Company formation in Ghana

Before deciding to set up a new company in Ghana, read the information below to understand the characteristics of a Limited Liability Company (LLC):

Shareholders: the company is required to have at least 1 shareholder. Both local and foreign individuals or entities can act as shareholders.

Director: two directors must be appointed, one of the directors must be ordinarily resident in Ghana

Company secretary: it is mandatory.

Minimum share capital: there is no minimum capital requirement for locally owned companies; for foreign-owned companies, the minimum stated capital is $500,000 USD for wholly foreign-owned entities.

Legal address: a registered office in Ghana is mandatory and must be provided during the registration process.

Registered agent: appointment of a local registered agent, who must be a management company, is compulsory. This agent maintains and stores all company documentation.

Liability: the liability of its shareholders is limited to the amount of capital they have invested in the company through their shares.

Accounting: companies are required to maintain proper financial records and prepare annual accounts. Annual filings and tax compliance with the Ghana Revenue Authority (GRA) are mandatory.

• The general corporate income tax (CIT) rate is 25%.
• Mining and upstream petroleum companies pay CIT at a rate of 35%, while companies principally engaged in the hotel industry pay a reduced rate of 22%.
• The CIT rate for companies engaged in non-traditional exports is 8%, while banks lending to the agricultural and leasing sectors pay a CIT rate of 20% on income from those businesses. Lottery operators are also subject to a 20% income tax on gross gaming revenue.

Residents are subject to tax at rates ranging between 0% and 35% on the following annual graduated scale of income:

• 0% - up to 5,880 GHS;
• 5% - next 1,320 GHS;
• 10% - next 1,560 GHS;
• 17,5% - next 38,000 GHS;
• 25% - next 192,000 GHS;
• 30% - next 366,240 GHS;
• 35% - Exceeding 600,000 GHS.

Non-residents pay taxes at the flat rate of 25%.

• The standard VAT rate is 15%.
• However, supplies of a retailer of goods whose annual turnover is at least GHS 200,000 but does not exceed GHS 500,000 are taxed at a flat rate of 3%.
• A flat rate of 5% is also applicable on the taxable supply of immovable property by a taxable person: for rental purposes other than for accommodation in a dwelling or in a commercial rental establishment, or who is an estate developer.

Double taxation avoidance agreements in Ghana: ‍United Kingdom, France, Germany, South Africa, Italy, Netherlands, Belgium, Denmark, Switzerland.