Doing business and investing in Ghana - www.pwc.com/gh 2018
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www.pwc.com/gh
Doing business
and investing in
Ghana
2018
Preface
Doing Business and Investing in Ghana – 2018 is published by
PricewaterhouseCoopers (PwC) Ghana. This publication is intended to provide a
quick overview of the business environment in Ghana.
We have endeavoured to take reasonable care in compiling this publication,
which presents the position of Ghana in respect of the geographic facts,
economic performance, economic sectors, investment climate, forms of business
organisations, business and accounting practices, taxation regimes, etc., as at the
dates stated in this publication.
Please note that information presented in this publication has been prepared for
quick reference and general guidance purposes only, and does not constitute the
provision of professional advice on any particular matters.
PwC is a global network of firms, each of which is a separate legal entity. The
firms that make up the network are committed to working together to provide
industry-focused assurance, tax and advisory services to build public trust and solve
important problems in society.
The Ghana firm, which is a full member of the network of firms of PwC, has
unrestrained access to the global firm’s vast resource base of proprietary
knowledge, methodologies and experience.
Our team of multidisciplinary professionals is able to assist you with every matter
related to this publication and to advise investors as to the best way to do business
in Ghana.
Office locations in Ghana and Sierra Leone
Accra office
No.12 Airport City Telephone: +233 (0) 302761500
Una Home, 3rd Floor Facsimile: +233 (0) 302761544
PMB CT 42 Cantonments Email: pwc.ghana@gh.pwc.com
Accra – Ghana Website: www.pwc.com/gh
Takoradi office
Plot No. 31, GK Ntow Street Telephone: +233 (0) 312028416/7
South Chapel Hill Facsimile: +233 (0) 312028410
Takoradi – Ghana Email: pwc.ghana@gh.pwc.com
Website: www.pwc.com/gh
Sierra Leone office
No. 2 MIK Drive Telephone: +233 (0) 78361701
Off Barrack Road, Murray Town, Freetown Email: pwc.ghana@gh.pwc.com
Sierra Leone Facsimile: +233 (0) 30 2761544
Contents Ghana at a glance 5 Republic of Ghana 5 Tourism and places of interest 5 Population and people 5 Education 6 Economy 6 The Government Sector 8 The National Digital Property Addressing System (NDPAS), National Identification Project (NIP) and Interoperable Electronic Platform (IEP) 8 Government of Ghana Infrastructure for Poverty Eradication Project (IPEP) 9 Paperless port project 9 Ghana/Cote d’Ivoire maritime dispute: The International Tribunal for the Law of the Sea (ITLOS) win 9 The economy of Ghana 11 Investing In Ghana 15 Setting up a business in Ghana 15 Tax identification number (TIN) 15 Types of companies 15 Statutory/regulatory registration 16 Operating a foreign account 17 Repatriation of funds 17 Immigration 18 Economic Sectors 21 Financial services (banks and other financial institutions) 21 Mining services 23 The capital market 26 Information and Communication Technology (ICT) 29 Agriculture and agribusiness 31 Upstream oil and gas 34 Downstream oil and gas 35 Oil refinery in Ghana 36 Electricity 36 Services 38 Key chambers of commerce and trade associations 39 Key unions 41
The Ghanaian tax regime 43 Value Added Tax (VAT) and National Health Insurance Levy (NHIL) 43 Communications service tax (CST) 45 Customs and excise duties 45 Special petroleum tax 47 Income tax 47 Withholding taxes 51 Anti-avoidance schemes 54 Administrative procedures 54 Tax Identification Number (TIN) 54 Tax clearance certificates (TCC) 55 Accounting Issues 57 Financial reporting standards 57 Developments in accounting standards 57 Firm information 69 Our profile 69 Audit and assurance 69 Tax & tax advisory services 70 Company secretarial services 71 Advisory services 71 Our partners and directors 73 References 77 Glossary 81
Ghana at a glance
Republic of Ghana • Lake Bosomtwi
Capital city: Accra • Aburi Botanical Gardens; and
• Wli Waterfalls.
Location: West Africa
Longitude: 7.9465 degrees N Population and people
Ghana’s current population is estimated
Latitude: 1.0232 degrees W at about 28.9 million (27.7 million in
2016), with females forming 49.1% of
Population: 28.9 million the total population. According to the
United Nations Statistics Division, the
Official language: English population density was 119 persons per
square kilometre as of November 2017.
Currency: Ghana Cedi (GH¢) The greatest concentration of people is in
the Greater Accra Region. The country’s
Time zone: GMT population grew by 2.39% in 2016 and
is expected to reach approximately 29
million by the beginning of 2018.
Climate: Tropical
Ghana has a youthful population, with
Average temperature: 26°C (about 79°F)
some 60% of the population falling
between the ages of 15 and 64 years.
Independence: 6 March 1957 The age dependency ratio is 66.7%,
implying that the dependent section of
Government: Democracy the population is more than half of the
working population.
Gross Domestic Product (GDP): Approximately
US$44 billion (as at September 2017) The average life expectancy at birth in
Ghana is 61 years (59.8 years for males
Inflation rate: 11.8% (December 2017) and 62.3 years for females). This is below
the average life expectancy of the global
Tourism and places of interest population, which stands at 71 years.
Ghana is a favourite tourist destination in Ghana is blessed with a rich diversity of
West Africa. There are many tourist sites and ethnic groups, each with its own unique
attractions across the country, notably: culture and way of life. The official
language and mode of communication
• Kakum National Park is English, which is taught in all schools.
The major ethnic groups in Ghana
• Elmina Castle
include the Akans (the Akyem, Ashanti,
• Cape Coast Castle and Fort William Kwahu, Akuapem, Bono and others),
who form about 47.5% of the country’s
• Mole National Park
total population. Other ethnic groups are
• Paga Crocodile Pond the Ga-Dangme (7.4%), Ewes (13.9%),
• Nzulezu Stilt Village Mole-Dagbani (16.6%), Guan (3.7%),
Gurma (5.7%), Grusi (2.5%),
PwC 5
Mande (1.1%) and others (1.4%). Ghana Education Service
Ghanaians are known to be very
• It is responsible for pre-tertiary
hospitable people, and this trait spans
education.
across all the ethnics groups. They
are very religious, as the following National Council for Tertiary
distribution depicts: Christianity Education
accounts for 71.2% (Catholic – 13.1%,
Protestant – 18.4%, Pentecostal/ • This is the Council that oversees the
Charismatic – 28.3%, others – 11.4%), administration of tertiary institutions
Islamic worship for 17.6%, traditional of education in Ghana. It serves as
worship for 5.2%, other religions for the supervisory and regulatory body
0.8% and no religion for 5.2%. that advises government through
the Minister of Education on policies
relating to tertiary education.
