TaxLawGHby MSL Business School
MSL Business SchoolInvestment, incentives and compliance under Act 1173
Ghana Investment Promotion Authority Act, 2026
Understand Ghana's new foreign-capital, annual-registration, incentive, technology-transfer, expatriate-quota and enforcement framework.
Published by MSL Business School.
MSL Business School — Act 1173 at a glance
Controlling answer
Act 1173 changes market-entry and investment-compliance rules, but it does not replace the tax laws.
The Act removes the former general foreign-capital thresholds for non-trading enterprises, introduces annual registration, creates new incentive gateways and makes technology-transfer registration a direct tax and remittance control. Every tax result must still be traced through the applicable tax law, the Exemptions Act and any required approval.
Act 865 compared with Act 1173
The new framework changes capital, renewal, incentives, expatriate quotas and enforcement.
| Subject | Position under repealed Act 865 | Position under Act 1173 |
|---|---|---|
| Institution | Ghana Investment Promotion Centre | Ghana Investment Promotion Authority |
| Non-trading joint venture | US$200,000 foreign capital and at least 10% Ghanaian equity | The former general minimum is not restated |
| Wholly foreign-owned non-trading enterprise | US$500,000 foreign capital | The former general minimum is not restated |
| Foreign trading enterprise | US$1 million and at least 20 skilled Ghanaian employees | US$500,000 in cash as equity and at least 75% of employees must be skilled Ghanaians |
| Registration renewal | Every two years for an enterprise with foreign participation | Every year for foreign-owned enterprises and registered wholly Ghanaian-owned enterprises |
| Technology-transfer agreement | Registration required; duration governed by the saved Regulations | Five-year validity, five-year renewal cycle, bank-document rule, non-deductibility and unenforceability for non-registration |
| Expatriate quotas | One to four automatic quotas across the statutory capital bands | Two to twelve quotas across six capital bands, valid for five years and renewable |
| Enforcement | General criminal penalty and regulatory sanctions | Tiered offences, administrative penalties, benefit restrictions, civil-debt recovery and annual compliance review |
Entry and admission
The statutory minimum now centres on foreign participation in trading.
A non-citizen may engage in a trading enterprise by investing at least US$500,000 in cash as equity and ensuring that at least 75% of the enterprise's employees are skilled Ghanaians. The portfolio-investment exclusion remains. “Trading enterprise” includes purchasing and reselling goods as a principal activity or a material component of operations.
Other requirements remain: removal of the former general Act 865 thresholds does not remove company incorporation, sector licensing, beneficial-ownership, immigration, tax-registration, local-content or other statutory requirements.
Activities reserved for Ghanaians
Foreign participation remains prohibited in market trading and hawking; beauty salons and barbering shops; taxi or car-hire operations with fewer than twenty-five vehicles; production of exercise books and basic stationery; retail of finished pharmaceutical products; and production, supply and retail of sachet water.
Section 35(3) requires care: it refers to a “wholly Ghanaian owned” enterprise with a non-Ghanaian beneficial owner or director and directs that enterprise to satisfy section 31. An enterprise affected by that wording should obtain the Authority's current interpretation before relying on the absence of a minimum capital requirement.
Registration lifecycle
Registration is annual and directly connected to access to benefits.
- 01Incorporate or register the enterprise
Complete establishment under the Companies Act or other applicable legislation.
- 02Register before operations begin
An enterprise with foreign ownership must register with the Authority after incorporation and before commencing operations.
- 03Renew every year
The annual renewal requirement applies to foreign-owned enterprises and to wholly Ghanaian-owned enterprises that elect to register.
- 04Keep other registrations current
Registration with the Authority does not replace registration with GRA, the Office of the Registrar of Companies or a sector regulator.
- 05Use benefits only for their approved purpose
Misapplication can trigger administrative penalties, recovery of taxes or duties and revocation of incentives.
- 06Obtain approval before opening a branch
A registered enterprise must apply in writing before establishing a branch or operating at another branch location.
