All enterprises in the country with foreign participation are required to register with the Ghana Investment Promotion Centre (GIPC).
This is a departure from the previous regime when enterprises, wholly owned or with foreign investor interest, had no obligation to register with the GIPC unless they wanted to access incentives.
Under the new GIPC Act, 2013 (Act 865), the minimum capital required for retail business had also moved from US$10,000 to $1 million, while foreign investors who participate in enterprises have to show a minimum capital of $200,000 with wholly owned foreign enterprises showing a minimum capital of $500,000.
The Director of Research and Investment Development at the GIPC, Mr Kofi Antiri, who explained the new requirements in Accra, added that the amendment to the act was to make it reflect changing trends and also to attract more foreign direct investment into the country.
Mr Antiri was speaking at a forum organised by the Delegation of German Industry and Commerce in Ghana (AHK Ghana) on how to attract foreign direct investment (FDI) with the new GIPC Act and its consequences for both local and foreign investors.
AHK promotes German businesses in Ghana and West Africa and also provides market information about Ghana for German and European businesses. A panel discussion made up of foreign investors and experts in the field of compliance and investor relations followed the main presentations.
Mr Antiri said the registration of all companies with the GIPC was in line with its new mandate to keep record of all businesses and monitor FDIs’ performance in the economy. Companies registered with the investment centre are also expected to renew their registration every two years. Consequently, the GIPC has set up a new tracking and monitoring unit to keep track of all investments in the country.
Last year, the GIPC attracted $4.2 billion worth of FDIs against $5.6 billion investments the previous year. The centre attributes the decline to a trend that happens every election year as investors adopt wait and see attitudes. The investment promotion centre is hoping to improve the feat this year with about 20 per cent positive variance over the 2013 figure.
The Head of Research further explained that the minimum capital requirement for the FDIs could be in cash or equivalent and investors didn’t have to pay it to the government but they could do so into the company’s account and show proof of that.
The Deputy Minister of Trade and Industry, Nii Lantey Vanderpuye, said the new act also had features to ensure that investors did not encounter any impediments in their bid to establish businesses if they had the requisite documents.
“As a country we want to harness our competitive advantage by diversifying the economy with agro-processing and fruit processing; this is where we will be counting on our partners such as the Germans,” the deputy trade minister said.
He added that with the economic transformation agenda, the government would throw its weight behind any investor who wanted to go into the prioritised industries for import substitution, saying “we want to ensure that bureaucracies are eliminated as they do not make our investment climate congenial.”
However, the Chief Executive of the Ghana Netherlands Chamber of Commerce and Culture (GHANECC), Mr Nico van Staalduinen, was frustrated that after encouraging foreign investors to set up in the country, other laws make it challenging to operate.
He was of the view that the minimum capital required for foreign investors were too high to attract small family businesses from the developed world and coupled with provisions such as quotas for hiring foreign workers that amounted to Ghana missing the opportunity to make itself the leading destination for FDI inflows.