Starting a Business in Ghana

Africa provides a wide range of investment opportunities for business people. One of the best destinations in Africa to start a business is in Ghana.  Ghana offers very good business opportunities and a conducive social and economic environment for investors around the world.  Starting a business in Ghana is a simple and straightforward process if you have all the necessary requirements and comply with the required procedure.

In this article, we discuss the following;

STARTING A BUSINESS IN GHANA. 1

2.0 Why do business in Ghana?. 1

2.1 The factors that make Ghana a good destination to do business include the following: 1

3.0 What Business opportunities exist in Ghana?. 1

3.1 The need for Market research. 2

3.2 What are some of the Low-Cost Businesses you can Start in Ghana?. 2

4.0 Registering your business at the Registrar Generals Department (RGD) 3

4.1 What kind of business can I register in Ghana?. 3

The first step in starting a business in Ghana is to legally register the business entity at the Registrar General’s Department (RGD). There are various forms of business entities that businesspeople can be register under the laws of Ghana, and it is therefore imperative to choose the right legal structure that best serves your business intentions. These are the various forms of business registration under the laws of Ghana. 3

4.2 Sole proprietorship. 3

4.3 Company Limited by Shares. 3

4.4 Companies Limited by guarantee. 3

4.5 Companies with unlimited liability. 4

4.5 External Company. 4

5.0 General Procedure for Registering a Business in Ghana. 4

5.1 – Business Name Search. 4

5.2- TIN Registration. 4

5.3 – Download and Complete Business registration forms from the RGD. 5

5.4 Pay stamp duty, business incorporation and filing fees and all applicable charges. 5

5.5 –   Collect Business registration certificates. 6

6.0 Opening a Bank Account 6

8.0 Other Regulatory Compliances and Sector Licensing. 7

9.0 Ghana Revenue Authority. 7

10.0 Social Security and National Insurance Trust 7

10.1 Requirements to register with SSNIT include the following. 7

10.2 The social security scheme applies to- 7

11.0 Hiring of Local Employees 7

12.0 Immigration- Work and residence permit 8

13.0 Mistakes to avoid when doing business in Ghana. 8

14.0 Challenges with doing a business in Ghana. 9

15.0 Fast Facts about Ghana. 9

16.0 Conclusion. 9

2.0 Why do business in Ghana?

Ghana is one of the most attractive locations for doing business in Africa. It has a population of about 29.6 million (2018). Ghana ranks in the top three countries in Africa for freedom of speech and press freedom, with strong broadcast media, with radio being the medium with the greatest reach. Ghana’s stable multi-party system is also dedicated to market liberalisation. Factors such as these provide Ghana with solid social capital.

2.1 The factors that make Ghana a good destination to do business include the following:

• Easy access to all markets of the Economic Community of West African States (ECOWAS)
• The foreign investment law (Ghana Investment Promotion Centre) guarantees 100% of ownership of businesses and safety of foreign investors.
• Competitive labour force and availability of skilled & trainable labour
• Safety of individuals; both expatriates and Ghanaian
• Quota-Free access to USA & European Union markets
• Export-free zones where goods traded with other countries are exempted from custom duties and some laws.
• Proximity of EU Markets – 6-hour flight
• Warm and friendly people

3.0 What Business opportunities exist in Ghana?

Ghana offers a mix of rewarding business opportunities and growth in business sectors. Identifying a niche to target is always an effective way to start.

Business opportunities exist in the sectors below.

• Agriculture– farming for export, cashew, tree cropping, vegetables, poultry, and fish farming
• Construction and Infrastructure
• Oil and Gas
• Gold export
• Cosmetics Industry
• Food and commodities import.
• Domestic Airline in the aviation industry
• Automobile industry – Used and New Cars, Auto accessories and Spare Parts, motorbikes, and tricycles
• Manufacturing

3.1 The need for Market research

In deciding on the business, you want to do, it is important to do undertake market research. Market research will help you understand the markets and obtain primary and secondary information for decision making. Information on consumer preference, competitors, pricing, regulatory issues, taxes, imports, and location are all important research information that will be helpful for your investment decision making.

