GHANA COUNTRY OVERVIEW

GENERAL INFORMATION

Official Name: Republic of Ghana
Area: abt 240,000 km2
Population: abt 26 million esteemed
GDP growth esteemed in 1014: 7.5%
GDP pro-capita: abt 2,000 USD (world economic outlook database 2013)
Capital: Accra 2,269 mln (CIA World Factbook)
State: unitary state, independent from the United Kingdom from the 6th of March 1957
Government: Unitary presidential constitutional republic, the head of the State is also the head of the Government.
Religion: Christian 69%, Muslim 16%, Animist 15%
Languages: English (official language), other local languages
Currency: New Ghanaian Cedi (GHS); 1 € = 2.54 GHS (10.04.2013)

SECTORS AND GDP DISTRIBUTION

- Agriculture 24.6%
- Industrial sector 27.5%
- Services 47.9%

FORECAST AND INVESTMENT OPPORTUNITIES

The construction sector is growing considerably (9.2% of the GP – source: African Economic Outlook 2013) because the housing needs are not satisfied by the quantity of the available residential units.
Bank of Ghana estimations highlight a need for 1.5 million affordable homes (social housing projects, meaning real estate development projects funded by national or international institutions).
The main obstacle to the sale of real estates concerns the access to credit.
There is a positive response to the made-in-Italy; over the last 10 years, the property market registered transactions worth an estimated value of about 2 billion USD.
Among the private entities, one organisation that plays an important role in the real estate development of the country is Ghana Real Estate Developers Association (GREDA).
This country has an urgent need for infrastructures (roads, drainage systems, water mains, agricultural drainage, industrial plants, port facilities) and for the maintenance of the few ones already existing.
The local productivity (especially concrete and building materials) can guarantee high profit margins; the furniture industry follows the fast progression not only of the housing sector but also of the civil construction, which is linked to services (offices, shopping centres, tourist facilities, shops, showrooms..).
Agriculture is an extremely important sector for Ghana’s economy and it constitutes 23% of the country GDP; The main products of Ghana’s agriculture are cocoa, rice, coffee, sugar, tropical fruit palm oil, peanuts, tobacco.
Aiming to produce 10% of the energy from renewable sources, the government supports the production of fuel for biodiesel engines (for example jatropha seeds, Brong Ahafo region).

TYPES OF FOREIGN DIRECT INVESTMENT

Company typology: Sole proprietorship, Partnership, Company Limited by shares, Company limited by guarantees, External company (branch), Companies Code;
The current legislation in Ghana requires the presence of one local partner only to the companies that operate in the mining sector.
The minimum investment required for every foreign member in a company under Ghanaian law is:
• USD 10,000.00 if the joint venture is mixed, i.e. composed of both foreign and Ghanaian members
• USD 50,000.00 if the joint venture corporate in Ghana is 100% composed of foreign members;
• USD 300,000.00 for the registration of companies that operate mere trading activities.

FISCAL ASPECTS

The income tax rate on legal persons is fixed at 25%, the dividend payment to local or foreign partners is subject to a rate of 8%;
If a foreign operator works in Ghana through a branch, the neat revenue is subject to a further 10% deduction;
There are tax incentives for free-zone companies (ten-year exemptions and application of a reduced 8% tax rate), for companies that deal with the processing of agricultural products (adjusted rates that can be up to 20% depending on the company’s locationing) and waste disposal (rate discounts up to 50%);
Repatriation of profits: non-resident people doing business in Ghana through a stable organization can repatriate their profits paying a 10% tax.

LEGAL SYSTEM CHARACTERISTICS AND LEGAL ASPECTS

Mixed system including Common law and Customary law;
The judicial system bodies are: Supreme Court, High Court, Court of Appeal, Regional Tribunals.

BILATERAL AGREEMENTS

The Convention for the avoidance of double taxation concerning income tax and the prevention of tax evasion was signed on the 19.02.2004;
Agreement to avoid double taxation on incomes deriving from air and maritime navigation (signed in Accra on the 23.08.1968 and entered into force on the 24.03.1977, with exchange of notes done on the 30.06.1972 in order to determine its retroactivity up to the 01.01.1961);
Ghana ratified the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

INSURANCE ISSUES

SACE insurability conditions: no conditions for private and baking risk; conditions for sovereign risk.