For foreigners who seek to trade in Ghana, the law governing foreign trade is the Ghana Investment Promotion Centre Act, 1994, Act 478.
Generally, certain enterprises are reserved for Ghanaians and it is an offence for foreigners to participate in those specified enterprises. Enterprises reserved for Ghanaians include the following; the sale of anything whatsoever in a market, petty trading, hawking or selling from a kiosk at any place; Operation of taxi service and car hire service; All aspects of pool betting business and lotteries, except football pools; Operation of beauty salons and barber shops.
In respect of the operation of taxis however, a foreigner may undertake this service provided he has a minimum fleet of ten new vehicles. Section 19 of Act 478 also makes certain exceptions. It states that where there is a joint enterprise with a Ghanaian partner, the foreigner must contribute foreign capital of not less than US$10,000.00 or its equivalent worth in capital goods by way of equity participation. Also where the enterprise is wholly owned by a non-Ghanaian there is an investment of foreign capital of not less than US$50,000.00 or its equivalent worth in capital goods by way of equity capital.
Additionally, where the enterprise sought to be operated by the foreigner involves only the purchasing and selling of goods which is either wholly or partly owned by a foreigner, the foreigner is to invest foreign capital of at least US$300,000.00 by way of equity capital and the foreigner is to employ at least 10 Ghanaians.
More importantly, there is the need for every foreigner who intends to establish any enterprise falling under Act 478 is required to register the enterprise under the Companies Act, 1963, Act 179.
A foreigner is also required to register his enterprise after registration under the Companies Act 1963, Act 179 with the Centre. Under the law, the Centre is mandated to register the enterprise within five(5) working days after receipt of the completed registration forms where it is satisfied that all relevant documents for registration are in order and that the minimum foreign equity capital requirement has been complied with. The Centre provides such assistance and guidance as maybe required and acts as liaison between the enterprise and relevant government departments, agencies and other public authorities.
It is noteworthy that every foreigner who complies with the registration is entitled to incentives as are applicable to such enterprise under the Income Tax Decree 1975 (SMCD 5) and under Chapters 82, 84, 85 and 98 of the Customs Harmonised Commodity and Tariff Code scheduled to the Customs, Excise and Preventive Service Law, 1993 (PNDCL 330) and any other law for the time being in force. More so any foreigner investing in Ghana is entitled to unconditional transferability of its dividends, profits and trade capital. The law also safeguards against expropriation by the government.
Any dispute arising between a foreign investor and the Government is subject to mutual discussion to reach amicable settlement. In the alternative, the law makes provision for arbitration in accordance with the rules of procedure for arbitration of the United Nations Commission of International Trade Law. Foreign investor should note that in the event where there is a dispute as to the method of settlement to be adopted, that of the investor shall prevail.
AUTHOR: AB Lexmall & Associates
Copyright AB LexMall & Associates