Ghana's quickly expanding technology industry continues to demonstrate the nation's capacity as a center for development and entrepreneurship in West Africa. According to current quotes, Ghana's ICT sector is currently valued at $1 billion and forecasted to reach $5 billion by 2030 as more international players identify the calculated chances that Ghana provides.
While Ghana keeps a greatly open and clear business setting, recurring regulatory conformity stays necessary for companies seeking long-term security and success. The Ghana Investment Promotion Centre (GIPC) proactively functions to promote a modern policy framework that supports residential and worldwide businesses. However, some companies deal with non-compliance concerns merely because of an absence of understanding concerning their commitments under Ghanaian law.
How to Register a Business in Ghana?
There are different types of lorries available to an entrepreneur to release the business endeavor. The kind of business organisation used may rely on factors to consider such as limiting liability, tax, funding requirements, and control.
Starting a Business in Ghana there are 5 major alternatives available to the business owner in Ghana:
1. Sole proprietorship
Perfect for personal business ventures. The business owner gains the profit and is responsible for risks.
2. Partnership
Ideal for two or more people in a shared business venture. They share profits, duties, and have joint goals.
3. Company
a. Limited liability company
A company which is different and distinct from its members. The obligation of its investors is restricted to the overdue amount on their shares.
b. Unlimited liability company
The liability of shareholders is not restricted to the overdue quantity on their shares. Therefore, where the company owes money for example, the shareholders' might be held directly liable for the debts.
c. Company limited by shares
The company is generally integrated with the things of carrying on company for the objective of earning money. The nature of the interest of members or shareholders is the shares they register for.
d. Company limited by guarantee
A business which is incorporated for a purpose other than continuing a business and making revenues. It is normally a charity company.
4. External company
For foreign companies planning to open a branch in Ghana but maintaining the parent company's identity and framework.
5. Cooperative
A business run by several individuals pooling resources. Used often in agriculture or trade for shared financial, social, or cultural gains.
Apart from sole proprietorships, the regulation calls for every other kind of business organisation to be signed up in order for the entity to be dressed with lawful character.
Significance of business registration- Why should you register your business
- Company registration establishes business as a legal entity.
- Business registration helps to stay certified and alleviate threats.
- Registering your organization formalizes your operations and helps position the business for development and growth.
- As a registered business it is a lot easier to file a claim against, enter agreements and employ people among others.
- You are required to register your organization to be able to open a business savings account.
- It likewise boosts business brand name and builds depend on amongst prospective clients or clients.
Pre-Registration Tips
Before you register your business at the Office of the Registrar of companies, there are a variety of Steps you must pick. These are the initial collection of Steps that a person needs to carry out.
Steps to Register Your Business in Ghana
Step 1: Select a Business Structure
The very first step in registering a company in Ghana is to choose a company structure. The most common company frameworks in Ghana are:
- A "Company Limited by Shares" blends partnership and corporation aspects. Owner liability is only as much as they've invested in the business. This setup could apply to private or public firms.
- The "Company Limited by Guarantee" has no share capital. It's a nonprofit organization, and profit-making isn't a goal. Instead of director boards, it has an executive council. Often we call these council members "guarantors."
- A "Foreign Company" is registered outside but operates within Ghana. It could be a branch or subsidiary of the overseas parent corporation.
Step 2: Choose a business name
When you've selected a business structure, you will be required to select a business name. Your company name should be unique and not currently signed up with the Registrar General's Department. You can search for readily available business names on the RGD internet site.
Step 3: Conduct a Business Name Search
After picking a company name, perform a business name search at the Workplace of the Registrar of Business (ORC) to ascertain the availability of the suggested company name. Conducting a business name search helps to recognize if there are comparable or existing names to the recommended company name. Once it is confirmed that there is a similar or an existing name, it is needed that an expression is contributed to the recommended name to make it distinctive.
Below are the needs for registering up a company 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 company 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 organization name, you will certainly need to acquire the called for company files. These documents permit you to operate an organization in Ghana. The expense of business records differs depending upon the sort of company. When you sign up with Start an Idea, we assist you to obtain the calls for documents to run your organization in Ghana.
