Ghana

Ghana is a West African country that shares land borders with the Ivory Coast to the west, Burkina Faso to the north, and Togo to the east, while its southern shores meet the Atlantic Ocean and the Gulf of Guinea.

General Information

• Full Name: Republic of Ghana
• Population: 33.47 million (World Bank 2022)
• Capital: Accra
• Major Languages: English, African languages including Akan, Ewe
• Major Religions: Christianity, indigenous beliefs, Islam
• Monetary Unit: Ghana cedi (GH₵) (GHS)
• Main Exports: Gold, crude petroleum, cocoa, manganese ore and palm oil
• GNI per Capita: US $2,380 (World Bank 2022)
• Internet Domain: .gh
• International Dialling Code: +233

How Do I Say in Akan?

• How are you?: Wo ho te sen?
• Good morning: Maa chi
• Good evening: Maa jo
• Do you speak English?: Ani owieo Blofo lo?
• Good bye: Nante yie
• Thank you: Me daa si

Dates

Dates are usually written in the day, month and year sequence. For example, 1 July 2024 or 1/7/24.

Numbers are written with a comma to denote thousands and a period to denote fractions. For example, the total area of the country is 238,535 km2 (two hundred thirty eight thousands five hundred and thirty five km2)

Ghana, renowned for its political stability, vibrant culture, and economic diversity, is increasingly recognised as a prime destination for international business in West Africa. With its strategic location, Ghana serves as a gateway for access to the West African market, boasting a stable political environment, a growing economy, and a commitment to democratic principles. Here's why doing business in Ghana offers a unique and promising opportunity for global investors.

Located on the Gulf of Guinea, Ghana benefits from access to significant shipping routes and a gateway to the ECOWAS (Economic Community of West African States) region, a market of over 300 million people. This strategic position is complemented by the Port of Tema and the Port of Takoradi, which are pivotal for international trade and logistics operations in the region.

Ghana's economy is characterised by its diversity, with significant contributions from agriculture, mining, oil and gas, and services sectors. The country has experienced consistent economic growth over the past two decades, driven by sound macroeconomic policies, political stability, and reforms aimed at improving the business environment. Ghana's commitment to sustainable development and investment in infrastructure further enhances its attractiveness as a business destination.

With a population of over 30 million, Ghana boasts a dynamic and expanding consumer market. The country's middle class is growing, driving demand for a wide range of products and services. Ghana's commitment to education and skills development has resulted in a relatively well-educated workforce, offering businesses access to local talent.

Ghana stands out as a beacon of stability and opportunity in West Africa, offering a favorable business environment, strategic geographic location, and a wealth of opportunities across various sectors. For businesses looking to establish or expand their footprint in Africa, Ghana represents a compelling destination with the potential for significant returns on investment. By leveraging Ghana's strategic advantages and navigating its challenges with informed strategies, businesses can unlock the vast potential of this dynamic market.

Ghana's reputation as "the gateway to West Africa" is not just a testament to its geographical location but also to the myriad of investment opportunities it presents. Known for its political stability, democratic governance, and vibrant economy, Ghana is increasingly becoming a magnet for international businesses and investors. 

Ghana stands as a beacon of stability in a region that has seen its share of political upheavals. Its commitment to democratic principles, rule of law, and peaceful transitions of power provides a reassuring environment for investors. This stability is a critical factor for businesses considering long-term investments in West Africa.

Ghana's economy is one of the most dynamic in Africa, characterized by a diverse mix of agriculture, manufacturing, services, and natural resources. The country is rich in resources, including gold, cocoa, oil, and gas, offering significant opportunities for exploration, extraction, and export. Moreover, Ghana's agricultural sector provides vast potential for agribusiness, from production to processing and export.

The Ghanaian government actively encourages foreign investment, providing a range of incentives through the Ghana Investment Promotion Centre (GIPC). These include tax breaks, customs duty exemptions, and investment guarantees. The legal and regulatory framework in Ghana is designed to protect investments and simplify business operations, making it easier for foreign companies to establish and grow their businesses.

Ghana is committed to sustainable economic development, with significant investments in renewable energy, sustainable agriculture, and infrastructure. This focus on sustainability aligns with global trends and offers opportunities for businesses in green energy, eco-friendly products, and sustainable practices.

