broadcasting which can be exploited with various foreign direct investments and through Public-Private Partnerships.

1.4 Agriculture

Ghana has the benefit of a wide area of fertile arable land coupled with productive labor and a reliable water supply system.

Current opportunities in the agricultural sector include commercial food cultivation relying on mechanized production methods, Staple crop Processing Factories, Professional Agriculture Services, Equipment, and Machinery Pools.

1.5 Tourism

Tourism contributes significantly to the non-export revenue sources of Ghana. Key tourism attractions in Ghana include natural locations, national monuments, festivals, and cultural celebrations.

Investment opportunities in the sector include water recreation, ecotourism facilities, park and reserve developments, development of cultural and archaeological sites, development of hospitality facilities including hotels, restaurants, fun parks, and conference facilities.

These opportunities require foreign investors to have a beacon of law. As such we have provided below, general information that investors should keep in mind as they consider investing in Ghana.

Business Incorporation

The major business forms in Ghana are sole proprietorships, private and public companies, external companies, and partnerships. However, most businesses opt to be registered as limited liability companies due to its perceived benefits over the other business forms.

The incorporation and regulation of the activities of businesses is managed by the Registrar General’s Department (RGD) and the process can be completed manually or electronically.

To incorporate a new entity in Ghana, the promoters of the business have to confirm from the RGD if the intended business name is available, and reserve the same. The first directors and secretary of the company are also required to obtain their Tax Identification Numbers (TIN) from the Ghana Revenue Authority (GRA).

Subsequently, the Company Regulations (Constitution) and other statutory forms shall be submitted to the RGD to complete the process. Prior to the filing, the promoters are required to have named at least two persons to serve as first directors, a company secretary, and an auditor.

Some of the details required to be submitted to the Registrar of Companies prior to registration include:

The signed registration forms which should capture amongst others:

· Name(s) and details of directors, auditors, and the company secretary

· Company Details.

· Share Details: Authorized shares.

· Email address, website, physical address, and postal address of the company.

Upon registration, the Registrar shall issue the Certificate of Incorporation and the Certificate to Commence Business as authorization for the commencement of trading.

External Companies: This business form is available to foreign businesses who desire to have an ‘established place of business’ in Ghana. This business type dispenses with the need to have directors because it is considered a branch of the parent company and not a separate legal entity.

To register an external company, a local representative called the ‘local manager’ is appointed who will submit copies of the parent company’s registration documentation to the RGD for registration.

Additional documents to be submitted include:

· Certified copies of the charter, regulations, articles, or instruments defining the constitution of the principal company.

· A statement providing particulars of the company including its name, nature of business, details of shares, names of the local manager, address of the principal company, and details of a named process agent in Ghana.

· Completed statutory Form 20.

2.0 Other Operating Licenses and Permits

In general, after the incorporation of the business, an investor looking to establish a business in a regulated sector will have to apply to the applicable regulator or head of the applicable government department and pay the required fees.

Some major industries and their regulators in Ghana are: a) Food, Drugs and Beverages Food and Drugs Authority. b) Construction Ministry of Works and Housing. c) Banking Bank of Ghana. d) Securities Securities and Exchange Commission e) Mining Minerals Commission f) Telecommunications National Communications Authority.

3.0 Tax Compliance

To be tax compliant, all registered companies are required to be registered with the Ghana Revenue Authority (GRA) for the purposes of paying corporate and other taxes.

3.1 Corporate Tax

A company is taxed at a standard rate of 25% on taxable corporate income. However, particular sectors enjoy special concessionary rates as well.

3.2 Value Added Tax (VAT)
VAT is charged at a flat rate of 12.5% on the supply of goods and services except those expressly exempted or zero-rated under the Act.

3.3 Withholding VAT Scheme

This represents an advance payment of taxes deductible from payments made on qualifying transactions. VAT Withholding Agents are required to continue to withhold VAT at a rate of 7% on the taxable value for VAT.