Education
National Board for Professional and
The school-going age in Ghana is from
3-21 years old. The educational structure Technician Examinations
of Ghana comprises: • It has oversight responsibility over
professional and technical institutions
• Pre-school (ages 3-5); that are not universities.
• Basic/Primary school (equivalent to Economy
elementary school) (ages 6-11);
The services sector is the largest
• Junior high school (equivalent to contributor to Ghana’s GDP (62% as of
middle school) (ages 12-14); the end of the second quarter of 2017).
• Senior high school (equivalent to high The industrial sector is the next largest
school) (ages 15-17); and sector of the economy (26.5% as at the
end of the second quarter of 2017),
• Tertiary education/Institution followed by the agricultural sector with a
equivalent to college/university (ages 11.5% contribution to GDP at the end of
18-21). the 2017 second quarter.
In Ghana, the tertiary educational
institutions comprise the polytechnics With about 778, 044 metric tonnes of
and universities, colleges of education cocoa beans having been produced in
institutions and nursing training the 2015/2016 crop year, Ghana is the
colleges. second-largest producer of cocoa in the
world after Côte d’Ivoire.
The Ministry of Education has oversight
responsibility over educational issues Ghana is currently a net importer of
in the country. The Ministry oversees petroleum products. However, expected
various councils and bodies that are production of oil and gas from the
responsible for co-ordinating and Tweneboa, Enyenera, and Ntomme
implementing national policies on (TEN) and Sankofa oilfields will increase
education. These bodies include: output in 2018 and improve the balance
of trade position.
6 Doing Business and Investing in Ghana
Gold production was expected to increase
in 2018 after a 45% increase in output
from 2015 to 2016. Total gold output
was 4.1 million ounces, attributable
mainly to artisanal miners (1.5 million
ounces in 2016, from 267 662 ounces in
2015). The issue of illegal gold mining
affected gold revenue earned by the
country in 2016. The Minister of Lands
and Natural Resources indicated that
approximately $2.3 billion worth of
gold was lost through illegal mining. As
such, the government has rolled out the
Multilateral Mining Integrated Project to
curb this practice.
Ratings agency Fitch revised the outlook
on Ghana’s credit rating from negative
to stable and affirmed their B credit
rating, mainly due to progress made
in stabilising the economy with an
expected improvement of GDP growth,
declining inflation, a stable currency and
increased foreign exchange reserves. In
addition, Fitch is of the opinion that the
current government will make progress
in reducing the budget deficit after the
fiscal slippage experienced prior to the
elections in November 2016.
PwC 7
The government sector
Ghana practises a democratic system The office of the Attorney-General of
of governance. Parliamentary and Ghana has powers to prosecute matters
presidential election was held every four on behalf of the State and is required to
years in accordance with the provisions be joined in all legal actions against the
of the 1992 Constitution. The most State.
recent elections were in 2016, with the
country experiencing a smooth transition The Office of the Special Prosecutor was
in government. recently set up as a specialised agency to
investigate specific cases of corruption
The Constitution provides a clearly involving public officers, and politically
defined separation of powers among the exposed persons in the performance of
legislative, executive and judicial arms of their functions, as well as individuals
government. in the private sector implicated in
the commission of corruption and to
prosecute these offences on the authority
There are ten administrative regions in
of the Attorney-General.
Ghana with 254 metropolitan, municipal
and district assemblies (MMDAs). Ghana
practises a system of decentralisation The National Digital Property
where the various regions and MMDAs Addressing System (NDPAS),
are allowed some degree of autonomy in National Identification Project
decision-making.
(NIP) and Interoperable
Ghana also maintains various structures
Electronic Platform (IEP)
of traditional rulership recognised under The government aims to formalise the
the Constitution. The role of traditional country’s economy by establishing a
leaders is to mobilise people to pursue national database for easy identification
developmental goals at the local and and increased access to information on
community levels. Traditional chiefs in its citizens, locations and businesses. It
Ghana have been organised into regional launched the NDPAS and NIP in 2017
and national houses of chiefs. to enhance business activities in Ghana
through the creation of a secure personal
Ghana’s legal system is based on the identification system for citizens and
1992 Constitution, with statutes being establishing proper national address and
enacted by Parliament; and rules, location systems, respectively. These
orders and regulations enacted through projects are also expected to improve
delegated legislation, common law security and facilitate the deployment of
and customary (traditional) law. The emergency services.
hierarchy of the court structure in Ghana An IEP was launched in May 2018 for the
is as follows: financial sector with the aim of reducing
the risk of doing business in that sector.
• the Supreme Court (i.e. the highest Also known as the bank interoperability
court); system, it will interface mobile money
transactions with the banking system
• the Court of Appeal, and the High to monitor and facilitate electronic
Courts (these two courts and transactions within the country. Once it
the Supreme Court are together has been implemented, it will also work
referred to as the superior courts of together with the NIP to create a robust
judicature); and credit database which will reduce the
• The Circuit and District courts, which cost involved in obtaining financing from
form the lower courts. financial institutions.
8 Doing Business and Investing in GhanaAs the country continues to leverage on Paperless port project
technology in the business space, many
government institutions – including The government implemented a
the Registrar General’s Department paperless port operations system
(RGD), the Passport Office and the which is aimed at increasing efficiency
Ghana Revenue Authority (GRA) – at the ports by reducing the number
are deploying online systems to serve of hours spent in clearing goods and
their customers. The registration of increasing tax revenue. The aim is to
businesses, applications for passports use increased technology and improved
and filing of some taxes in specific GRA infrastructure and human resources
offices can now be conducted online. to achieve a reduced average number
These innovations have not come without of hours that shipping vessels spend at
challenges, but the government remains the ports, to four to eight hours from
positive that all the online functionalities the recorded average of one hundred
will be fully functional by the end of and three hours in 2016. Increased
2018. port efficiency is expected to increase
revenue mobilisation and reduce the
stress associated with clearing goods
Government of Ghana while opening up the ports to more
Infrastructure for Poverty business, since 80% of Ghana’s trade
Eradication Project (IPEP) volumes are currently done through sea
transportation.