Ghana has made considerable investments in education and skills development, resulting in a relatively well-educated workforce. The availability of local talent, especially in sectors such as IT, finance, and engineering, is a significant asset for companies operating in Ghana.

Investing in Ghana offers businesses a unique combination of stability, market potential, and a supportive investment climate. The country's strategic location, with its diverse economy and commitment to sustainable development, makes it an attractive destination for investors looking to enter or expand within the African market. 

Ghana has increasingly become an attractive destination for Foreign Direct Investment (FDI) in Africa, thanks to its stable political environment, growing economy, and strategic position as the gateway to the West African market. The government of Ghana, through various reforms and initiatives, has been keen on creating an enabling environment that fosters foreign investment, recognising its critical role in achieving economic growth and sustainable development. Here’s a closer look at FDI in Ghana, highlighting key sectors, incentives, and the overall investment climate.

Key Sectors for Foreign Direct Investment (FDI) in Ghana

• Agriculture: Ghana's agricultural sector offers vast opportunities for investment, particularly in agro-processing and export-oriented agriculture, leveraging the country's rich natural resources.
• Mining and Natural Resources: Ghana is Africa's largest gold producer and has significant deposits of bauxite, manganese, and oil, attracting substantial investments in extraction and processing.
• Energy: The government's focus on diversifying its energy sources has opened up opportunities in renewable energy, oil, and gas exploration, and power generation projects.
• Manufacturing: With the aim of becoming an industrialized economy, Ghana encourages investments in manufacturing, particularly in areas that leverage the country's agricultural output and natural resources.
• ICT and Services: The ICT sector in Ghana is burgeoning, driven by a young and tech-savvy population. There are opportunities in fintech, software development, and telecommunications services.

The Ghana Investment Promotion Centre (GIPC) provides a range of incentives to encourage FDI, including competitive corporate tax rates, tax holidays for specific sectors, customs exemptions for importation of plant, machinery, and equipment, and exemptions from payment of import duties on raw materials. Additionally, there are investment guarantees, including protection against expropriation, guarantee of transfer of profits and dividends, and access to dispute resolution mechanisms.

Ghana's commitment to creating a conducive environment for FDI is evident in its continuous reforms, sector-specific incentives, and efforts to maintain political stability and economic growth. For businesses looking to invest in Africa, Ghana represents a strategic and viable destination with opportunities across diverse sectors. By leveraging Ghana's strengths and addressing its challenges through strategic planning and local engagement, foreign investors can tap into the significant growth potential that Ghana offers.

It is not mandatory to make payments to employees or the authorities from an in-country bank account.

Generally, banks are open to the public from 8.30AM to 4.00PM Monday to Friday. Some banks are open on a Saturday from 8:00AM to 1:00PM.

This information is currently being updated for 2024.

A company is not required to have a legal entity established in Ghana in order to process payroll.

However, should you want to establish a legal entity in the country, the following steps must be taken:

• The availability of the company name should be checked and the appropriate documents should be submitted to obtain an incorporation certificate. Form A should be completed - this document requires the name of the company, nature of the business, names of subscribers and shareholders, their addresses, occupation, directorships in any other company, full names of directors, full name and address of the company secretary and auditors, the number of shares and the stated capital. After the forms are filed, necessary fees paid and certificate issued by the Registrar-General Department, the Ghana Revenue Authority will issue a tax identification number for both the company and the employees of the company.
• The company must obtain a Tax Identification Number (TIN) from the Registrar- General Department or Ghana Revenue Authority before proceeding to company registration.
• A Commissioner of Oaths authenticates the forms required for the certificate to commence business. (1 day); Form 4 must be completed to issue the certificate.
• Obtain the certificate to commence business from the Registrar-General’s Department. (2 days)
• The following documents must be presented to deposit paid-in capital in a bank account: copy of company regulations, certificate of incorporation, certificate to commence business, and signatures of the authorized company representatives. (1 day)
• A business license should be obtained from the Metropolitan Authority. (7 days)
• The Metropolitan Authority shall inspect the work premises. (1 day)
• The company must apply for social security (1 day). To apply for social security, the company must attach a list of employees, their respective salaries and social security numbers, the company’s certificate of incorporation and certificate to commence business, company regulations, Tax Identification Number, Profile of Directors or Local Managers, copies of Directors or Local Manager valid ID.
• Obtain an environmental certificate the Environmental Protection Agency (EPA). (25 days)
• To apply for social security, the company must attach the list of employees, their respective salary, social security number, the company certificate of incorporation and certificate to commence business.

