Although Ghana generally encourages foreign investment, a person who is not a citizen or an enterprise that is not wholly-owned by a citizen is restricted from investing or participating in:

• the sale of goods or provision of services in a market, petty trading or hawking of goods in a stall;
• the operation of a taxi or car hire service in an enterprise that has a fleet of less than twenty-five vehicles;
• the operation of a beauty salon or a barbershop;
• the printing of recharge scratch cards for the use of subscribers of telecommunication services;
• the production of exercise books and other basic stationery;
• the retail of finished pharmaceutical products;
• the production, supply and retail of sachet water; and
• all aspects of pool betting business and lotteries, except football pool.

Ghana’s regime can be described as a combination of both national security and economic protectionism.

The economic protectionism measures imposed by the government in addition to the activities reserved for Ghanaian citizens and enterprises discussed in section 1 above include but are not limited to the placement of restrictions on the importation of certain goods to protect local business.

Examples include the following:

• As a safeguard measure to protect the domestic cement industry against import surges of Portland cement, a law was passed in 2016 that requires every commercial importation of Portland cement from outside the ECOWAS region to be covered by permit or license from the Ministry of Trade and Industry;
• To provide incentives for the local automotive manufacturers and assemblers registered under the Ghana Automotive Manufacturing Development, a law was passed in 2020 to amongst other things, ban the importation of salvaged motor vehicles and certain vehicles over ten years of age;

In response to complaints by poultry farmers about the competition from importers of frozen chicken, the Ministry of Agriculture restricted the importation of frozen chicken to support local producers;

• As a result of illegal small-scale gold mining (legally reserved for Ghanaians) by Chinese nationals that caused environmental catastrophes, the Government’s policy response, which was a combination of both economic protectionism and national security, led to arrests, sentencing and deportation of some Chinese miners. It also resulted in the launch of a five-year Multilateral Mining Integrated Project in 2017 to direct small-scale miners towards areas where the presence of gold has been confirmed and where destruction caused by mining can be limited and
• More recently, in November 2022, the Bank of Ghana restricted access to foreign exchange to customers for the importation of a select list of imported products, including rice, poultry, vegetable oils, and pasta, among other items to implement a directive from the President of Ghana. This step was taken as part of Government’s efforts to shore up the country’s foreign exchange reserves while also encouraging domestic production and consumption of import substitutes.

A foreign investor is a natural or juridical non-citizen, who makes an investment in Ghana. Investments include direct, indirect and portfolio investments and apply to investments from all countries.

In addition to the activities listed in Question 1 above, foreign investment restrictions are applicable in the mining, energy, financial, fisheries, gaming, payment services and other sectors.

Mining

Licenses for small-scale mining are reserved for Ghanaians. Also, a mineral right in respect of industrial mineral (restricted reconnaissance, prospecting or mining licenses) are only granted to Ghanaians but foreigners may be granted such rights provided the relevant threshold is met.

Energy (oil and gas)

A foreign investor or company applying for a license from the National Petroleum Authority to engage in an activity in the downstream petroleum sector must show that it is in a registered joint venture agreement with a citizen of Ghana or a Ghanaian company.

A foreign investor is also required to enter into a joint venture agreement, with a local partner or if directed by the Petroleum Commission, a channel partnership or strategic alliance arrangement with an indigenous Ghanaian company, in the upstream petroleum industry, where in the opinion of the Petroleum Commission, the channel partnership or strategic alliance will deepen local content and local participation and maximize technology transfer to the indigenous Ghanaian company. The gaming and fisheries sectors also require local participation.

Payment Systems

A person applying for a license to provide a payment service is required to incorporate a limited liability company with at least 30% Ghanaian equity participation.

Under the Ghana Investment Promotion Centre Act, 2013 (Act 865) ("GIPC Act"), a foreign investor may participate in an enterprise where the foreign investor:

• in the case of a joint enterprise with a partner who is a citizen, invests a foreign capital of not less than USD 200,000 in cash or capital goods relevant to the investment or a combination of both by way of equity participation and the partner does not have less than 10% equity participation in the joint enterprise;
• in the case where the enterprise is wholly owned by that foreign investor, invests a foreign capital of not less than USD 500,000 in cash or capital goods relevant to the investment or a combination of both by way of equity capital in the enterprise; or
• in the case of a trading enterprise, invests a foreign capital of not less than USD 1,000,000 in cash or capital goods or services relevant to the investments.
• These minimum capital requirements, however, do not apply to portfolio investments or an enterprise that is set up solely for export trading and manufacturing.
• In the mining sector, a non-citizen may apply for a mineral right in respect of industrial mineral provided the proposed investment in the mineral operations is USD 10,000,000 or more.

