Experienced entrepreneurs know that when building a business in West Africa, you need to start in Ghana. The economy of this country is one of the most actively developing in the West African region and provides significant opportunities in the fields of manufacturing, transport, telecommunications and a number of other industries. The state is considered a fairly reliable place for investment. Guarantees against expropriation of property are enshrined in the Investment Act and in the Constitution of Ghana.
Here are just some of the investment guarantees:
- free movement of capital, profits and payments in relation to attracted foreign loans;
- Ghana is a party to the MIGA Convention insuring non-commercial risk;
- Double Taxation Agreements (DTA) - to streamline tax obligations of investors and prevent double taxation.
The main motivations for investing in Ghana are the following factors:
- exemption from customs duties for factories, machinery and equipment imported for investment purposes;
- a strategic investor who has invested more than $ 30 million can negotiate additional exemptions under the Ghana Investment Law;
- corporate tax is only 25%.
International M&A in Ghana
Any financing required to initiate a public acquisition of a company in Ghana was carried out through one of the authorized banks in that jurisdiction.
Foreign investors are required to register their investments with the regulator. This allows you to obtain a work permit and other benefits. The regulator keeps a register of companies which it regulates.
It may take more than six months to import the authorized capital into the country and open bank accounts in Ghana. But good news is that foreigners do not have to create a JV with residents, it is enough if one of the company managers or even a secretary is a Ghana citizen.
Industry regulations
Ghana is a resource-rich nation with traditional key sectors. Financial system of the jurisdiction has been showing rapid growth the last few years. If you are interested in registering a financial company in Ghana or setting up trading and manufacturing companies, it is worth considering that there is no need to obtain a permit for this. Direct supervision over the activities of such legal entities is not practiced.
The Central Bank is the key regulator for M&A in the financial sector of Ghana. It issues licenses and permits for such activities.
Insurance sector
Regulators are actively implementing industry guidelines.
If you are interested in registering an insurance business in Ghana, please note that those with a significant stake in the insurance business are not entitled to sell or transfer a stake in this company before getting a written approval from the industry regulator.
Mining industry
It is only possible to initiate an M&A transaction in the mining sector in Ghana through stock transactions with the approval of the regulator. Acquisition of a stake in a Ghanaian mining company with control of more than 20% of the votes requires the approval of the Minister. Failure to comply with the requirements to acquire a controlling stake in the mining industry of Ghana is an offense punishable by a fine or even imprisonment.
Start a public M&A deal in Ghana: Documentation and fees
Typically, the fees associated with a business acquisition in Ghana will largely depend on the nature of the transaction. If the transaction involves the acquisition of shares in a publicly traded company in Ghana, the documents must be filed with the Registrar General.
NOTE: Anyone who buys or sells shares in a listed company must inform the market when their holdings exceed, or fall below a certain threshold. One does not have to pay for the notification.
Final word
It should be noted that Ghana has a low crime rate and foreigners feel pretty safe there. In recent years, multinational corporations have been actively investing in sub-Saharan Africa, also called Black Africa. Ghana and Kenya are the leaders in terms of average annual growth in projects with FDI. The growing interest of corporations in doing business in Ghana has led to increasing of the companies management standards and overall business culture in this African country.
If you intend to start listing on the GSE, you initially need to register an LLC in Ghana and prepare a prospectus and submit it for regulatory approval.
If you require professional assistance in M&A transactions in Ghana, please contact IQ Decision UK specialists. Contacts are listed on the website.
