Lex Africa Guide 2012 Full - Afrer.org

32GHANABENTSI-ENCHILL, LETSA & ANKOMAHFirm InformationWebsite: www.belonline.orgContact: Kojo Bentsi-EnchillTelephone: +233 21 221 171/224 612/227 187/229 259/229 396Fax: +233 21 226 129Email: bel@belonline.org and belm@africaonline.com.ghPolitical SystemGhana has a constitutional government under a multipartydemocracy.Economic IndicatorsGross domestic product (GDP): US$ 37.481 billion(2010)GDP per capita pp is US$ 2 930 (2010).Inflation RateThe inflation Rate in 2011 was 8.7%.Forms of BusinessUnincorporated businesses / sole proprietorships;Incorporated partnerships;Statutory corporations;Company limited by shares (the liability of shareholders forthe debts of the company is limited to any amounts unpaidon their shares);Company limited by guarantee (the liability of shareholdersfor the debts of the company is limited to amounts thatthey respectively undertake or guarantee to contribute tothe assets of the company in case of liquidation);Unlimited companies (there is no limit on the liability of themembers. The few unlimited companies that exist aremostly law firms and other professional organisations thatmay be prevented from operating as limited liabilitycompanies by professional rules);External company (incorporated bodies formed outsideGhana that seek to operate in Ghana register as externalcompanies if they establish a place of business in Ghana).Companies may be either public or private companies.Investment ClimateThe Constitution protects private property and prohibitscompulsory acquisition except under due process of law.Parliamentary approval of international economic and businesstransactions to which the government is a party is required.Natural resource grants also require parliamentary approval.Under the Ghana Investment PromotionCentre Act (GIPC) non-Ghanaians may investand participate in the operation ofenterprises in Ghana.In the case of a joint venture with a Ghanaian,the non-Ghanaian must invest foreign capital of at leastUS$10 000 or its equivalent in capital goods by way of equityparticipation. The GIPC Act does not prescribe a minimumpercentage of Ghanaian ownership in a joint venture enterprisebut the GIPC in practice requires a minimum of a 5-10%Ghanaian shareholding in a joint venture.Where the enterprise is to be wholly owned by a foreigner, theremust be an investment of foreign capital of at least US$50 000 orits equivalent in capital goods by way of equity capital.In the case of a trading enterprise involved only in purchasingand selling goods owned either wholly or partly by a non-Ghanaian, there must be investment of foreign capital of at leastUS$300 000 by way of equity capital and the enterprise mustadditionally employ at least 10 Ghanaians.The above minimum capital requirements do not apply toportfolio investments or enterprises established exclusively forexport trading.Incentives granted under the GIPC Act include:an immigration quota limited to the amount of the paid upcapital of the company;personal remittances of wages through authorised dealerbanks;free transferability of dividends and profits; andother special incentives that may be negotiated with theGIPC to promote certain identified industries.TourismUnder the Ghana Investment Promotion Centre (Promotion ofTourism) Instrument, enterprises engaged in licensed tourismestablishments e.g. hotels, motels, resorts, guesthouses,holiday apartments, catering establishments, travel and tours,conference and conventions, recreation and entertainment,have been declared special priority areas and qualify for thefollowing benefits and incentives in addition to existingincentives under the GIPC Act:exemption from customs, import duties and Value AddedTax (VAT) on specified capital equipment, machinery,appliances, furniture and fittings in pre-approvedquantities to be used in establishing the project;tax exemption in respect of pre-approved quantities ofknocked-down parts, components and spare parts inrespect of such equipment, machinery, appliances,furniture and fittings;payment of corporate tax has been exempted for specifiedperiods e.g. 10-year tax holiday for 2, 3, 4 and 5 star hotelsor resorts located outside Accra or regional capitals. The2011 budget proposed the repeal of these incentives andtheir replacement with new incentives. This has notoccurred as yet.Import/ExportCompanies that export more than 70% of their products mayenjoy benefits under the Free Zone Act including:exemption from duties on importation of goods or exports;a 10-year tax holiday;post-holiday tax rate of 8%;foreign employees are totally exempt from payment ofincome tax in Ghana on income earned in the free zone,subject to the existence of a double taxation agreementbetween Ghana and the home country of that foreign