In an attempt to eradicate poverty,
the government has instituted several
initiatives under the IPEP to be Ghana/Cote d’Ivoire maritime
implemented by three development dispute: International Tribunal
authorities: the Northern Development for the Law of the Sea (ITLOS)
Authority, the Middle-Belt Development win
Authority and the Coastal Development
Authority. Under the IPEP, US$1 million In September 2017, Ghana won a three-
will be disbursed to each of the 275 year-long maritime border dispute case
constituencies across Ghana to undertake against Cote d’Ivoire after a favourable
development projects at a decentralised ruling by the Special Chamber of the
level. The projects under consideration International Tribunal for the Law of
include the government’s flagship the Sea (ITLOS). ITLOS’s first ruling
projects: one-district-one-factory; one- in 2015 placed a moratorium on new
village-one-dam and one-district-one- projects within the TEN oil fields which
warehouse. The projects are expected to prevented Tullow Oil from drilling
stimulate economic activity in different additional oil wells in the area. Following
parts of the country and drive the the ruling, Ghana’s oil production is
government’s rural industrialisation expected to be boosted as it will be able
agenda. to keep its oil concessions and further
develop the oil fields.
PwC 910 Doing Business and Investing in Ghana
The economy of Ghana
• The Ghanaian economy significantly to enhance Ghana’s attractiveness as
outperformed the global economy and an investment destination, including
all major sub-groupings in 2017, and a review of the Ghana Investment
the same is forecasted for 2018. While Promotion Centre (GIPC) Act and
Ghana’s GDP growth rate is expected efforts to make Ghana the business
to decline slightly to 6.8% in 2018, it is hub of the West African sub-region.
still expected to be higher than that of These measures will increase the
the world economy. attractiveness of the country to foreign
investors and enhance Government’s
• Ghana’s economic growth rate
industrialisation agenda.
was higher than that of the global
economy and most of sub-Saharan • The World Economic Outlook (WEO)
Africa in 2017. The country has report for October 2017 estimates that
been an attractive investment the average inflation rate in advanced
destination as a result of the relative economies will be 1.7% in 2018, the
political stability and improved same as in 2017. For emerging markets
macroeconomic conditions over the and developing economies (EMDEs),
last two decades. Government is also average inflation is expected to be
putting in place additional measures 4.2% in 2017, with a marginal increase
to 4.4% in 2018.
Global Inflation Rates
5.0%
4.7%
4.7%
4.5% 4.4%
4.3%
4.2%
4.0%
3.5%
3.2% 3.1% 3.3%
3.0%
2.8% 2.8%
2.5%
2.0% 1.7% 1.7%
1.5% 1.4%
1.0%
0.8%
0.5%
0.3%
0.0%
2015 2016 2017 2018
World Economy Advanced Economies
PwC 11While global inflation is expected to In 2017, there was no significant change
increase moderately, developments in in the structure of the economy. The
advanced economies present risks to services sector continues to be the largest
the projected level of inflation. The US contributor to GDP. With the exception
Federal Reserve increased rates twice of the industry sector which expanded,
in 2017 and the UK Treasury interest the services and agriculture sectors
has followed suit by increasing rates contracted marginally. The 2018 Budget
for the first time in almost a decade. Statement estimates that significant
These are likely to make government growth was achieved in the economy in
securities in advanced economies more 2017, with real GDP growth estimated
attractive, leading to a potential increase at 7.9% at the end of 2017, higher than
in investment in these securities. Such the target growth of 6.3%. This higher-
a development will strengthen hard than-budgeted growth was driven by
currencies such as the US Dollar. A an increase in oil production as a result
stronger US Dollar can put exchange- of the deferral of the Jubilee floating
driven inflationary pressure on the production storage and offloading
Ghana Cedi. (FPSO) turret remediation projected
from the third quarter of 2017 to 2018
and the commencement of production in
the Sankofa-Gye Nyame oilfield.
Sectoral Structure of the Economy
2017 25.6% 18.5% 55.9%
2016 24.3% 18.9% 56.8%
2015 25.1% 20.3% 54.6%
2014 26.6% 21.5% 51.9%
2013 27.8% 22.4% 49.8%
2012 28.0% 22.9% 49.1%
Service Agriculture Industry
12 Doing Business and Investing in Ghana20% Growth per sector 2013 – 2017
17.7%
45.0
34.81
36.10 38.96 40.0
15% 32.24
33.52
35.0
10.0%
30.0
10% 25.0
6.6% 6.3%
20.0
5.7% 5.6% 5.7%
4.6% 4.7% 15.0
5% 4.3%
2.8% 3.0% 10.0
0.8% 5.0
0% -0.3% -0.5%
0.0
-5.0
-5%
2013 2014 2015 2016 2017
Agriculture Industry Services GDP (GH¢bn)
The structure of the Ghanaian economy 2018, allowing for increased production
is not expected to change significantly in in 2017 and a lower forecast production
the short to medium terms. The current in 2018 than originally projected. The
structure has the characteristics of a manufacturing subsector is expected to
mature or stable economy, where growth slowly recover from the severe hit it took
in the industry and services sectors at the height of the power crisis, with a
drives overall economic growth. There 2017 provisional outturn of 2.7%.
are a number of agriculture and industry
related policy initiatives which are
expected to drive growth. The services
sector is also expected to continue
growing, driven by the information and
communication subsector. As indicated
in the 2018 Budget Statement, there
are plans to invest heavily in agriculture
with a focus on mechanisation and also
to ensure rapid industrialisation of the
economy.
Growth in the industry sector for 2017
was estimated at 17.7%. This was largely
driven by the mining and quarrying
subsector, of which upstream petroleum
constitutes a significant share. Upstream
petroleum had a provisional outturn of
69.2% in 2017, a sharp reversal from the
negative 16.9% recorded in 2016. This
figure is higher than previously targeted
and is principally due to the deferral of
the FPSO turret remediation project to
PwC 1314 Doing Business and Investing in Ghana
Investing in Ghana
Setting up a business in Ghana • Registered office and principal place of
business and postal addresses;
Business can be conducted under
either a limited liability company (local • Authorised number of shares;
company) incorporated under the laws • Stated capital;
of the Republic of Ghana or an external
company (branch). The regulator • Issued shares;
responsible for this is the RGD. • Name and address of subscribers/
shareholders; and
Tax identification number (TIN) • Name of company secretary.
