Cost of Doing Business in Ghana

A. Business Registration

(a) Registrar General’s Department (RGD)
The Registrar General’s Department is the organization that registers all companies (societies and institutions) in Ghana. The Law regulating the formation of companies is the Companies Code, 1963 (Act 179). A Limited Liability company is the most common structure utilized by businesses, particularly foreign investors and others who want to limit their liabilities.

Limited Liability companies are expected to fill out the relevant Application Forms, which serve as the Company ’s Regulations. All companies must have an auditor, who must be a member of the Institute of Chartered Accountants, but should not be an officer or servant of the company or be an employee or partner of such persons. When all such forms have been filled satisfactorily and relevant fees paid, a Certificate of Incorporation and a Certificate to Commence Business are issued. Below are the basic costs and fees applicable at the RGD office:

	US$	GH¢
Application Forms	7.14	10.00
Stamp Duty is 0.5% of stated /paid-up capital
Filing  Fees	7.14	10.00
Incorporation Fees	40.00	56.00
Auditor's Fees Varies

1. Centre (GIPC)
   The GIPC is responsible for registering all (foreign) investment, which qualify under the GIPC Act 1994. This Act does not apply to either mining or petroleum enterprises.
   
   Application Procedure: Investors are required to complete Investor Registration Forms (Form GIPC/R1) in triplicate. Within five (5) days from the date of orderly receipt of these forms (and its attachments) the GIPC will formally register the investment. Below are the relevant fees and costs applicable at GIPC:

(c)   Ghana Free Zones Board (GFZB)
The GFZB is responsible for the promotion of the processing and manufacturing of commodities through the establishment of export processing zones. It also encourages the development of commercial and service activities within the ports of Ghana. These activities are regulated by the Free Zone Act, 1995 (Act 504).

Application Procedure: As a basic requirement for commencing business with GFZB, investors are expected to incorporate a company/partnership in Ghana and provide evidence of possession or lease of property or intent to acquire such property.

Depending on the activity to be undertaken in the zone, the applicant should obtain and complete GFZB Form 3, 4 or 5; and submit it with the required attachments to the Secretariat of the Board. The GFZB shall notify the investor of his/her Application for License within 28 working days.

(i) Application Forms (US$100.00)

(ii)    Licensing Fees:

Business	Initial	Renewal/Year
Manufacturing	US$2,000.00	US$1,600.00
Commercial	US$5,000.00	US$4,000.00
Service	US$3,000.00	US$2,000.00
Development	US$4,000.00	US$3,000.00

B. Labour Issues/Employment

The Labour Act 651 of 2003 regulates employment and labour issues in Ghana. This Act consolidates all laws relating to labour, employers, trade unions and industrial relations. The result of a collaborative effort among the social partners – Government, Employers and Organized Labour – the Act provides for the protection of employment, general conditions of employment, unfair labour practices, trade unions and employers organizations, occupational health, safety and environment, and labour inspection.

National Labour Commission
An important feature under the Act is the establishment of seven-member National Labour Commission. The Commission consists of two members each nominated by Government, organized labour, and employers’ organization. The chairperson is nominated by organized labour and employers.

Mission Statement
“To develop and sustain a peaceful and harmonious industrial relations environment through the use of effective dispute resolution practices, promotion of co-operation among the labour market players and mutual respect for their rights and responsibilities.”

Functions
The functions of the Commission are:

a) to facilitate the settlement of industrial disputes;
b) to settle industrial disputes;
c) to investigate labour related complaints, in particular unfair labour practices and take steps as it considers necessary to prevent labour disputes;
d) to maintain a data base of qualified persons to serve as mediators and arbitrators; and
e) to promote effective labour cooperation between labour and management

 

Independence
In the exercise of its adjudicating and dispute settlement function, the Commission is not subject to the control or direction of any persons or authority.

Powers
In settling industrial disputes the Commission has the powers of the High Court in respect of enforcing the attendance of witnesses and examining them on oath, affirmation or otherwise and compelling the production of documents, among others.

