Ghana’s foreign direct investments have grown exponentially for many years now. Many entrepreneurs/ business owners (both Ghanaians and foreign nationals) have established businesses in Ghana and are doing massively well.
To start a business in Ghana, it is imperative to understand the process of business registration which is governed by legislation and administrative procedures instituted by various institutions. Missteps during the inceptive period of setting up the business and lack of appreciation of the most appropriate type of business entity to register could cost the business greatly in the future.
A wrong approach could also result in undue delay in the registration process and additional registration expenses.
It is therefore beneficial to understand the future implications of the decisions taken today.
This guide will outline the steps involved in registering a business in Ghana, including choosing the right type of business entity, preparing the necessary documentation and completing the registration process, among others.
Step 1: Choose the Right Type of Business
There are several types of business entities one can register in Ghana. They include Limited Liability Companies (LLCs), Unlimited Liability Companies (ULCs), Companies Limited by Guarantee (Public and Private), Sole Proprietorships and Partnership Firms. You need to choose the type of company that best suits your business needs and goals. The procedures, legal requirements and statutory fees to be paid depend on the type of business entity chosen.
Step 2: Prepare Necessary Documentation
The level of documentation depends on the entity type, but since the most preferred legally regulated business entity type is LLC, we would like to provide brief guidance on what is involved in registering a company limited by shares.
Generally, the following procedures should be considered for the registration of a company limited by shares:
- Obtain registration forms from the Office of the Registrar of Companies (ORC).
- Each officer of the company (directors and secretary) and shareholders is required to have an individual taxpayer identification number (TIN). Corporate shareholders or secretaries, in addition to their Corporate TIN, are required to provide additional information and documentation.
- Each officer who is a citizen of Ghana or a Ghanaian resident is required to have a Ghana Card (ECOWAS Identity Card), and in the case of foreign nationals who are not based in Ghana, a copy of the biodata page of their travelling passport is required.
- Draft a company constitution in accordance with the Companies Act (optional). An entity which does not wish to customize and register its own company constitution can opt for a standard constitution.
- Appoint external auditors and obtain a consent letter.
- A minimum of two directors is required. Each director needs complete Consent to Act as a Director from and a Statutory Declaration Form.
- A company secretary who is qualified to act as a secretary in accordance with the Companies Act must be appointed and a Consent Form should be obtained.
- Complete the main registration form (Form 3) and Beneficial Ownership Forms to be signed by one of the directors and the Secretary. Beneficial ownership requirements must be complied with.
- A digital address of the business location (office location) should be obtained. Each officer who is a Ghanaian resident is also required to provide their residential digital address.
Step 3: Submission of documents to the Office of the Registrar of Companies and Payment of Fees.
The completed forms and all the relevant documents must be submitted to the Office of the Registrar of Companies for vetting, processing and approval. The processing and approval takes about ten working days to complete.
Upon approval, registration fees and a stamp duty which is 1% of stated capital must be paid.
Step 4: Issuance of registration of documents
Upon successful registration, the ORC will issue the owner with a certificate of incorporation, Form 3, a beneficial ownership profile and a company constitution.
Other Registration Requirements
After legally registering the company with ORC, the following requirements must be complied with. Kindly note that the company registration documents obtained from the Office of the Registrar of Companies will be required for the below registration:
Step 5: Pension Registration
Register with Social Security and National Insurance Trust (SSNIT) and a Private Pension Trustee.
In Ghana, entities (employers) must register with the Social Security and National Insurance Trust (SSNIT) and an approved Second Tier Pension Trustee to ensure that their employees are covered by the country’s social security system.
Step 6: Obtain a Business Operating Permit.
A Business Operating Permit must be obtained from a local government unit. The permit allows the business to operate within the jurisdiction of the local government area in which the business is located.
Step 7: Obtain additional permits and licences, where required.
Depending on the industry or sector in which an entity would like to operate, additional requirements are imposed, including permit registration with relevant authorities.
Step 8: Register with Ghana Investment Promotion Centre (GIPC)
Foreign entities looking to register a business in Ghana are further required to register with the Ghana Investment Promotion Centre (GIPC) and comply with the Country’s local content laws and minimum capital (tiered) prescribed for foreign investors.
For more information or technical assistance on business registration or general secretarial services, kindly contact Maker Hybrand or the author on:
Cell: +233 (0) 249 425 113
Tel: +233 (0) 302 972 249
E-mail: earthur@makerhybrand.com
info@makerhybrand.com
Website: www.makerhybrand.com