Prior to the registration of an entity
Stamp duty
the directors and the secretary of
incorporated entities or the local A 0.5% stamp duty is payable on the
managers of branches are required to stated capital of the company.
register for and obtain a TIN.
Fees
Types of companies In addition to the stamp duty, a
Subsidiary (local company) subsidiary must pay a registration fee of
approximately US$75 (GHS330).
This is a company limited by shares
incorporated under the Ghana
Companies Act, 1963 (Act 179). A
External company
subsidiary can either be wholly or partly An external company (also known as
owned by a Ghanaian or a non-Ghanaian. a branch) is a body corporate formed
outside the Republic of Ghana that
Registration requirements has an established place of business in
of a subsidiary Ghana.
The information and documents required
The registration of a local company for the registration of an external
involves the filing of the required company are as follows:
forms with the RGD in order to obtain
certificates of incorporation and
• Name of company (name of head
commencement of business, profile
office entity);
(forms 3 and 4) and a certified true copy
of the company’s regulations. • Nature of business;
• Name and details of local manager;
The documentation/information
required for the registration of a • Authorised capital (for head office);
subsidiary includes the following: • Issued capital (for head office);
• Address of principal place of business
• Name of company; in Ghana;
• Nature of business of the company; • Address of registered office in country
• First directors (a minimum of two of incorporation;
is required), of whom one must be • Name and address of process agent;
present in Ghana at all times;
• Memorandum and articles of
• Number of shares with which the association of head office, duly
company should be registered (shares notarised by a notary public in the
of no par value); country of registration;
• Name and address of auditor;
PwC 15• A power of attorney executed in favour c. Trading entity
of the local manager, which must be
A trading entity that is either wholly
notarised as well; and
or partly owned by a non-Ghanaian
• Certificate of incorporation of the requires a minimum equity capital of
head office, duly notarised in the US$1,000,000 in either cash or capital
country of registration. goods relevant to the investment.
Statutory/regulatory Ghana Free Zones Board (GFZB)
registration Companies operating in industries
Apart from incorporating or registering other than mining, petroleum or timber
entities with the RGD, entities are can obtain a license from the GFZB to
required to be registered with other operate as a free zone entity. To qualify
regulatory bodies (as discussed below) as for this, the entity needs to export at
well, depending on the industry that the least 70% of its goods or services. GFZB
entity will be operating in. registration enables the company to
enjoy a tax holiday for a period of ten
years; thereafter, it will be required to
Ghana Investment Promotion pay corporate tax of 25% on local sales
Centre (GIPC) and 15% with respect to exports.
Under the GIPC Act of 2013 (Act 865)
(GIPC Act), all companies in which there Minerals Commission (MC)
is foreign participation are required to
register with the GIPC. All mining and mine support service
companies are required to register with
the MC in order to operate in the mining
The following are the minimum capital sector. The registration entitles them to
requirements under the GIPC Act: certain incentives, such as support in
the form of the granting of an expatriate
a. A joint venture with Ghanaian immigration quota, exemption from
participation import duties and authorisation to
invoice and receive and make payments
In a joint venture with at least 10%
in foreign currency subject to approval
Ghanaian participation, the foreign
from the Bank of Ghana.
partner is required to contribute
not less than US$200,000 (in either
cash or capital goods) relevant to the Petroleum Commission (PC)
investment. All entities in the upstream oil and
b. A wholly owned foreign entity gas sector, whether contractors,
subcontractors or sub-subcontractors, are
An entity wholly owned by a non- required to register with the PC and pay
Ghanaian requires a minimum the required registration fees.
amount of foreign equity capital of
US$500,000 in either cash or capital
To operate in the upstream oil and
goods relevant to the investment.
gas sector as a foreign investor, one is
required to establish a joint venture (JV)
with an indigenous Ghanaian company
(IGC) that has at least a 5% or 10%
ownership in the JV in the case of a
contractor or subcontractor respectively.
16 Doing Business and Investing in GhanaNational Communication Authority The threshold for transfers abroad from
(NCA) this account is US$ 10,000 without any
initial supporting documents. Thereafter,
Registration with the NCA will be transfers must be accompanied by
required if businesses will be importing supporting documents.
telecommunications equipment,
including servers, cellular phones, fax Transfers from FEAs to foreign currency
machines, cordless phones and radio accounts (FCAs) are not allowed.
equipment.
Transfers from FEAs to Cedi accounts are
Social Security and National allowed.
Insurance Trust (SSNIT)
Every employer is required by law to Foreign currency account (FCA)
register with the SSNIT and pay Tier 1 Both residents and non-residents may
pension contributions in respect of its open FCAs with any authorised dealer
employees. bank in Ghana.
They are also required to register with a FCAs should be credited with unrequited
private pension fund manager for Tier 2 transfers such as transfers from abroad
pension contributions on behalf of their for investment or embassy transfers.
employees.
Transfers from FCAs to FEAs are allowed.
Ghana Revenue Authority (GRA) Transfers from FCAs to Cedi accounts are
Entities carrying on business in Ghana allowed.
are required to register with the GRA for
tax purposes. FCAs are free from restrictions, and
transfers to and from these accounts
Other regulatory bodies may be made freely by authorised dealer
banks in convertible currencies.
Companies operating in certain specific
industries, such as banking, insurance,
etc., need to obtain licenses from their Repatriation of funds
relevant regulatory bodies. For example, Funds in respect of branch profits,
banks need to obtain an operating license repayment of loans, dividends and
from the BoG, and insurance companies management/technical fees are allowed
need to obtain an operating license from to be repatriated in foreign currency
the National Insurance Commission after the appropriate withholding taxes
(NIC). have been paid and the respective
tax clearance certificates obtained as
Operating a foreign account in evidence of payment.
Ghana The transferring entity must also
Foreign exchange account (FEA) support these transfers with supporting
documentation (e.g. audited accounts,
Both residents and non-residents are the loan agreement, technology transfer
permitted to maintain an FEA. agreement registration certificates etc.).