To process companies’ payroll, the firm will need formal registration of business at Registrar-General’s department and thereafter at the Ghana Revenue Authority.

The documents required for registration with the tax authority are:

• Certificate of Incorporation
• Certificate to commence business
• Company’s Regulation

A unique computer generated Tax Identification Number (TIN) is given to tax payers for all official transactions.

This information is currently being updated for 2024.

To work in Ghana, both a residence permit and a work permit are needed.

Applications for work permits need to be directed to the Ghana Immigration Service (GIS), along with a completed and signed application, the following should be supplied:

• CV
• Any educational and professional certificates
• Work contract
• A police report from your country of residence
• A medical report
• Copies of the relevant pages in the passport

The employer should be able to deal with the application. The usual processing time is four weeks.

Residence permits are granted by the Ghana Immigration Service to expatriate personnel employed by companies or individuals under the immigration quota system. The immigration quota specifies the number of foreign nationals a person or firm is permitted to employ in Ghana in a particular occupation. A foreign national on a company’s quota automatically receives a residence permit but must apply for the permit to be stamped into his or her passport.

This information is currently being updated for 2024.

The tax year runs from 1 January to 31 December.

Income Tax

Residents are subject to tax on chargeable income accruing in, derived from, brought into or received in Ghana. Non-residents are subject to tax only on chargeable income accruing in or derived from Ghana.

Individuals are considered a resident in Ghana if they:

• Have been in Ghana for at least 183 days in a 12-month period that begins/ends during the year of assessment.
• An employee or official of the government of Ghana posted abroad during the year of assessment
• A citizen with a permanent home in Ghana who is temporarily absent from Ghana for no longer than 365 successive days

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

Employees in Ghana pay income tax using the Pay As You Earn system. PAYE contributions are withholdings from salaries of employees to satisfy their income tax responsibilities. PAYE is computed with the personal income tax rates.

The income tax rates are as follows:

This information is currently being updated for 2024.

The Social Security and National Insurance Trust (SSNIT) is a statutory public trust charged with the administration of Ghana’s National Pension Scheme.

The Pension Scheme administered by SSNIT has a registered active membership of over one million and over 100,000 pensioners who collect their monthly pension from SSNIT. This is regulated by the National Pension Act 2008, which is administered by the Social Security and national Insurance Trust (SSNIT).

Employers are expected to ensure that employees in their employment are registered and that contributions are paid on their behalf. Employees may elect to make additional contributions. There is also voluntary coverage for self-employed persons.

Social security contributions in Ghana are mandatory. Those exempted are:

• Officers and men of the Armed Forces and persons exempted by law
• The Justices of the Superior Court as exempted under the constitution
• All diplomatic agents

Payments to the Social Security and National Insurance Trust must be made within 14 days from the beginning of the following month.

An employer who fails to register the company and/or employees will be required to pay all the contribution which should have been deducted from the employees and penalty (3% per month) due from the day they qualified to register.

Statutory contributions towards retirements are classified into three, as states below:

• First tier: A mandatory basic social security scheme
• Second tier: A mandatory fully funded and privately managed occupational pension scheme
• Third tier: A voluntary fully funded and privately managed provident fund and personal pension scheme

The mandatory monthly pension contribution rates are as follows:

• For employers: 13% of the employee’s salary; and
• For employees: 5.5% of the employee’s salary.

This information is currently being updated for 2024.

The employer has a responsibility to file monthly tax returns on behalf of the employee.

Tax withheld must be filed and payment made by the 15th of the month following the month in which the tax is withheld. Employers are required to file employer’s annual tax returns on behalf of their employees not later than 30th April following the end of every year of assessment specifying the employee income, tax deduction, exempt income, reliefs and chargeable income.

The penalties for the failure to pay tax on due dates are:

• Up to three months - 10% of the unpaid tax
• Exceeding three months - 30% of the unpaid amount

This information is currently being updated for 2024.

The deadline for a new employee to be registered with the authorities is their start date.

Upon employment, new hires are required to submit the following to their current employer:

• Social Security (SSNIT No.)
• Taxpayer Identification No. (TIN)

To secure these numbers, new employees need to register with SSNIT and GRA prior to their employment. This is to ensure that the employer can process the respective statutory contribution of the employees.