Market research brings to light such information for the benefit of the business. It also helps the potential business investor know the strengths and weaknesses of their potential competitors in the area that they want to operate in.

3.2 What are some of the Low-Cost Businesses you can Start in Ghana?

It may be very costly to start business in Ghana depending on the activities that you look at undertaking. However, there are a couple of businesses that may not require very high capital to start. Some of these businesses may include but not limited to the following:

• Event Planning
• Animal and fish farming
• Food Services
• Livestock feed production
• Creche Day Care services
• Photography and Videography Services
• Real Estate Agency
• Home Tutoring Services Etc.

4.0 Registering your business at the Registrar Generals Department (RGD)

4.1 What kind of business can I register in Ghana?

The first step in starting a business in Ghana is to legally register the business entity at the Registrar General’s Department (RGD). There are various forms of business entities that businesspeople can register under the laws of Ghana, and it is therefore imperative to choose the right legal structure that best serves your business intentions. These are the various forms of business registration under the laws of Ghana.

• Sole Proprietorship
• Companies Limited by shares
• Unlimited liability company
• Companies Limited by guarantee
• External company

In choosing which form of business is most suitable, you need to consider the following factors.

1. What is the nature of business?
2. What is the nationality of the ownership of the business and the number of owners involved?

The nature of the business object and the number of parties involved will help determine which form of business you should select. Each form of business comes with its own requirements, pros, and cons.

4.2 Sole proprietorship

This option is only for Ghanaians. A sole proprietorship is a business that an individual owns and controls. To register a sole proprietorship with the RGD, the individual needs to complete form A with his or her personal details including his/her Ghana Card and details of the proposed address for the business.

Registration takes an average of five working days. Once the registration is complete, the individual is issued with a certificate of business registration and Form A.

Click here to read on the procedure for registering a sole proprietorship business in Ghana; Registering a Sole Proprietorship Business

4.3 Company Limited by Shares

Limited by shares companies will need a minimum of two directors, a minimum of one shareholder and a secretary.

Click here to read on the procedure for registering a company limited by shares in Ghana; How to register a limited by shares company in Ghana

4.4 Companies Limited by guarantee

Not-for-Profit or Non-Governmental Organization (NGO) also known as company limited by guarantee. A private company limited by guarantee is a form of business structure often used by non-profit organizations, clubs, co-operatives, social enterprises, community projects, membership organizations and charities to serve social, charitable, community-based, or other non-commercial causes.

Click here to read on the procedure for registering a company limited by guarantee in Ghana; How to register a limited by guarantee (NGO) in Ghana

4.5 Companies with unlimited liability

An unlimited liability company is one in which the liability of the shareholders for the debts of the company is unlimited. There is no separation between personal and company resources of the shareholders in situations where the company must pay debts.

In Ghana, a category of workers RGD obligates to register a private company unlimited by shares. They include lawyers, architects, and auditors. The law allows foreigners to own an unlimited liability company.

Click here to read on the procedure for registering a company unlimited by shares in Ghana; How to register a company unlimited by shares in Ghana

4.5 External Company

External Companies are companies incorporated outside of Ghana with a registered place of business in Ghana. The laws of the home country where external companies are incorporated regulate external Companies.

Click here to read on the procedure for registering a company limited by guarantee in Ghana; How to register an external company in Ghana

5.0 General Procedure for Registering a Business in Ghana

5.1 – Business Name Search

Conduct your business name search in Ghana to ensure the availability of the proposed business name for the business. Business promoters may after the name search apply to have their business name reserved for a period of 30 days.

5.2- TIN Registration

Ghana Revenue Authority requires all company directors, secretary and subscribers, proprietors, local manager, (depending on the type of entity you are forming) to register and obtain a TIN for the purposes of business registration. Complete TIN forms and attach a copy of photo ID (Drivers, passport biodata page, voters ID). GRA will create a TIN number within 24 to 48 hours at no charge at any Ghana Revenue Authority office.

