4 benefits companies enjoy when expanding to Ghana

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Located in West Africa and bordered by Togo, Burkina Faso and the Ivory Coast, Ghana is a thriving nation with a stable democracy and is considered one of Africa’s fastest-growing economies. Rich in natural resources such as gold, diamonds, manganese, and oil, the country is also the second-largest chocolate producer in Africa. Ghana has grown strong over the years, diversifying its economy to avoid dependence on non-renewable sources.

 

Aside from its natural resources, the country is also open to Foreign Direct Investment (FDI), with its main investors being Australia, China, the Netherlands, South Africa, and the UK. The country’s eagerness to welcome other foreign investment is also evident in the fact that it provides numerous tax rebates, tax holidays, and tax exemptions to foreign businesses.

 

The benefits of expanding to Ghana do not stop here either, as the country offers other incentives to foreign companies looking to expand their activities to Ghanian shores.

Tax rebates, tax holidays & tax exemptions for foreign companies

Ghana is a welcoming country to investors, who benefit from extremely favorable tax laws, allowing them to set up and develop their foreign subsidiaries with more ease. For instance, companies engaging in “non-traditional exports” are eligible for a reduced corporate tax rate of 8%, as opposed to the general corporate tax rate, which is set at 25%. On the other hand, financial institutions must only pay a 20% rate on profits from loans made to farming operations and leasing businesses.
Activity Rate%
Income of a Trust 25
Company principally engaged in the hotel industry 22
Company engaged in the export of non-traditional exports 8
Financial institutions from loans granted to farming enterprises 20
Financial institutions from loans granted to a leasing company 20
Manufacturing companies located in regional capitals (except Accra & Tema) 18.5
Manufacturing companies located outside Accra, Tema and the regional capitals 12.5
Free Zone Enterprises after 10 years tax holiday (on domestic sales) 25
Free Zone Enterprises after 10 years tax holiday (on export of goods and services) 15
Petroleum income tax 35
Mineral income tax 35
Besides, companies operating in free trade zones (FTZs) enjoy a hugely advantageous, decade-long exemption before they need to pay a 15% corporate tax on export sales. Additionally, manufacturing businesses outside of Accra, the capital, and Tema – a city housing Ghana’s largest seaport – are given a rebate. It is 75% of the ordinary corporation tax rate of 25% in regional capitals (apart from Accra and Tema), and 50% of the usual tax rate in all other locations. Furthermore, Ghana has established double taxation treaties with 12 countries across the world, including: Belgium, Italy, Switzerland, the Czech Republic, Mauritius, the United Kingdom, Denmark, the Netherlands, France, Singapore, Germany and South Africa.

Abundant Resources

Ghana is nothing if not rich in natural resources. Gold, diamonds, oil, gas, timber, cocoa, bauxite, manganese, and silver… All these raw materials can be sourced in the country, providing great opportunities for business and investment.

 

Since Ghana has diversified its economy, it also has several other industries that make for lucrative investments, notably the real estate industry, the financial services sector and the manufacturing sector.

Excellent Media & Advertisement Opportunities

Ghanaian media can be a powerful tool for companies to use, especially for advertising purposes. The media in Ghana comprises numerous lively television and radio stations, newspapers, and other media outlets which engage local and foreign audiences in conversations about all facets of the nation.

 

Additionally, Ghana is regarded as a reference in West Africa as it houses many internationally recognized ICT companies. As a result, Ghana’s media offers a favourable environment for businesses to flourish.

 

Highly-trained workforce

Education is central to development in Ghana. From 2017 to 2020, the Ghanaian government doubled the public education budget, going from $2 billion to almost $4 billion.

 

As long as education is given such a share of the government’s annual spending, Ghana’s educational institutions will continue to grow in number and quality, attracting tertiary students from not just Ghana but also from all over West Africa. This allows companies in Ghana access to a sizable pool of highly qualified graduates and students who pass through the country’s educational system.

 

Additionally, English is Ghana’s official language, with many Ghanaians also speaking a few other indigenous languages. This English language proficiency will prove beneficial for businesses, especially ones with international clients.

 

However, one issue businesses may run into as they set up their own entity is compliance with local law. This includes employee hiring practices, employee benefits, payroll systems, and tax remittance among others. All these aspects of having a labour force may weigh on businesses as they try to grow in a new market. Not to mention that failure to comply with the law carries serious sanctions.

 

Companies may avoid any such risks by partnering with a PEO (Professional Employer Organisation) if they already have an entity in Ghana. This third party will enter into a joint-employment agreement with the company in question, assisting with hiring, payroll, benefit administration, compliance and human resources. This agreement allows companies to put all their focus on their business growth rather than on daily operations and maintenance.