FEAs should be credited with foreign
exchange generated from activities in
Ghana, such as proceeds from exports of
goods and services.
PwC 17Immigration Short-term or temporary quota
Ghana Immigration Services (GIS) is the
from the GIPC
institution responsible for the issuance Aside from the AEQ, an entity can
of the various types of permits, including negotiate with the GIPC for additional
work and residence permits, visitor’s quotas, known as short-term or
permits and emergency entry visas, temporary quotas. These are not granted
among others. automatically but are issued on a
discretional basis for a maximum period
There are, however, other institutions of five years or less.
that also issue work permits aside from
the GIS which are discussed below. Unlike with the AEQ, an entity which
requires this quota from the GIPC will
Work permits have to provide a justification to the
GIPC as to why they should be given the
Work permits can be obtained from additional quota.
the GIPC in the form of an automatic
expatriate quota (AEQ) or from the
Ministry of Interior (MOI) in the form of
Obtaining immigrant quotas from the
an immigrant quota or from the GIS. Ministry of Interior (MOI)
The MOI also issues immigrant quotas
Obtaining an AEQ from the GIPC (IQs), which are equivalent to work
permits. Once an IQ has been issued
The AEQ is an automatic work permit to an expatriate, the applicant can
granted to expatriates by the GIPC based apply to the GIS for a residence permit
on the foreign equity capital investment without having to apply for a work
made by a company. To benefit from permit.
this, the company must be registered
with the GIPC. The foreign equity capital Expatriates making use of the IQ may
investment bands for the granting of be replaced with another expatriate
AEQs are as follows: once they leave the employment of the
applying company. It is issued for a
maximum period of three years.
Paid-up capital No. of
(US$) expatriate(s) Obtaining work permits from the GIS
Companies that do not use the quota
Not less than 50 000 1
may apply to the GIS for a work
and not more than permit. The GIS usually issues work
250 000 permits for a period of one year.
Not less than 250 2 However, it is possible to obtain a
000 and not more work permit for a period of two years
than 500 000 as well.
Not less than 500 3 Entities operating in the mining sector
000 and not more are required to obtain letter(s) of
than 700 000 recommendation from the MC prior to
making application to the GIS for work
More than 700 000 4 permits.
In the case of upstream petroleum
operators and free zone entities,
companies need to apply through the
PC and GFZB respectively.
18 Doing Business and Investing in GhanaBelow are the documents required for a • Quota letter from the GIPC or MOI
work permit application to the GIS: or work permit letter from the GIS
(whichever is applicable).
• A work permit cover letter; Other permits/visas
• Completed work permit application
Visa/Entry permit
form;
Every visitor to Ghana requires a visa/
• A letter of recommendation from the
entry permit except for ECOWAS citizens,
MC in respect of a named applicant
citizens of Trinidad, Tobago, Egypt or
(this is applicable to mining entities);
Zimbabwe, holders of a German, Iranian
• Biodata page of the applicant’s or Cuban diplomatic/service passport
passport; (for a period not exceeding three (3)
months), persons in direct airside
• Two passport-sized photographs of the
transit, holders of passports of Regional
applicant;
Economic Communities in Africa and the
• Curriculum vitae of the applicant; African Economic Community as well
as the United Nations and its specialised
• Contract of employment of the
agencies, the World Bank and the African
applicant;
Development Bank.
• Medical report;
• Police report; Visitors from countries which do not
have Ghana missions may obtain visas
• Registration documents of the on arrival upon prior application to the
company employing the expatriate; Controller of Immigration. The visa is
• Educational certificates of the granted in a letter form, a copy of which
applicant; must be forwarded to the visitor to
enable them to travel from their country.
• GIPC registration certificate;
Upon arrival in Ghana, this visa is then
• Financial statements of the company; endorsed in the visitor’s passport.
and
• Tax clearance certificate of the
company.
Residence permit
The GIS is the body responsible for
the granting of residence permits.
In addition to the work permit
documentation, the applicant will be
required to attach the following to their
residence permit application:
• Residence permit cover letter;
• Completed residence permit
application form;
• Passport of the applicant;
• Non-citizen ID card;
• Two passport-sized photographs;
• Certificate of marriage (for spouse);
• Birth certificates of children (where so
required); and
PwC 1920 Doing Business and Investing in Ghana
Economic sectors
Financial services (banks and platform and others, the sector is
other financial institutions) undoubtedly now in a better shape to
play the role of roping in the unbanked
Ghana has a sizeable banking and
population of Ghana, which still remains
financial services industry. Overall,
substantial.
regulation and supervision of this
industry are by the central bank (BoG).
The operating institutions include both
The banking and finance industry
foreign and local major banks, rural and
in Ghana has continue to perform
community banks, savings and loans
creditably. The year-on-year growth rate
companies, and other finance and leasing
of the finance and insurance sector in
companies.
2017 quarter 3 was 4.1%.
The number of banks and non-bank
Sector overview financial institutions as at August 2017
In Ghana, the financial services industry shows that the financial sector is largely
is categorised into three main sectors: dominated by banks, to the following
extent:
• Banking and finance (including
non-bank financial services and forex Organisation Number
bureaus); Universal banks 35
• Insurance; and Rural and 141
• Financial/Capital markets. community
banks
During the third quarter of 2017,
financial and insurance activities Non-bank 71
increased to 4.1% at constant prices financial
as compared to 3.6% in 2016.The institutions
total banking-assets-to-GDP ratio as at Microfinance 347
September 2017 was 50%.
institutions
Total credit to the private and public Forex bureaux 413
sectors recorded an annual growth Insurance 49
of 16.8% as at the end of September companies (Life
2017. Outstanding credit to the private and non-life)
sector at the end of September 2017
was GH¢33.5 billion. In real terms, Reinsurance 3
private sector credit expanded by 4.2% companies
compared to a 3.6% contraction in Insurance brokers 69
September 2016.
Loss adjusters 1
In November 2017, the BoG, through the Reinsurance 1
Monetary Policy Committee, reduced the brokers
monetary policy rate (MPR) to 20%. The
MPR was 17% as at 21 May 2018. The Banks and Specialised Deposit
Taking Institutions Act, 2016 (Act 930)
Following substantial improvements repealed the following acts:
to the financial system, including the
introduction of mobile money services,
• Banking Act, 2004 (Act 673); and
mobile banking, the e-zwich payment
• Banking (Amendment) Act, 2007 (Act
738).