Step 6: Open a Business Bank Account
After acquiring the needed enrollment papers, you can open a business bank account. This will permit you to deposit and take out money, pay bills, and handle your finances. This goes without saying, however indeed, when you register your organization with Start an Idea, we can aid you open a company checking account.
Regulatory Compliance Checklist for Ghanaian Companies
After the registration procedure, some companies run into non-compliance issues since they are not aware of the need to comply with the regulations of the country they operate in. Below's a checklist of compliance responsibilities to abide by as a Ghanaian organization.
1. Annual Returns Filing
For Ghanaian companies, this regulatory compliance is necessary as it functions as a way for companies to notify the ideal regulators of their present condition. Since it also denotes a revival of registration, it is consequently regarded as necessary. It has to be sent yearly. The Office of the Registrar of Companies (ORC) is the primary company that supervises this compliance, and it calls for every company both aboriginal and international to submit its annual returns once every year most recently by 31st December. Other companies like the Ghana Immigration Service (GIS) and Ghana Revenue Authority (GRA) call for companies to submit annual returns for upgrading the status of the number of international employees at the company and for tax-related information specifically.
The Companies Act, 2019, Section 126 (7), provides that "where a business defaults in adhering to the declaring of Annual Returns and Financial Statements, the company and every policeman of the company that remains in default is reliant pay to the Registrar, a management penalty of 25 penalty devices for every day during which the default continues."
2. Company’s Income Tax Return
This is a direct tax obligation that all registered entities that take part in taxable activity and generate money are required to pay. Every company has to register with GRA as a taxpayer and submit this declaration; this is done upon the unification of the company.
The basic rate of corporate earnings tax obligation is 25%. Nonetheless, current prices differ according to the type of company a company carries out, where it is located, and the market in which it functions. All taxpayers are obligated to submit their year-end tax returns and pay any type of unpaid tax obligations, the last return and tax obligation scheduled 4 months after completion of the fiscal year. Every 3 months, every company should present an expected self-assessment. A provisionary self-assessment that can be modified upwards or downwards up until the last day of the company's base duration should be included with the yearly returns. Four quarterly installments of the self-assessment settlement should be made on the last day of each quarter (i.e., March, June, September, and December).
If tax obligation is not paid by the due date, a fine equal to 125% of the statutory price is put on the quantity owing at the beginning of the term. The charge is compounded each month.
3. Value Added Tax
VAT is used on all items and solutions rendered in Ghana and imported into the country, with the exception of some goods and solutions that are exempted. The typical rate for VAT is 15%. A Ghana Education Trust Fund Levy and Covid-19 Health Recovery Levy are likewise paid along with VAT on a regular monthly basis.
The payment is made to GRA, and any type of default in payment results in a penalty being imposed on the company. Avoid this by signing up with Start an Idea, we quicken the tax obligation filing procedure and make sure that your company is in conformity.
4. Social Security and National Insurance Trust (SSNIT)
This repayment makes up for a portion of the income lost by employees in Ghana as a result of inability, aging, or fatality of a member of the family, where dependents receive a lump-sum payout. In addition to paying pensions and various other advantages, it is also used to award emigration advantages to non-Ghanaian members who are permanently relocating somewhere else.
Registration and repayment month-to-month 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 3 tiers, the last one is volunteer while the very first 2 are obligatory. The required contribution is 5.5% from the worker and 13% from the company. 13.5% of the 18.5% total payment goes to the first tier schemes, while 5% goes to the second-tier systems.
5. Pay as You Gain
In Ghana, companies are required to deduct tax obligation from a worker's income and various other bonus offers, on a monthly basis. The highest price is 30% for tax-resident workers. Non-resident workers' incomes and various other compensation are subject to a level price of 25%. By the fifteenth day of the next month, employers are needed to pay the GRA the deducted taxes. Companies need to likewise submit annual worker 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 Start an Idea, we are happy to assist companies in navigating their compliance requirements.
