Incorporating a company means establishing a legal identity for the company that is separate and distinct from its directors or shareholders. This enables the company to contract in its own name; limits the liability of the company’s directors and shareholders and ensures continuity of the company in the event of the death or bankruptcy of a shareholder.

To incorporate a company in Ghana requires the business entity to be registered with the Registrar-General’s Department (RGD). In the past the registration process at the RDG was cumbersome but with the automation of processes, registration is now seamless.

The choice of a business entity is dependent on the business structure and its strategic objectives.  The type of business structure adopted legally affects filing of taxes, personal liability etc. in the event of winding up or liquidation. It is therefore appropriate to understand and choose the right structure that best suits the business and its objectives.

The incorporation process must be routinely guided by the following in order to be in sync with Ghana law:    

·      Registration of the business at the RGD;

·      Registration of the business at the Ghana Investment Promotion Center (GIPC);

·      Registration with Regulatory Authorities and Entities 

1.    REGISTRATION AT THE REGISTRAR – GENERAL’S DEPARTMENT

The Companies Act, 2019 (Act 992) governs the registration of business entities in Ghana. It mandates the Registrar-General to certify under its seal, an Incorporated Company after payment of a prescribed fee. The Registrar-General has directed that from January 2022, the National Identification Authority card (Ghana card) will be the only form of document to be accepted as proof of identity for the registration of businesses in Ghana. Prior to this directive, the directors and the secretary of company were required to submit a Tax Identification Number (TIN) towards registration. 

Act 992 allows for the following categories of business entities to be registered:

·      A company limited by shares – where a company which has the liability of its members limited to the amount unpaid on the shares respectively held by them.

·      A company limited by guarantee is a is a company which has the liability of its members limited to an amount that the members may respectively undertake to contribute to the assets of the company in the event of its being wound up; 

·      Unlimited company – is a company which does not have a limit on the liability of its members;

·      External company – This is a corporate body formed outside the Republic of Ghana that has an established place of business in country.

Act 992 classifies an entity to be foreign owned when it is entirely owed by a non- Ghanaian. The entity has to meet the following requirements:

·      Services industry: minimum required investment is $500,000.00

·      Trading: minimum required investment is $1,000,000.00

·      Manufacturing: no minimum required investment for businesses which sole purpose is for manufacturing or for export.

The requirement demands the involvement of a Ghanaian partner with a minimum of at least 10% stake in the company for it to qualify as foreign local partnership. The entity has to meet the following requirements:

·      Services industry: minimum investment required is $200,000.00.

·      Trading: minimum investment required is $1,000,000.

The business entity to be registered will be required to indicate the following including but not limited to the name of company, the nature of business, appointment of directors of the company in accordance with Act 992, name and address of auditors, appointment of company secretary and registered office and principal place of business 

Upon providing the details above in relation to the strategic objectives of the business entity, the applicant must complete a set of forms to be submitted to the Registrar-General for processing of the application. The applicant is required to pay 0.5% of the stated capital as statutory stamp duty.

2.     REGISTRATION AT GHANA INVESTMENT PROMOTION CENTER (GIPC)

Under the GIPC Act of 2013 (Act 865) (GIPC Act), all companies with foreign participation are required to register with the GIPC. The business entity with foreign participation is required to provide proof of their stated capital either in cash or capital goods or combination of both. Upon satisfactorily meeting the requirement, GIPC will then issue a certificate to the investor. This certificate issued, entitles the company to quotas enabling it to secure working permits for their foreign national staff.

The following are the minimum capital requirements under the GIPC Act: 

a)     A joint venture with Ghanaian participation

In a joint venture with at least 10% Ghanaian participation, the foreign partner is required to contribute not less than US$200,000 (in either cash or capital goods) relevant to the investment.

b)    A wholly owned foreign entity 

An entity wholly owned by a non- Ghanaian requires a minimum amount of foreign equity capital of US$500,000 in either cash or capital goods relevant to the investment.

c)    Trading entity

A trading entity that is either wholly or partly owned by a non-Ghanaian requires a minimum equity capital of US$1,000,000 in either cash or capital goods relevant to the investment. 

3.    REGISTRATION WITH OTHER REGULATORY BODIES 

A business entity registered and incorporated at the RGD and GIPC in accordance with the Act, it is clothed with a legal status to commence business.  In addition to this is a requirement that must be met at other designated bodies in order to ensure regulatory compliance, approvals, permits and licenses. A few of these are discussed below to serve as a guide. 

Social Security and National Insurance Trust (SSNIT)

The National Pensions Act, 2008 Act 766 establishes a contributory pension scheme where every employer is required by law to register with the SSNIT and pay Tier 1 pension contributions in respect of its employees. The employer is required to register with a private pension fund manager for Tier 2 pension contributions on behalf of their employees. 

Ghana Revenue Authority (GRA) 

After the business entity is incorporated, it is mandatory under the Ghana Revenue Authority Act 2009, Act 791 to register with the Ghana Revenue Authority for the purposes of payment statutory tax.

Ghana Free Zones Board (GFZB) 

Companies operating in industries other than mining, petroleum or timber can obtain a license from the GFZB in accordance with The Free Zones Act 1995, (Act 504) to operate as a free zone entity. A free zones company needs to export at least 70% of its annual production and sales to the local market should not 30% of annual output. Sales within the local market are however taxable.

By being part of the free zone, the entity enjoys incentives such as tax holidays for a period of ten years and afterwards a payment of 25% corporate tax on local sales and 15% with respect to exports. 

Minerals Commission 

The Minerals and Mining Act, 2006 (Act 703) requires all mining and mine support service companies to register with the Minerals Commission in order to operate. Companies therefore enjoy certain form of incentives such as grant of an expatriate immigration quota, exemption from import duties and authorisation to invoice and receive and make payments in foreign currency subject to approval from the Bank of Ghana. 

Petroleum Commission (PC) 

Pursuant to Regulation 43(1) of the Petroleum (Local Content and Local Participation) Regulations, 2013 (LI. 2204) these guidelines are issued to guide upstream petroleum industry players on the formation and structuring of joint venture companies. All entities in the upstream oil and gas sector, such as contractors, subcontractors or sub-subcontractors, are to register with the Petroleum Commission and pay the required registration fees. 

Thus, to operate in the upstream oil and gas sector as a foreign investor, one is required to establish a joint venture (JV) with an indigenous Ghanaian company that has at least a 5% or 10% ownership in the JV, in the case of a contractor or subcontractor respectively. 

National Communication Authority (NCA) 

Registration with the NCA will be required for a business importing telecommunications equipment, including servers, cellular phones, fax machines, cordless phones and radio equipment. 

Apply for an Environmental Impact Assessment Certificate 

Depending on the nature of the business it is required that the business entity applies for an Environmental Assessment Registration from any Environmental Protection Agency (EPA) Regional and District Offices.

Business License from the Metropolitan Authority

The business also has to be registered with the municipal or district authority within the area it intends to operate.

Immigration 

Ghana Immigration Services (GIS) is the institution responsible for the issuance of the various types of permits, including work and residence permits, visitor’s permits and emergency entry visas, among others. Work permits can also be obtained from the GIPC in the form of an automatic expatriate quota or from the Ministry of Interior  in the form of an immigrant quota or from the GIS.