PwC 21Although the Banking Act, 2004 (Act through the institution of infrastructure
673) and Banking (Amendment) Act arrangements and processes in the
2007 (Act 738) have been repealed, all country to strengthen payment and
of their regulations, orders, directives, settlement systems. These include the
decisions and rules are still in force until Ghana Automated Clearing House,
revoked, amended or terminated by Act Direct Credits and Debits System, Ghana
930. Interbank Settlement System, Mobile
Money Services and National Switch
Minimum capital requirements (e-zwich) system.
Even though the banking and financial The mobile money payment service
sectors are liquid and well capitalised, has become one of the most used
authorities have continued efforts to payment services in the country.
strengthen them. Effective September As at September 2017, the total
2017, the minimum paid-up capital number of registered mobile money
requirements for new banks entering customers was 22,010,756, showing
the banking industry were revised by the a 16.69% per cent growth over the
BoG as follows: position in the same period in 2016 of
18,862 941. The total value of
• Commercial banks – GH¢400 million: mobile money transactions stood at
GH¢109,133.60 million as at September
• Non-bank financial institutions –
2017 as against GH¢51,430.32 million
GH¢15 million;
for the same period in 2016.
• Rural banks – GH¢1 million; and
• Microfinance (deposit taking and non- Foreign currency dealings
deposit taking) – GH¢2 million. The Foreign Exchange Act, 2006 (Act
Mergers and acquisitions 723) requires all domestic sales and
purchases of goods and services in Ghana
In 2017, two indigenous Ghanaian to be conducted in Ghana cedis (GH¢).
banks, UT Bank and Capital Bank, were
acquired by Ghana Commercial Bank In August 2014, following a further
(GCB) as a result of the revocation of depreciation of the cedi, the BoG issued
their licenses by the BoG due to high directives to revise forex rules introduced
non-performing loans. in February 2014. The key revisions
included:
Banking and payment systems
Oversight of payment and settlement • The limit of US$10,000 on over-
systems has been identified as an the-counter foreign exchange cash
important component of the central withdrawals has been removed.
bank’s mandate for maintaining the • Exporters are now to continue to
stability of the financial system and repatriate in full all export proceeds
confidence in the domestic currency. in accordance with the terms agreed
As the volume and values of financial between the trading parties. Such
transactions increase, the central bank proceeds must be credited to their
is compelled to ensure that payment and FEAs and converted on a needs basis.
settlement systems operate efficiently
in the country. This has been achieved • Cheques and cheque books may be
issued by banks to holders of FCAs and
FEAs.
22 Doing Business and Investing in Ghana• Persons engaged in the business • Reduced income tax rate (i.e. 20%
of foreign exchange are required instead of the standard 25%) on
to obtain licences from the BoG. income derived from loans granted to
The business of dealing in foreign farming enterprises;
currency includes the purchase and
• Reduced income tax rate (i.e. 20%
sale of foreign currency; the receipt
instead of the standard 25%) on
or payment of foreign currency;
income derived from loans granted to
the importation and exportation of
leasing companies for the acquisition
foreign currency; and the lending and
of assets to lease; and
borrowing of foreign currency.
• In the case of rural banks, a reduced
Furthermore, the GIPC Act also
income tax rate (i.e. 1% instead of the
allows enterprises to effect, through
standard 25%) for the first ten years of
any authorised dealer bank, the
the business’ establishment.
unconditional transfer, in freely
convertible currency, of dividends or net Mining services
profits attributable to the investment
made in the enterprise; payments in Sector overview
respect of loan servicing, where a foreign The mining industry in Ghana has over
loan has been obtained; fees and charges the years grown to be a major driver
in respect of a technology transfer of economic growth. The industry
agreement registered under the GIPC accounts for 5% of the country’s GDP,
Act; and the remittance of proceeds, net and minerals make up about 37% of total
of all taxes and other obligations, in the exports. Ghana’s geological space is rich
event of the sale or liquidation of the in different kinds of minerals, including
enterprise or any interest attributable to gold, bauxite, diamond and manganese.
the investment in the enterprise. However, Ghana’s mining and minerals
development industry is focused on
Investment opportunities gold. Gold contributes over 90% of
the total mineral exports. Ghana is the
There is a high demand for various second-largest gold producer in Africa.
financial services in Ghana. The Currently, there are about 23 large-scale
relatively underdeveloped financial mining companies in the gold mining
services sector in neighbouring countries industry, including AngloGold Ashanti,
is an opportunity for financial services Newmont Ghana, Gold Fields Ghana,
firms in Ghana to supply such services in Chirano Goldmines and Golden Star
those countries. Resources Limited, which continue to
invest in the Ghanaian mining industry.
Discovery of oil There are also over 300 registered small-
scale mining groups and 90 mining
Following Ghana’s oil discovery in
support services companies.
commercial quantities and on-going
exploration activities, enormous
opportunities exist for the banking and Companies exploring for gold in Ghana
financial sector to finance and insure the include Adamus Resources Limited,
numerous large-scale transactions taking Perseus Mining Limited, Azumah
place. Resources and Xtra Gold Resources.
Investment incentives Recent developments
Incentives specific to the financial In 2017, the Government of Ghana
services industry may apply subject to the imposed an initial six-month ban on
following provisions: small-scale mining as part of its effort
to end illegal mining (“galamsey”)
and related activities, which adversely
affected the environment, particularly
water bodies and forest reserves.
PwC 23Galamsey or artisan mining involves Government has the right to acquire a
rudimentary techniques of mineral 10% free carried interest in the rights
extraction, highly manual processes, and obligations of mineral operations,
hazardous working conditions and low in respect of which no financial
levels of environmental and health contribution will be paid by Government.
awareness. Traditionally, small-scale gold This free carried interest does not
mining in Ghana has been carried out preclude Government from any other
by locals on their own land using hand- or further participation in a mineral
operated tools. These methods have operation that may be agreed with the
slowly been modernised and expanded, holder of the mineral right.
but the recent influx of foreign miners
has accelerated this development. This Key regulatory institutions in the
is despite the fact that Ghanaian law
mining industry include:
prohibits small-scale mining by non-
citizens. The ban on small-scale mining Minerals Commission:
was expected to be lifted at some point in
The MC is the main promotional and
the future.
regulatory body for the minerals sector
in Ghana. The Commission’s primary
Regulatory framework responsibility is to foster the efficient and
Every mineral in its natural state in, effective regulation and management
under or upon land in Ghana, rivers, of the utilisation of Ghana’s mineral
streams, water-courses throughout the resources. It is also responsible for the
country, the exclusive economic zone coordination and implementation of
and an area covered by the territorial policies relating to mining and ensures
sea or continental shelf is the property compliance with Ghana’s mining and
of the Republic of Ghana and is vested mineral laws and regulations through
in the President in trust for the people of effective monitoring.