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How Africa HR Solutions can help with your business expansion to Ghana

Expanding to another country and exploring new markets is a challenging task, even when it is to a country as stable and receptive to investment as Ghana. Africa HR Solutions’ PEO (Professional Employer Organization) offer is perfect for businesses that already have a local subsidiary in Ghana.

But for those companies that are only now considering entering the Ghanaian market, an EOR (Employer of Record) may just be the ideal solution. EORs allow companies to operate in a foreign country without a local entity – helping them to save time and money by avoiding complex legal procedures. EORs also take on the responsibility of payroll, human resources, hiring, tax remittances and compliance with local law.

Thanks to our many local experts in Ghana, we are able to ensure a dedicated service to our clients, one that is sensitive to local traditions and customs and that fully complies with local regulatory frameworks.

Seize every business opportunity in Ghana. Go with the expert.

Teaming with Africa HR Solutions as your Employer of Record partner enables an easy and compliant expansion in Ghana.
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GRANT GERAGHTY - Africa HR Team

GRANT GERAGHTY

HEAD OF CLIENT RELATIONSHIP

Grant Geraghty is the longest-serving member of the Africa HR team. This resident subject matter expert and client champion is responsible for gaining a deep understanding of our clients’ unique HR needs in Africa and providing tailored solutions that align with their business objectives. Grant collaborates closely with our clients to ensure that their requirements are properly implemented, providing ongoing support and guidance throughout the process.

Grant brings a wealth of experience to his role, having served as Africa HR’s longest-serving employee. He holds a Bachelor of Commerce degree, with a major in Economics and Business Finance, from the University of Natal in South Africa. Additionally, he has completed a certification program in Payroll and Tax Administration from the University of Cape Town, further enhancing his expertise in HR operations and compliance.

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KEVINA TAKOORDYAL Africa HR Team

KEVINA TAKOORDYAL

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Kevina Takoordyal has a BA Hons Business Management from the University of Glamorgan, UK, with MBA in leadership and Innovation, MBA General, PMP Certified, and Agile Scrum Master. She currently works as the Head of Operations at Africa HR Solutions Ltd with more than 20 years of proven leadership capabilities in Operations, Business Development, People Management, Process Optimization, and Project Management in the Financial Services, BPO, Banking Industry, and Heath Care Industry. In Senior leadership roles with an international footprint across Europe working and extensive Pan- African experience from a compliance, finance, and operations angle, Kevina comes across with a panoply of cross-functional skills. Kevina also serves on a few Boards, Non-Independent Executive at MioD and for NGOs on a voluntary basis, a coach and mentor to aspiring female leaders across Africa and Mauritius.

Kevina is a firm believer in Servant Leadership with a strong focus and commitment to uplifting others, with the ability to deliver through a highly engaged – diverse team, and works towards consistently synergistic value creation. While being a focused and adaptive thinker and Kevina is actively participating in panel discussions on Innovation, CX, Digital transformation.

Kevina serves as Project Assessor for the National Youth upskilling program. She has been recognized as Global Talent in a few companies, Ceridian, and International SOS Ltd whereby she has been awarded a few scholarships and had the opportunity to be mentored by Senior Vice President in the US. Award Winner in various fields and at a national level and recognized including Super Achiever Leader Award in Africa in 2016, Awarded Africa Women Leader 2018.

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In her current role, Viloshna leads the company’s Treasury and Payments function, including the fulfillment of the company’s cross-border payments into Africa. With her strong educational background and extensive experience, Viloshna consistently demonstrates her ability to optimize financial operations, minimize risks, and improve profitability. Her expertise in financial reporting and process improvements make her a valuable asset to any organization.

MARK DU PREEZ​

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A qualified lawyer who joined Africa HR Solutions in July 2020, Mark Du Preez has experience working in private practice for a reputable law firm in South Africa. He also played commercially focused roles at a leading private bank, wealth management company, and outsourcing firm in South Africa and Mauritius.

Mark has played a pivotal role in Africa HR Solution’s risk mitigation strategy, which positively impacted P&L performance over the years.

He currently leads the Partnerships function of the company including relationships and oversight with in-country partners (ICPs) across Africa.

Alex Daruty - Africa HR Team

ALEX DARUTY

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Alex has more than 15 years of experience in the global, strategic development of both enterprise and consumer brands in categories including technology, transport, enterprise software, entertainment, and travel.

With experience in roles on both agency and corporate side, he has worked across international brands and has led the development and execution of multi-discipline campaigns across EMEA, NORAM and Asia Pacific.

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