For Ghanaians, Individuals would have to present a copy of their Ghana Cards to proceed with the registration.

Ghana Revenue Authority can create TIN numbers for corporate organizations. This situation becomes necessary when the corporate entities hold shares of the company registered at RGD. In such a scenario, the corporate organization will obtain a TIN Form for Organizations and dully complete same and attach a letter of introduction. GRA will subsequently create a TIN number for the corporate shareholder.

5.3 – Download and Complete Business registration forms from the RGD.

General Information that the RGD requires to fill forms when registering a business in Ghana.

• Company Name
• Nature of Business (Give a brief description of the company’s business activities
• Registered Office
• Digital Address
• House Number/Building or flat Name
• Street Name
• City
• District
• Region
• Principal Place of Business
• Digital Address
• House Number/Building or flat Name
• Street Name
• City
• District
• Region
• Other places of business if any
• Personal details of directors, secretary, and shareholders (nationality, date of birth, occupation, contact, email, and residential address)
• Tax Identification Number of directors, secretary, and shareholders
• Valid Certificate of qualification for the company secretary
• Authorized Shares
• Stated Capital
• Shareholding Structure
• Auditor’s details
• Passport Biodata page/ Ghana Card

Need more information on the Registrar General’s Department (RGD)? Learn more from our newly created Compliance Passport for more information to get your business started.

5.4 Pay stamp duty, business incorporation and filing fees and all applicable charges.

Depending on the type of entity you are registering, there are applicable fees to be paid to the Registrar of Companies. All the fees to be paid have been discussed above under the sections where we talk about each form of business.

5.5 –   Collect Business registration certificates.

Upon submission of forms, one should expect to have the process completed in 2 weeks, after which certificates of registration will be issued according to the type of entity you registered.

These are the legal documents of proof of company’s existence in Ghana. The documents will clearly indicate the business name, activities, business address, directors’ details, business TIN information, among others. The business entity can use the business certificates and documents for any business transaction or open a corporate bank account with any of the commercial banks in Ghana.

6.0 Opening a Bank Account

There are a number of Banking Institutions in Ghana that support businesses to grow. To open an account with any of these Banks, the requirements may vary from bank to bank, but these are the things needed to open an account in Ghana:

6.1 Requirements for Opening a Corporate Bank Account in Ghana

To open a corporate bank account in Ghana, the bank will require you to fill a form and submit the appropriate documentation. The bank account should be in the name of the business. The following documents and information require the following:

• Certificate of Incorporation and Certificate of Registration.
• Two passport-size pictures of the Signatories to the account.
• Proof of identification such as passport.
• Proof of residential address for all directors and signatories
• Company physical address confirmation
• Annual returns (for companies registered over one year ago)
• Revenue stamp and constitution of the society if not registered.
• Residence permit (if the account signatories are foreigners)

7.0 Business Operating Permit

All businesses must register under the municipality that they find themselves in. A business operating permit is a license that enables you to do business in the city in which you find yourself.

7.1 Checklist For Processing a Business Operating Permit

• Produce Registrar General Business Certificate/Certificate of Incorporation
• Name of Business
• Name of Business Owner
• Business Location (GPS location)/Address
• Contact Detail.

8.0 Other Regulatory Compliances and Sector Licensing

Businesses may be a need to register with other regulatory agencies. This depends on the activities that they undertake. These agencies may include but are not limited to the following.

• Ghana Investment Promotions Centre
• Gaming Commission
• Food and Drugs Authority
• Social Welfare
• Petroleum Commission Ghana
• Ghana Export Promotions Authority
• Ghana Standards Authority
• Ghana Free Zones Authority
• Bank of Ghana

See here also: How a Fintech can obtain a Payment Service Provider License in Ghana

9.0 Ghana Revenue Authority

Established businesses operating in Ghana have a key obligation to pay taxes.

Find in the article link below all the things you need to know about Tax compliance in Ghana; Important Guidelines for Tax Compliance in Ghana

10.0 Social Security and National Insurance Trust

Every worker is to ensure that his or her employer has registered them under the scheme and issued a membership number. The employees must also ensure to pay contributions of the employees.