Enforcement of Orders
In enforcing its orders, the Commission makes application to the High Court for an order to compel any person who fails or refuses to comply with its direction or order.

Settlement of Industrial Disputes - Mediation
When the Commission is notified by parties to an industrial dispute that they have failed to settle the dispute by negotiation, the Commission requests the parties to settle the dispute by mediation and the settlement agreement is binding on the parties.

Voluntary Arbitration
When mediation fails and the Commission is notified, it refers the dispute to an arbitrator, selected by the parties, and the decision of the arbitrator is binding on the parties.

Compulsory Arbitration
In industrial disputes that affect workers engaged in essential services, which are prohibited from resorting to lockout or strike, the Commission settles the dispute by compulsory arbitration. The award in a compulsory arbitration is final and binding on the parties unless challenged in the Court of Appeal on questions of law.

The Value of Labour
The National Tripartite Committee, comprising the Minister responsible for Labour, representatives of the Government, employer’s organizations and organized labour, determines the national minimum wage. Currently, the daily minimum wage is GH¢3.11 (US$2.22). Another financial obligation of the employer is the payment of a statutory monthly contribution of 12.5% of employee’s basic salary to the Social Security and National Insurance Trust (SSNIT).

 The following are some other fees and charges expected in the case of the employment expatriates resident in Ghana –

(a)    Ghana Immigration Service

The Ghana Immigration Service has been established as the agency of the government of Ghana to advise on and to ensure the effective implementation of all laws and regulations pertaining to immigration and related issues. The Ghana Immigration Service is mandated to regulate and monitor the entry, residence, employment and exit of all foreigners. Movement of Ghanaians in and out of the country is equally monitored.

(i) Resident Permit/Person (ECOWAS)	¢500,000 (GH¢50) (US$35.71)
(ii) Resident Permit/Person – Others	¢2,000,000 (GH¢200) (US$142.86)
(iii) Re-Entry Permits (Single/Multiple)	US$50.00/100.00

(b) Ghana Investment Promotion Centre

(i) Automatic Quota (per person)	US$500 ¢7,000,000 GH¢700
(ii) Additional Quota (per person)	US$2,500 ¢35,000,000 GH¢3,500
(iii) Replacement of Quota (per person)	US$500 ¢7,000,000 GH¢700
(iv) Short term Quota up to 2 years	US$1000 ¢14,000.000 GH¢1400

(c) Ghana Free Zones Board

(i) Resident Permit/Person/Year - US$200.00

C. Taxes

Companies operating in Ghana are liable to pay varied levels of taxes depending on the sector of operation, and the location of the project and whether the company is listed on the Ghana Stock Exchange. Taxable profits are based on profits declared in audited accounts subject to adjustments made for capital allowances. For more information on the tax rates in 2010 visit the Internal Revenue Website:www.irs.gov.gh 

Income tax incentives are provided under the Internal Revenue Act, 2000 (Act 592) and further amended by Internal Revenue (Amendment) (No.2) ACT, 2006 (ACT 710)6. Income Tax rates applicable to resident individuals are:

Breakdown	Chargeable Income GH¢	Rate of Tax
First	240.00	Free
Next	240.00	5%
Next	1,200.00	10%
Next	7,920.00	17.5%
Exceeding	9,600.00	25%

If you take someone on to work for you, (even your wife, husband or child), you may have to deduct tax and Social Security (www.ssnit.com) from their earnings, and pay the employer's share of 12.5% of the Social Security Contributions. 

For more information on the income taxation in Ghana visit Internal Revenue Service website (www.irs.gov.gh)


The income tax rate applicable to non-resident individuals is 20%.

