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Doing Business in Ghana

Business Laws

An entrepreneur, irrespective of nationality, can set up a business enterprise in Ghana in accordance with the provisions of any of the following legal instruments:

• The Companies Code, 1963 (Act 179);
• The Partnership Act, 1962 (Act 152);
• The Business Name Act, 1962 (Act 151).

Minimum Foreign Capital Requirement

A foreign investor may team up with a Ghanaian entrepreneur or company for a joint venture, usually in the form of a partnership or a limited company. However, under the Ghana Investment Promotion Centre Act, 1994 (Act 478), a minimum equity capital of $10,000 is required from any foreign investor who intends to enter into a joint venture partnership with a Ghanaian in any area of economic activity, except trading. In trading, the minimum equity capital requirement is $300,000.

The foreign shareholder is required to satisfy this minimum equity capital either in cash transferred through Ghana's banking system or its equivalent in the form of goods, plant and machinery, vehicles or other tangible assets imported specially and exclusively to establish the enterprise. The imported items must be covered by a Destination Inspection Report issued by an accredited inspection company, stating the value and condition of the goods. Consideration for goodwill of a business or services rendered by partners cannot be used to satisfy the minimum foreign equity capital.

Foreigners are permitted 100 % ownership of an enterprise provided the investor satisfies section 19 (2b) of the GIPC Act, 1994 (Act 478). Wholly foreign-owned enterprises must have a minimum paid up capital, the equivalent of $50,000 in all areas of economic activity except import trading, where the minimum equity capital requirement is $300,000. In the cases of export trading and liaison (external) offices, there is no minimum foreign equity requirement.

Establishment of Business

Application for registration of a company is made directly, or through agents or solicitors, to the Registrar-General. A company is duly registered after the company's regulations have been submitted to the registrar of companies and a certificate of incorporation issued. A specified fee is paid on presentation of the regulations. The information required includes:

• the name of the company with the word "Limited" as the last word in the name;
• the nature of the company's business;
• a statement that the company possesses all the powers of a natural person of full capacity;
• the names of the first directors of the company;
• a statement that the liability of the company is limited;
• the share capital and its division into shares of no par value;
• limitation on the powers of the Board of Directors in accordance with section 202 of the Companies Code;
• any other lawful provisions relating to the constitution and administration of the company.

The requirements for a public company limited by shares are similar to those stated above, except that the public can buy shares.

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