The employer is also under strict obligations to register all workers and deduct and pay contributions on their behalf.

10.1 Requirements to register with SSNIT include the following.

• Letter from Employer (recommendation letter)
• valid ID
• Pension Savings Account number
• Birth certificate to prove age.
• National Identification card.
• Details of your home Address
• Address of the employer.

10.2 The social security scheme applies to-

1. Every employer and to each worker employed by its establishment.
2. Any other employer, worker and self-employed to whom the Social Security Act, 1991 (P.N.D.C.L. 247) applied immediately before the commencement of this Act, and
3. Self-employed persons, who opt to join the social security scheme.

11.0 Hiring of Local Employees

Hiring local employees can be beneficial to your business. Ghana has a wide range of skilled and unskilled labour to the advantage of all business owners. The advantages in hiring local employees may include:

• Local Employees have a better understanding of the culture of the people and the local business space and how it works.
• Locals are fluent in the language and can manage workers using local resources.
• It may be much cheaper to hire a local employee rather than an expatriate.
• It adds variety to your team of expertise in terms of culture and perspective to life.
• It is Easier to Build a Network

Once an employer hires local employees, it is important to adhere to the labour laws of the country. Not all employments would require you to give a written contract, however, once the employee will be engaged for six months or more it is important to state this in a written contract. The essential terms that an employee needs to evidence in writing are:

• names of the employer and the employee.
• appointment date.
• job title and grade.
• rate, method, and intervals of pay.
• work hours.
• period and details of holiday pay.
• relating to sickness or injury and the details of sick pay.
• information regarding social security or a pension scheme.
• disciplinary rules applicable.
• dispute resolution procedure; and
• information regarding overtime payment

An employer may hire a third party to engage in the recruitment process. This may include engaging in background checks on the individual that the employer wants to hire. Doing this the right way and avoiding the breach of the labour law if particularly important.

12.0 Immigration- Work and residence permit

A work permit is an approval granted by the Ghana Immigration Service (GIS) for the employment of foreign nationals specifying the number and description of persons authorized to be employed. For all expatriates that need to be employed, work and live in Ghana, it is important to acquire a work and residence permit. This may be a bit cumbersome to obtain but achievable once you follow the right procedure.

Read more on acquiring work and residence permits in the link below.

How to Obtain a Ghana Work and Residence Permit

13.0 Mistakes to avoid when doing business in Ghana.

It is important to avoid mistakes when it comes to doing business in Ghana. This helps to accelerate business growth and prevent loss of money.

Mistakes that businesspeople need to avoid once they decide to do business in Ghana include-

1. Avoid using one company to undertake too many activities.
2. Business entities should not be deposit company equity in individual bank accounts.
3. Avoid non-receipted payments and undocumented non- contractual agreements.
4. Do not rely on people’s influence to get things done. It is important to follow the right procedure.
5. It is important to undertake all the necessary due diligence before dealing with an individual or a company.

14.0 Challenges with doing business in Ghana.

• Credit facilities to fund businesses can be costly and difficult to access.
• Fluctuation of the Ghana Cedi Currency
• High Cost of Electricity and unstable power supply
• Delayed payment from Government and private individuals on awarded contracts.
• Unfair competition in the market

15.0 Fast Facts about Ghana

• Ghana is the first country in Sub- Sahara Africa to gain independence.
• Ghana gained independence in March 1957.
• The Capital city of Ghana is Accra.
• Ghana means ‘warrior King’’.
• Ghana was the centre of the Trans-Atlantic Trade
• Kente Cloth originates from Ghana.
• The largest manufactured lake in the world, Volta Lake is in Ghana
• Ghana is a huge exporter of cocoa, gold, and timber.

16.0 Conclusion

Ghana is a great destination to live and do business in. Ghana offers a wide range of opportunities and freedom to explore aspects of the developmental face that the country is going through. Creating endless business opportunities for individuals and businesses who have the resources and ideas to grow.