D. Utilities

(a) Electricity
The Electricity Company of Ghana (ECG) is responsible for the distribution of electricity within all but northern Ghana. The Volta River Authority (VRA), through its distribution agency, the Northern Electricity Department (NED), is the sole distributor of electricity in the Brong-Ahafo, Northern, Upper East, Upper West, and parts of Ashanti and Volta Regions of Ghana

Application Procedure: Investors need to apply by letter to the ECG, which must specify the following, among others:

• Where the company will be located;
• A site plan of the area (as obtained from Town & Country Planning);
• Total load required;
• Processes to be used in the production activity; and
• Number of shifts (if applicable

Following receipt of the letter, the ECG makes a visit to the site to determine the nearest source of supply and to assess the cost of the connection. Before installation can be effected, the investor typically pays 100% of the installation costs. The ECG generally has the required equipment in stock and installation typically occurs immediately thereafter.

Installation costs vary depending on a number of factors and are calculated by the ECG. Rates payable for electricity consumption for both industrial and domestic purposes are approved by the Public Utilities Regulatory Commission (PURC).

For further information, contact:

The Managing Director
Electricity Company of Ghana
P. O. Box 521
Accra – Ghana
Tel: +233-302 676747; 676727
Fax: +233-302 666262
Email: ecgho@ghana.com
Website: www.ecgonline.info/ecgweb

(b)Telecommunications

i. Landline TelephoneServices: 
There are two (2) fixed network operators of telephone services in Ghana, namely Vodafone Ghana Limited (formerly Ghana Telecom Limited) and Zain (formerly WESTEL). Vodafone Ghana Ltd is by far the larger of the two operators. Zain currently deploys only 2, 907 lines as against Vodafone’s 140,993 lines.

Application Procedure: 
A site survey will be carried out by Ghana Telecom to enable estimation of materials required. The cost of the services is dependent on the location and materials, among others.

The investor is informed of cost and after the payment the service will be provided, almost immediately thereafter.

For further information, contact:

The Managing Director
Telecom House
Kwame Nkrumah Circle
Private Mail Bag 221
Accra North
Tel: +233-302 200200
Fax: +233-302 221002
Email:info.gh@vodafone.com Website:www.vodafone.com.gh

ii. Mobile Telephone Services: 
Currently, there are six (6) registered cellular phone service providers, namely SCANCOM (MTN), MILLICOM (TIGO), VODAFONE (ONE TOUCH), KASAPA, ZAIN (formerly CELLTEL) and GLOBACOM (GLO). All these service providers are operational but the Glo. Connecting to mobile operators is through dealers and dealer agents, who are found in many cities and towns.

Investors are required to apply to and complete a form requesting telephone services (business/residential) giving his/her particular including site location.

iii. Fixed wireless access: 
Three (3) of the Mobile Telephone Service providers Vodafone, Zain and Scancom (MTN) also provide fixed wireless services

              (C) Water

The Aqua Vitens Rand Limited (AVRL) the operator of Ghana Water Company Limited is responsible for the management (i.e. production and distribution) of pipe-borne water in most urban areas and towns. The Community Water & Sanitation Programme also assists in the management of potable water in communities in smaller towns and villages in the districts.

To be connected to water, an investor must follow the following procedures:

• Investor needs to apply by completing the relevant application forms and paying the relevant fees;
• Through the District Offices of the GWCL, the area will be inspected, a drawing, size and pressure of the nearest pipe be determined;
• The applicant must pay the cost of connection in full before connection is effected.

  For further information, contact:
  The Managing Director
  Ghana Water Company Limited
  Post Office Box M. 194
  Accra – Ghana
  Tel: +233-302 666781-7 / 774011
  Fax: +233-302 663552
  Website:www.avrl-ghana.com 
  (D) Postal and Courier Services

(D) Postal and Courier
The Ghana Post Company Ltd, operating as a public company, runs branches throughout the country and competes with private courier services. 

To access a postal Box:
• Pick a form from the post office you wish to have your mails delivered
• The officer in charge will check on the availability of a box and you pay only when given a box number. Yearly Rentals charges are GH¢15 for private and GH¢40 for commercial (business entities) and the key deposit is GH¢5

The Ghana Post Office also provides Private Mail Bags when the boxes are not available.

There are currently forty (40) courier service providers registered and licensed by the Postal and Courier Services Regulatory Commission (PCSRC) in Ghana involved in the various courier service operations.  Below is a list of seven of these companies.

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