Foreign investors in the petroleum sector are also subject to local content requirements put in place by the Petroleum Commission. For example:

• a non-indigenous company that intends to provide goods or services to a contractor, a subcontractor, licensee, the Ghana National Petroleum Corporation ("GNPC") or other allied entity within the country must, unless otherwise directed by the Petroleum Commission, incorporate a joint venture with an indigenous company and afford that company at least a 10% equity participation;
• an indigenous Ghanaian company is to be given preference in the grant of a petroleum agreement or a license. It is also a condition that there must be, at least, a 5% equity participation of an indigenous Ghanaian company (other than the GNPC, which is a party to all petroleum agreements) to qualify to enter into a petroleum license or petroleum agreement. The Minister of Energy may vary this requirement in cases where an indigenous Ghanaian company is unable to satisfy the requirement of the 5% equity participation;
• the interest of an indigenous Ghanaian company arising from a petroleum agreement or a petroleum license is not transferable to a non-indigenous Ghanaian company; and
• an indigenous Ghanaian company must have 100% of its equity owned by a citizen of Ghana, and (b) has Ghanaian citizens holding at least 80% of executive and senior management positions and 100% of non-managerial and other positions.

For the various sectors in the electricity supply chain, initial equity requirements range from 15% to 80% and ultimate equity targets (range from 51% in ten years to 100% in five years). For instance, a company that intends to engage in wholesale power supply activities is required to have initial local equity participation of at least 15% by a Ghanaian partner which must be progressively increased to at least 51% within a period of ten years.

In the fisheries sector, at least 50% of all tuna fishing vessels must be owned by Ghanaian citizens, the Ghanaian government, a public corporation or a limited liability company.

In the gaming sector, a person must incorporate a limited liability company and obtain a license from the Gaming Commission to operate a specified game of chance. The applicant company must either be wholly owned by a Ghanaian or have not less than 10% Ghanaian shareholding.

Yes, a company with foreign participation must register with the Ghana Investment Promotion Centre ("GIPC") after incorporation and before the commencement of business.

No, approval of the GIPC is not required prior to closing. However, all companies with foreign investment must register with the GIPC after incorporation or registration and before the commencement of operations as part of their post-closing activities. The GIPC ensures that all relevant documents for registration are in order, the minimum foreign equity capital requirement has been met and all required fees have been paid before completing the registration process.

In transactions involving investments or acquisitions in sectors with specific local equity participation requirements, these requirements must be satisfied before approval can be obtained from the sector regulator for the transaction.

The COVID-19 pandemic affected foreign direct investment (“FDI”) globally. For Ghana, the GIPC 2021 4th Quarter Investment Report shows that at the end of 2021, the country recorded 271 projects with a total FDI value of USD 1.3 billion, indicating a decrease of 51% over the 2020 FDI results but an increase of 17% over the 2019 FDI results. The year 2022 however ended with encouraging FDI values. The GIPC 2022 4th Quarter Investment Report indicates that, Ghana recorded an encouraging total FDI value of USD1.35 billion, representing an increase of 4.22% over the recorded value for 2021. 

The GIPC reviews foreign investment registration applications to ensure that investments reserved for local industries are not engaged by foreigners. In the past, the GIPC has blocked foreign investments from engaging in business activities that have been reserved for local businesses. The Ghana Union Traders Association ("GUTA") has also expressed concern about the inability of the Government of Ghana to enforce the laws on foreign businesses in Ghana and have been embarking on exercises to close down foreign-owned retail shops which are reserved for Ghanaians. For instance, in 2021, the GUTA at Kasoa in the Central Region of Ghana, threatened to close down foreign-owned retail shops due to the collapse of their businesses. It also locked up over 40 foreign-owned retail shops in Koforidua, Eastern Region and recently served notice of extending this exercise to all towns in the Eastern Region. In November 2023, traders at UTC in the central business district of Accra, closed their shops to protest against the increasing engagement by foreigners in retail business.

Foreign direct investments that are illegal or fall outside the scope of the permitted businesses under the GIPC Act will not be approved by the GIPC. The GIPC will not register any foreign investment that breaches these requirements. Such companies cannot commence business. Further, sector-specific regulatory agencies will not approve transactions that breach local equity participation requirements. During the COVID-19 pandemic, the GIPC was not very active in its enforcement. However, post COVID-19, the GIPC and Government have been active. For instance, the former Minister for Trade and Industry, Alan Kyeremanten, revealed that, to avoid further breaches of the GIPC Act, there have been several consultations with ECOWAS countries for foreign nationals to respect Ghana’s laws on retail trading. Also, the GIPC announced that the issue of foreigners owning retail shops is being handled in Parliament by the joint Committee on Trade, Industry and Tourism, Defense and Interior.

Discussions are ongoing to amend the current GIPC Act. Potential changes include the review of the minimum foreign equity capital requirements and the introduction of punitive fines for investors who engage in business activities that are restricted for Ghanaian citizens and Ghanaian-owned enterprises.