Ghana. The Government of Ghana has
the right of pre-emption of all minerals Forestry Commission:
in Ghana, which is exercised through the
The Forestry Commission of Ghana
Minister for mining and minerals.
is responsible for the regulation of
the utilisation of forest and wildlife
Mining is regulated by the MC which
resources, the conservation and
operates under the Ministry of Lands
management of those resources and the
and Natural Resources. The industry is
coordination of policies related to them.
governed by the Minerals and Mining Act
The holder of a mineral right is required
2006 (Act 703) (Minerals and Mining
to obtain a permit from the Forestry
Act) and associated regulations. The
Commission prior to undertaking any
Minerals and Mining Act gives extensive
mineral operations.
powers to the Minister to classify or
declassify land for exploration and to
negotiate, grant, revoke, suspend or Water Resources Commission:
renew mineral rights. The Water Resources Commission was
established by the Water Resources
The Minerals and Mining Act applies Commission Act 1996 (Act 522) with
equitably to all investors, whether the mandate to regulate and manage
Ghanaian or foreign, except in the case of Ghana’s water resources and co-ordinate
small-scale mining and restricted mineral government policies in relation to
operations, which are reserved solely them. The Act stipulates that ownership
for Ghanaians. In the case of industrial and control of all water resources are
mineral operations, foreigners can vested in the President on behalf of the
participate if their proposed investment people, and clearly defines the Water
is at least US$10 million. Resources Commission as the overall
body responsible for water resources
24 Doing Business and Investing in Ghanamanagement in Ghana. The holder of • Prospecting licence: This licence is
a mineral right may for the purpose of, usually granted for an initial period
or ancillary to, mineral operations need of three years. It gives the holder the
an approval from the Water Resources right to search for specific minerals
Commission for access to the water by conducting a survey to determine
bodies. the extent and economic value of any
mineral deposit within the licenced
Environmental Protection Agency area.
(EPA): • Mining lease: After a prospecting
company has found an economically
The EPA is a statutory agency established
viable deposit, it may apply for a
to deal with environmental protection,
mining lease. This grants the holder
pesticides control and regulation of
the right to mine, win or extract
environmental issues and its related
specified minerals (or commodities)
purposes. The agency is dedicated to
within the lease area. The lease
improving, conserving and promoting
may be granted to the holder of a
the country’s environment and striving
prospecting licence or any person
for environmentally sustainable
who establishes to the satisfaction of
development. Holders of mineral rights
the Minister that a mineral to which
will need an environmental permit from
the lease relates exists in commercial
the EPA.
quantities within the proposed lease
area and can be mined at a profit.
Registration requirements
• Small-scale-mining right: A license
Investors who wish to invest in the for a small-scale mining operation is
mining sector of Ghana are required to granted only to Ghanaians who are
do the following: at least 18 years old. This licence is
normally granted for a period not
1. Incorporate a company in Ghana more than five years from the date of
– the company may be wholly issue and may be renewed on expiry
foreign-owned except that, by law, a for a further period that the Minister
mandatory non-contributory equity may determine. The size of the area
shareholding of 10% is reserved for in respect of which a licence may be
the Government of Ghana. granted for small-scale mining may
not exceed 25 acres (10 hectares).
2. Apply for and obtain a licence or
approval from the Ministry of Lands 3. Register with the MC.
and Natural Resources. In summary,
the following licences are available Mining tax/fiscal regime in Ghana
to mining operators in Ghana: Applicable taxes and levies as required
• Reconnaissance licence: The from operators in the mining sector
reconnaissance licence confers on include:
the holder the right to search for a
specific mineral within the licenced • An annual ground rent is prescribed
area by geochemical and photo- by the MC and paid to the owner of
geological surveys or other remote the land or their successors. Where the
sensing techniques. The licence does rent is in respect of mineral rights over
not permit excavation or drilling. The stool lands, it should be paid to the
reconnaissance licence is normally the Office of the Administrator of Stool
first licence a company applies for. It is Lands.
usually granted for up to one year and
may be renewed only on application
to the Ministry of Lands and Natural
Resources.
PwC 25• An annual minerals right fee is • The Government of Ghana has
payable to the Minerals Commission stability agreements with some
as prescribed. mining companies that seek to protect
the holder of a mineral right, for a
• The corporate income tax rate for
specified period, from any adverse
businesses engaged in mining is 35%,
effects of changes in laws.
and mining service providers are
subject to corporate income tax at a • Subject to any fiscal stability
rate of 25%. This rate may be subject agreement, the mineral royalty rate
to a stability agreement between is 5% of the total revenue earned
the mining contractor and the from minerals obtained from mining
Government of Ghana. operations by a holder of a mining
lease, restricted mining lease or small-
• A capital allowance is granted on
scale mining licence. Royalties must
capital expenditure incurred by a
be paid 30 days after the end of the
person engaged in mining operations
quarter.
at a rate of 20% on a straight-line basis
on mining assets. These assets should • Mining companies can carry forward
be placed in a separate pool from tax losses for a maximum of five years.
other assets. However, a person who However, companies providing mining
incurs revenue or capital expenditure support services are allowed to carry
in the course of reconnaissance or forward tax losses for a maximum of
prospecting operations must place the three years.
expenditure in a single pool and will
not be granted a deduction or capital Challenges in the mining sector
allowance until production starts. The industry has in the recent past faced
• Ring-fencing rules apply to mining major challenges regarding the ever-
companies in Ghana and as a result increasing illegal mining operations,
the chargeable income of mining or galamsey, on company concessions,
companies is determined separately which impact the operations of the
for each mineral operation. affected mining companies. The ban on
small-scale mining might help bring this
• The holder of a mineral right is under control.
granted exemption from import
duty on plant and machinery and Other issues faced by mining companies
accessories specifically and exclusively include land compensation issues and
used for mining operations and listed community demands for the provision
on a mining list. of facilities such as housing, schools and
• Most mining companies usually export hospitals for people displaced by mining
the minerals won and these exported activities, as well as, in some cases, the
minerals are subject to a zero rate of offering of employment to the local
VAT and NHIL. Effective 2016, the people.
