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This article explains the statutory requirements for a joint venture in Ghana involving a foreign partner. Under the laws of Ghana, a foreign investor or company may collaborate with a Ghanaian businessman or company through a joint venture agreement.
The joint venture agreement must be properly executed stating among other things the shareholder structure as well as a detailed rights and obligations of each party to the agreement. Under the Stamp Duty Act, any agreements executed between the parties must be stamped appropriately and the necessary stamp duty paid. 

In a joint venture involving a foreign partner, the Ghana Investment Promotion Centre requires a minimum capital of US$ 10,000 from the foreign investor or foreign company. However, if the objects of business include financial trading, then the Ghana Investment Promotion Requirements for minimum capital is US$ 300,000. 

The foreign shareholder can satisfy the minimum equity capital requirements through two primary ways. It can be through cash transferred through the banking system in Ghana or its equal value in the form of goods, machinery or other tangible assets imported specifically to establish the enterprise. All imported items for the purpose of satisfying the foreign shareholder minimum capital must be covered by a Destination Inspection Report from an accredited inspection company, stating the value and the conditions of the goods. It must be noted that consideration for goodwill of a business or service rendered by the foreign partners cannot be used to satisfy the minimum foreign equity capital. 

Establishing the Business 

In Ghana, every business must be registered with the Registrar of Companies. Usually, the application for registration of a company is made directly, or through agents or solicitors, to the Registrar of Companies. Once the Registrar of Companies is satisfied that all the necessary information has been provided and the appropriate fees paid, a certificate of incorporation will then be issued. The Registrar of Companies will also provide a certificate to commence business together with the incorporation papers to enable the company start its operations legally in Ghana. The required fee paid to the registrar of companies is nominal and is often included in the professional fees paid to a solicitor.

Annual Returns

Under the Companies Code, all Limited Liability Companies in Ghana must file annual returns with the Registrar of Companies showing its audited balance sheet and profit-and-loss statement. 

Tax

All enterprises must register directly with the Domestic Tax Revenue Division of the Ghana Revenue Authority for purposes of statutory tax and also apply for tax rebates and exemptions where qualified.

Under the Tax laws in Ghana, corporate tax is assessed at 25% of the declared profit of the company. Corporate Tax must be paid annually to the Internal Revenue Service. Tax holidays and tax incentives are available to businesses that operate in deprived areas of the economy as well as businesses that are critical to the development of the national economy.

Immigration

With the exception of national from Economic Community of West African States, Kenya, Malaysia and Singapore, all foreign national entering Ghana must obtain an entry visa from a Ghana Embassy or High Commission abroad. An entry visa may however be obtained on arrival in Ghana if the traveler or his sponsor notifies the Director of Immigration ahead of time. The notice to the director should be an application detailing the particulars of the traveler as well as the reason necessitating the issuance of a visa upon arrival.

On Arrival in Ghana, foreign investors are required to register with GIPC stating the nature of their business and proof that the necessary formalities with respect to the appropriate registration procedures have been duly complied with. Once established, the enterprise is required to apply to the Ghana Investment Promotion Center for an immigration quota. With this application, GIPC will determine the number of foreigners the enterprise will be able to engage without giving any justification. Beyond the allowed quota, subject to a criminal background check, the enterprise will be able to engage the services of a foreigner if it is able to prove that no Ghanaian will be able to perform the job that the foreigner has been hired to perform. 

Foreigners intending to accept direct employment in Ghana must apply for a resident permit together with a work permit from the director of immigration. The resident and work permit must be renewed periodically for as long as the foreigner remains employed in Ghana. The application for renewal of these permits must be submitted two months before the expiration date.

ABOUT THE AUTHOR: AB Lexmall & Associates
AB Lexmall & Associates is a full service commercial law firm in Accra, Ghana. AB Lexmall & Associates has a team of dedicated lawyers who will strive to satisfy all your commercial law needs.

Copyright AB LexMall & Associates

Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.For specific technical or legal advice on the information provided and related topics, please contact the author.

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