Registration with the Bureau of Internal Revenue (BIR) to secure TIN will follow a different process. The employee has to fill out the Application for Registration (BIR Form 1902) and attach a copy of the birth certificate. The employer will submit the form to the Revenue District Office (RDO) where the company is registered.

This information is currently being updated for 2024.

There is no specific time-scale for paying leavers their final salary payment. The local authorities must be notified of the leaver.

It is not mandatory that payments be made from an in-country bank account.

Reports

Payroll reports must be kept for at least 6 years.

Ghanaian Payslip Example

This information is currently being updated for 2024.

This information is currently being updated for 2024.

The national daily minimum wage in Ghana for the year 2024 has been set at GHS 18.15.

This new rate represents an increase from the previous minimum wage of GHS 14.88 and became effective from January 1st, 2024.

This change in the minimum wage was implemented by the National Tripartite Committee in accordance with Section 113 (1) (a) of the Labour Act, 2003 (Act 651)​

This information is currently being updated for 2024.

Holiday Accrual and Calculations in Ghana

Every employee is entitled to 15 days paid leave each year. Public holidays cannot be deducted from the leave entitlement. However, annual leave can range from 21 to 36 days depending on an individual worker’s position and length of service within the company.

Maternity Leave

A female worker, on the production of a medical certificate that is issued by a medical practitioner or a midwife indicating the expected date of her confinement, is entitled to a period of maternity leave of at least 12 weeks in addition to any period of annual leave she is entitled to after her period of confinement.

Whilst on maternity leave, the employee shall be entitled to be paid her full pay and other benefits to which she is otherwise entitled.

Maternity leave may be extended for at least two additional weeks where the confinement is abnormal or where in the same confinement two or more babies are born.

Paternity Leave

There is no provision for paternity leave in Ghana.

Sickness

A period of absence from work allowed due to sickness, which is certified by a medical practitioner and which occurs after the commencement of and during annual leave, shall not be deducted from annual leave. There are no other provisions on sick leave in Ghana.

National Service

Ghanaian students who graduate from accredited institutions are required under law to do one year of national service. The National Service Secretariat (NSS) is part of the Ghana Government and formulates the policies and structures for national service.

This information is currently being updated for 2024.

The working week in Ghana is Monday to Friday.

The working day for commercial offices is usually 8:00AM to 5:00PM.

Lunch breaks are usually one hour. Some offices and shops will be open from 8.00AM to 1.00PM on Saturdays.

Government offices will not be operational before 9.00AM.

There are multiple statutory holiday schedules within Ghana. Below are the statutory national holidays in Ghana for 2024.

*Please note that the dates for Eid ul-Fitr and Eid al-Adha are tentative and depend on the sighting of the moon.

This information is currently being updated for 2024.

Expenses

Expenses should be paid on expenses forms and supporting documents should have the company’s name attached to it to avoid it being taxable.

In 2024, Ghana implemented significant changes to its personal income tax, affecting both the tax bands and rates. The amendment of the Income Tax Act, 2015 (Act 896), under the Income Tax Amendment (No 2) Act 2023, Act 1111, revised these rates to align with the increase in the minimum wage. The new income tax rates, effective from January 1, 2024, are as follows:

• The first GH¢ 5,880 of chargeable income is tax-free.
• The next GH¢ 1,320 is taxed at 5%.
• The next GH¢ 1,560 is taxed at 10%.
• The next GH¢ 38,000 is taxed at 17.5%.
• The next GH¢ 192,000 is taxed at 25%.
• The next GH¢ 366,240 is taxed at 30%.
• Income exceeding GH¢600,000 is taxed at 35%.

Additionally, the upper limits of quantifiable motor vehicle benefits in the employment tax computation have been increased. There are also changes in the tax rate for gains from the realization of investment assets and gifts received by individuals, with a 25% tax rate applicable if the individual elects to tax such income separately.

There is an exemption on withdrawals from retirement funds related to COVID-19 or current economic hardships.

These changes reflect Ghana's efforts to adjust its tax system in response to economic conditions and to ensure a fair and progressive taxation system.

Please note that this document gives general guidance only and should not be regarded as an authoritative or complete statement of the law, regulations or tax position in any country. You should always seek specific advice for each specific situation. This document should not be relied upon as professional advice and activpayroll accepts no liability for reliance on its contents.