Government of Ghana abolished the
use of VAT relief purchase orders. In The capital market
lieu of this, refunds are made after
requests have been vetted and certified There are a number of capital markets in
by the GRA. Ghana, including the following:
• Companies providing mining support
• The Ghana Stock Exchange (GSE);
services are required to pay a national
fiscal stabilisation levy of 5% of annual • Real estate investment trusts (REITs)
accounting profit before tax applies. and collective investment schemes
The levy is applicable to the 2013-to- (CIS);
2019 years of assessment.
• The Ghana Interbank Forex Market;
and
26 Doing Business and Investing in Ghana• The Ghana Alternative Market (GAX) • have continuity of company
– a parallel market operated by the management with the requisite level
GSE which focuses on businesses of competence and integrity; and
with potential for growth and
• issue a prospectus in line with the
accommodates companies at various
provisions of the Companies Act and
stages of their development, including
the Exchange rulebook.
start-ups and existing enterprises,
both small and medium. These requirements may vary depending
on the class of listing required, but the
The largest capital market in Ghana is
requirements for admitting companies
the GSE. It was established in 1989 and
registered outside Ghana are quite
became authorised under the Stock
similar to those applicable to locally
Exchange Act of 1971 (Act 384) in 1990.
registered companies.
The GSE provides, facilities and
In addition to companies, MMDAs,
frameworks to the public to purchase and
pooled investment schemes (such as
sell bonds, shares and other securities.
mutual funds) and the government may
It regulates the dealings of its members
also list securities on the GSE.
(listed companies and brokerage firms)
with their clients and other members
The minimum public float should not be
as well as facilitates the exchange
less than 25% of the number of shares
of information, including prices of
issued by the company. Trading, clearing
securities listed.
and settlement are done electronically on
the GSE.
It also provides an avenue for one to
access a company’s financial statements
Listed companies, brokerage firms, asset
in order for an investor to make an
management firms, investment advisory
informed investment decision.
firms and collective investment schemes
are regulated by Ghana’s Securities
The GSE commenced trading on 12
and Exchange Commission (SEC). The
November 1990 and had a total market
SEC’s role is to ensure good corporate
capitalisation of GH¢58.8 billion
governance and regulatory compliance.
(equivalent to US$13.1 billion) as at 17
November 2017. The 21 brokerage firms
licensed by the exchange are able to The SEC carries out regular inspections
trade in the shares of 42 equities and over of licensed dealing members’ operations
100 bonds listed on the GSE. and books.
A company seeking listing must, among An investor can visit the GSE website at
other requirements: www.gse.com.gh for more information
on the activities of the exchange.
• be a public limited liability company
duly incorporated under the REITs and CISs
Companies Act, 1963 (Act 179) REITs in Ghana began with the CISs.
(Companies Act);
CISs and REITs in Ghana take the form of
• have all shares for listing fully paid for
either a mutual fund or a unit trust.
and qualifying as freely transferable
securities;
The CISs and REITs in Ghana are
• have published or filed audited regulated by the SEC, as all securities in
accounts for a period of time as Ghana are subject to securities laws that
specified for the class of official list it is are administered and enforced by the
seeking for; SEC.
PwC 27The GSE regulates the CISs and REITs Ghana has a free-floating exchange rate
through its registration and prospectus that is determined by the market forces
requirements, regulations on fund of demand and supply. However, the
operations and sales conducts, and BoG has the mandate to issue directives
surveillance and monitoring. and policy guidelines aimed at ensuring
discipline in the forex market.
There are currently about 47 licensed
CSIs and REITs in Ghana, each licensed The major currencies traded on the
either as a mutual fund or a unit trust. forex market include the United States
Dollar, British Pound, Euro, Swiss Franc,
HFC REIT, started by the former Home Canadian Dollar and Australian Dollar.
Finance Company (HFC), is currently the
only dominant REIT in Ghana licensed by
Real estate sector
the SEC.
As at May 2017, available housing
The HFC REIT’s main objective is data from the Ministry of Works and
to provide investors with capital Housing showed a housing deficit
appreciation in a long-term diversified of 1.7 million units, and this was
portfolio. The professionally managed projected to increase to two million
fund’s primary focus is to invest by 2018. Since independence, the
mobilised funds into securities of domain of the provision of houses in
real estate companies or real estate Ghana has predominantly been left to
developments or to invest equity in state apparatus and semi-state-owned
companies that engage in real estate organisations. The real estate market in
investment activities. Ghana is increasingly dynamic as a result
of the country’s increasing population,
In the 2018 Budget Statement by the growing economy and favourable
Government of Ghana, Government investment environment.
clearly indicated its intention to
deepen the domestic capital market by The real estate sector has seen steady
encouraging investments in CISs and expansion since 1990, although it has
REITs. experienced occasional impediments
and delays during times of economic
Currently, approved unit trusts are instability. In 2012, the government
taxed at a concessionary rate of 1% on confirmed an agreement with the Ghana
their income for the first ten years, and Real Estate Developers Association
thereafter at 25%. Distributions from (GREDA) reaffirming a commitment to
resident trusts to beneficiaries are also encourage the growth of private real
exempt from income tax under the estate, partly through public-private
Income Tax Act (ITA). collaboration, particularly aimed at
meeting the needs of the lower end of the
Government is however proposing to market. There is a general concentration
exempt CISs and REITs from income tax towards the middle and top ends of the
in order to deepen the capital market market, which has resulted in a shortage
and address the housing deficit that the of affordable housing in the country.
country is currently facing.
Investment opportunities are therefore
to be found in the construction of
Ghana interbank forex market
residential homes, industrial and
The Ghana interbank forex market also commercial houses and shopping centres.
provides an avenue for banking and
other financial institutions to trade in There are no restrictions on foreigners
foreign currencies. buying property in Ghana. However,
there are four forms of land ownership
and some land cannot be privately
owned, typically government land.
28 Doing Business and Investing in GhanaYou can also read