4.0 Business Incentives for Investors

To facilitate foreign direct investments, a plethora of incentives have been put in place by various state agencies such as:

Tax Holidays from the Ghana Revenue Authority
Trade specific benefits from the Ghana Investment Promotion Centre and the Ghana Free Zones Board and

Other legislation specific benefits.

Accessing these benefits is subject to registration with these agencies and complying with the required condition precedent.

4.1 Tax Holidays

Tax concessions in Ghana, are presently determined based on the sector of operation and business location.

Sectoral concessions

The incentives are available for key sectors including real estate (low-income housing), agriculture, waste processing, and companies located in free zones enclaves. The tax holiday periods range between 3-10 years from the commencement of operations.

Locational Incentives
These represent tax rebates for manufacturing and agro-processing businesses in particular locations outside the national capital.

4.2 Incentives for companies operating under the Ghana Free Zones Program

The Ghana Free Zones Program is designed to position Ghana as an export driven economy. The strategy is to promote local manufacturing and export through the establishment of designated geographical locations as Export Processing Zones (EPZs).

The program is managed by the Ghana Free Zones Authority and it issues licenses for developers, manufacturers, commercial and service operators.

An investor seeking to do business in the Free Zones is required to submit an application for license after incorporation of the entity to the Chief Executive Officer of the Ghana Free Zones Authority.

The lead-time for issuance of licenses is 28 days from the receipt of the application. The key eligibility requirements include:

The applicant’s business should be export-oriented

The operations should add value to raw materials for export

The overall operations should be environmentally friendly.

Incentives for investors developing and operating businesses under Ghana’ Free Zones Program include:

Full exemption from the payment of duties and levies on export goods originating from the free zones.

Full exemption from duties related to imports of goods for use in production within the free zones for the first 10 years of operations.

Full exemption from income tax for the first 10 years.

Relief from double taxation for foreign investors and employees.

No limitations or restrictions on repatriation of dividends, payments for loan servicing, technology transfer payments or remittance of proceeds from sale of any interest in a free zone asset.

Free Zone investments are guaranteed against nationalization and expropriation.

5.0 Labor & Immigration Issues

The relationship between employers and employees is regulated by the 1992 Constitution of Ghana, the Labor Act of Ghana, and the Factories, Offices, and Shops Act.

The laws stated above provide for ‘equal pay for equal work’ without discrimination on grounds of sex, religion, or ethnicity. These laws further regulate the payment of wages and salaries to all classes of workers and a guarantee of decent working conditions for workers.

Wages become due and are payable as agreed upon between the employer and the employee and the minimum payments are based on the minimum statutory wage levels.

Ghanaian laws abhor any form of compulsion to get employees to work. Also, with the consent of the employer, employers are allowed to make deductions for statutory and other ad hoc payments to any provident, pension, or other fund or scheme agreed to by the worker; or to cover the loss or damage caused by the worker.

5.1 Working Hours

The work hours in Ghana are the standard eight-hour daily shifts translating into a forty-hour a week schedule. Work shifts are allowed but the cumulative number of working hours should not exceed the forty-hour limit per week. Workers and employers reserve the right to define their opening and closing times between themselves.

5.2 Holidays and paid vacations

Employees are entitled to rest, leisure, and reasonable limitation of working hours and the observance of all approved holidays as part of paid working days. Also, all companies operating in Ghana are obligated to observe any approved holiday.

5.3 Employment of expatriates

The Ghana Immigration Services forbids foreign employees from working in Ghana unless they obtain the requisite work and resident permits.

These permits are obtainable from the Ghana Immigration Service upon the submission of an application and the payment of the requisite fees.

It is the responsibility of the employer to submit the applications on behalf of the employee and provide the supporting documentation for approval.

The Ghana Investment Promotion Centre (GIPC) grants immigrant quotas, which allows the employment of a particular number of foreign employees upon the submission of an application to the Centre and the payment of the requisite fees.

The quota allocation decision is also based on the total investment contribution by the foreign company.