ESTABLISHMENT OF A FREE ZONE ENTERPRISE

An investor may also apply for a licence to establish a free zone enterprise. This is only available to companies and private partnerships incorporated in Ghana.

a. Production

A free zone enterprise is permitted to produce any type of goods and services for export, with the exception of environmentally hazardous goods. Subject to obtaining the prior approval of the Free Zones Board, an enterprise may change its production lines and processes as often as it considers necessary.

b. Sales within Ghana

A free zone or a single-factory enterprise is allowed to sell up to 30% of its annual production of goods and services in Ghana. But such sales will be considered as imports and be subject to the rules and regulations relating to imports into Ghana, such as the payment of import-related taxes and duties. The enterprise may also sell its damaged or rejected goods (or samples) in Ghana, as part of the 30% quota.

c. Tax Concessions

Free zone enterprises are eligible for the following tax concessions:

1. 10-year income tax holiday from the date of commencement of operations,
2. 8% post-holiday income tax,
3. Tax and duty exemption on imports, and
4. Shareholder exemption from withholding taxes on dividends.

d. Application of Import and Export Laws

The laws relating to the import and export of goods and services (other than consumer goods for commercial purposes) do not apply to

1. bringing goods directly into a free zone from a country outside Ghana, and
2. dispatching goods for export out of a free zone to a country outside Ghana, except such laws are made specifically applicable by regulations made under law.

e. Equity contribution of investors

A foreign investor is permitted to own all the shares in any free zone enterprise. However, a domestic investor is permitted to own all the shares in an export free zone enterprise. Apart from this, foreign and domestic investors have equal status within the export free zones.

f. Investment Guarantees

Just like GIPC-registered enterprises, Free zone enterprises are guaranteed transferability through any authorised dealer bank in freely convertible currency of the following:

1. dividends or net profits attributable to the investment,
2. payments in respect of loan servicing where a foreign loan has been obtained,
3. fees and charges in respect of any technology transfer agreement registered with the GIPC, and
4. proceeds (net of all taxes and other obligations) in the event of sale or liquidation of the enterprise, or any interest attributable to the investment

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A free zone enterprise is permitted to operate a foreign currency account with banks in Ghana, subject to the conditions that may set out in its licence.

h. Expatriate Employee Income Tax

Foreign employees in the free zones are required to pay the appropriate employee income taxes, subject to the terms of any double tax treaties that may exist between Ghana and their home countries.

i. Work, residence and entry permits

An enterprise is permitted to employ expatriates, if it can show that the skills that such expatriates possess are not available in Ghana. The enterprise is required to obtain work permits and resident permits for such employees. The application for the permits must be accompanied by a medical certificate on the state of health of the prospective employee to the Free Zones Board, at least two months before the proposed date of employment. If the application is accepted, the Board will forward it to the Ghana Immigration Service for processing, which will issue a resident permit for a period not exceeding two years at any one time.

j. Entry Visa

A foreign investor or employee in a free zone may obtain an entry visa from a Ghana mission abroad or its accredited representative, or on arrival at a point of entry in Ghana if the Director of the Immigration Service, has prior notification from the Free Zones Board concerning the arrival of the investor or employee.

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