Ghana’s rapidly growing technology sector continues to demonstrate the country’s potential as a hub for innovation and entrepreneurship in West Africa. According to recent estimates, Ghana’s ICT industry is currently valued at $1 billion and projected to reach $5 billion by 2030 as more global players recognize the strategic opportunities that Ghana presents.
While Ghana maintains a largely open and transparent business environment, ongoing regulatory compliance remains essential for companies seeking long-term stability and success. The Ghana Investment Promotion Centre (GIPC) actively works to promote a progressive policy framework that supports domestic and international businesses. However, as our research at Norebase has shown, some companies struggle with non-compliance issues simply due to a lack of awareness regarding their obligations under Ghanaian law.
How to Register a Business in Ghana
Step 1: Choose a Business Structure
The first step in registering a business in Ghana is to choose a business structure. The most common business structures in Ghana are:
- Company limited by shares: This type of business structure combines the characteristics of a partnership and a corporation. The liability of owners is limited to the amount of their investment in the company. This may be a private or public limited company.
- Company limited by guarantee: A corporation without share capital is known as a company limited by guarantee. It is a not-for-profit organization, so making money cannot be one of its goals. Instead of a board of directors, the corporation has an executive council, whose members are frequently referred to as “guarantors.”
- Foreign Company: A foreign company is a company that is registered in another country but operates in Ghana. It can either be a branch office or a subsidiary of the foreign parent company.
Step 2: Choose a business name
Once you’ve chosen a business structure, you will need to choose a business name. Your business name must be unique and not already registered with the Registrar General’s Department. You can search for available business names on the RGD website.
Step 3: Register your business on Norebase
Norebase eases the process of registering Ghanaian businesses with the Registrar General’s Department with our seamless platform and lawyers. You can use our price calculator to determine the cost of registering your business in Ghana.
Below are the requirements for registering a business in Ghana
- Business Name.
- Nature of Business (Give a brief description of the business’ business activities).
- Address of business (House Number or Building Name, Street Name, City, District, Region).
- Email, Telephone number and Postal Address of the business.
- Personal details of the proprietor of a Sole Proprietor business, Partners in a Partnership Firm and members of the company. (Nationality, date of birth, occupation, contact, email and residential address).
- Tax Identification Number of the proprietor of the business or members of the company.
Step 4: Obtain the required documents
After registering your business name, you will need to obtain the required business documents. These documents allow you to operate a business in Ghana. The cost of business documents varies depending on the type of business. When you register with Norebase, we help you obtain the required documents to operate your business in Ghana.
Step 6: Open a Business Bank Account
After obtaining the required registration documents, you can open a business bank account. This will allow you to deposit and withdraw money, pay bills, and manage your finances. This goes without saying, but yes, when you register your business with Norebase, we can help you open a business bank account.
Regulatory Compliance Checklist for Ghanaian Companies
After the registration process, some companies encounter non-compliance problems because they are unaware of the need to adhere to the regulatory compliance of the country they operate in. Here’s a checklist of compliance obligations to comply with as a Ghanaian business.
1. Annual Returns Filing
For Ghanaian businesses, this regulatory compliance is essential as it serves as a way for companies to inform the appropriate regulators of their present condition. Since it also denotes a renewal of registration, it is consequently regarded as necessary. It has to be submitted annually. The Office of the Registrar of Companies (ORC) is the main agency that is in charge of this compliance, and it requires every company both indigenous and foreign to file its annual returns once every year latest by 31st December. Other agencies like the Ghana Immigration Service (GIS) and Ghana Revenue Authority (GRA) require companies to file annual returns for updating the status of the number of foreign workers at the company and for tax-related information respectively.
The Companies Act, 2019, Section 126(7), provides that “where a company defaults in complying with the filing of Annual Returns and Financial Statements, the company and every officer of the company that is in default is liable to pay to the Registrar, an administrative penalty of 25 penalty units for each day during which the default continues.” The ORC will fully implement this provision as of 1st June 2023.
2. Company’s Income Tax Return
This is a direct tax that all registered entities that engage in taxable activity and generate money are required to pay. Every company must register with GRA as a taxpayer and submit this filing; this is done upon the incorporation of the company.
The standard rate of corporate income tax is 25%. However, current rates vary according to the type of business a company conducts, where it is located, and the industry in which it works. All taxpayers are obligated to submit their year-end tax returns and pay any unpaid taxes, the final return and tax are due four months after the end of the fiscal year. Every three months, every business must present an anticipated self-assessment. A provisional self-assessment that can be amended upwards or downwards until the last day of the company’s base period must be included with the yearly returns. Four quarterly instalments of the self-assessment payment should be made on the last day of each quarter (i.e., March, June, September, and December).
If tax is not paid by the deadline, a penalty equal to 125% of the statutory rate is applied to the amount owing at the beginning of the term. The penalty is compounded each month.
3. Value Added Tax (VAT)
VAT is applied on all goods and services rendered in Ghana and imported into the country, except for some goods and services that are exempted. The standard rate for VAT is 15%. A Ghana Education Trust Fund Levy and Covid-19 Health Recovery Levy are also paid alongside VAT on a monthly basis.
The payment is made to GRA, and any default in payment leads to a fine being levied on the company. Avoid this by registering with Norebase, we expedite the tax filing process and ensure that your company is in compliance.
4. Social Security and National Insurance Trust (SSNIT)
This payment compensates for a portion of the income lost by workers in Ghana due to incapacity, aging, or death of a family member, where dependents receive a lump-sum payout. In addition to paying pensions and other benefits, it is also used to award emigration benefits to non-Ghanaian members who are permanently relocating elsewhere.
Registration and payment monthly for SSNIT is mandatory for all companies, both local and foreign, for or on behalf of their Ghanaian employees. The contribution plan is divided into three tiers, the last one is voluntary while the first two are mandatory. The needed contribution is 5.5% from the employee and 13% from the company. 13.5% of the 18.5% total contribution goes to the first tier schemes, while 5% goes to the second-tier schemes.
5. Pay as You Earn
In Ghana, employers are required to deduct tax from an employee’s salary and other bonuses, on a monthly basis. The highest rate is 30% for tax-resident employees. Non-resident employees’ salaries and other remuneration are subject to a flat rate of 25%. By the fifteenth day of the next month, employers are required to pay the GRA the deducted taxes. Employers must also submit yearly employee returns by 30 April of the year after the return-related year.
Overall, startups should seek legal counsel and other expert guidance to make sure they are adhering to all legal and regulatory standards in order to follow the compliance checklist for Ghanaian firms. At Norebase, we are happy to assist companies in navigating their compliance requirements. We have a platform, Autocomply, that keeps you informed and updated on all your legal obligations and compliance to avoid missing deadlines.
Register at Norebase today to ease your compliance journey.