Sections 37 and 38
The Act creates incentive pathways, not an automatic exemption.
Subject to Act 1083, the Minister for Finance may, in consultation with the Authority, make Regulations granting an industry-specific or programme-specific tax incentive.
Cabinet determines priority areas. The Authority must publish the areas and criteria in the Gazette, on its website and in a nationwide daily newspaper.
An investor in a priority area may apply with the investment cost details and exemptions requested.
The Authority determines whether the proposed investment falls within a priority area and communicates its decision within thirty days.
No self-executing relief: a sector announcement, priority-area designation or favourable Authority decision does not by itself remove a tax. The Exemptions Act, the charging law, the required legislative instrument and project-specific approvals must all be tested.
Cross-border payments
Registration, tax and foreign-exchange controls must all be satisfied.
A registered enterprise is guaranteed transferability through a licensed dealer of dividends or net profits, foreign-loan servicing payments, fees under a registered technology-transfer agreement and net sale or liquidation proceeds. The guarantee remains subject to the Foreign Exchange Act and other applicable legislation, and sale or liquidation proceeds are remitted net of taxes and other obligations.
The agreement must be registered. The bank requires the registration certificate and an Authority-certified copy of the agreement.
Fees and charges under an unregistered agreement are expressly non-deductible under Act 896.
The Ghana payer must separately classify the payment and apply the applicable domestic or approved treaty rate.
A controlled transaction remains subject to the arm's-length standard and the documentation or valid election requirements under L.I. 2412.
Compliance and enforcement
The Authority can review information, premises, incentives and remittances.
The Authority must maintain a national investment registry and reporting system covering investment performance, annual compliance reviews and investment surveys. An enterprise must provide requested information and permit an identified officer or agent to enter its premises at a reasonable time for monitoring.
| Contravention | Administrative consequence under section 56 |
|---|---|
| Failure to renew registration | 7,000 penalty units, plus 200 to 500 penalty units for each month of continuing non-renewal |
| Using a benefit or incentive for another purpose | 5,000 to 10,000 penalty units, plus 100 to 200 penalty units for each continuing month |
| Foreign participation in a reserved activity | 5,000 to 10,000 penalty units, plus 500 to 1,000 penalty units for each continuing month |
| Transfer under an unregistered or inconsistent technology-transfer agreement | 10,000 to 20,000 penalty units, plus 1,000 to 2,000 penalty units for each continuing month |
| Unapproved branch or location | 3,000 to 5,000 penalty units, plus 500 to 1,000 penalty units for each continuing month |
Additional measures: the Authority may support recovery of fees, taxes, duties and charges, revoke incentives, advise suspension of remittances, restrict access to benefits or services and recover unpaid administrative penalties as civil debt.
Repeal, savings and transition
Existing registrations and approvals do not disappear on repeal.
An enterprise registered under Act 865 continues as registered under Act 1173, subject to the new framework.
Applicable pre-commencement benefits and incentives continue alongside benefits applicable under the new Act.
An application pending before the former Centre is treated as pending before the Authority.
An existing quota or work permit continues until it expires or is renewed under Act 1173.
An agreement registered before commencement is deemed registered with the Authority.
The Technology Transfer Regulations, 1992 are expressly saved and continue subject to the new Act.
Renewal matters: continuity does not remove the new annual enterprise-renewal rule or the five-year statutory treatment of technology-transfer registrations when the relevant renewal point is reached.
Frequently asked questions
Ghana Investment Promotion Authority Act questions
What is the minimum foreign capital requirement under Act 1173?
Act 1173 states a US$500,000 cash equity requirement for a non-citizen engaging in a trading enterprise. It does not state the former general US$200,000 joint-venture or US$500,000 wholly foreign-owned minimums for non-trading enterprises. Other sector, licensing and capital rules may still apply.
How often must an enterprise renew its registration with the Authority?
An enterprise with foreign ownership must renew annually. A wholly Ghanaian-owned enterprise may register voluntarily, but once registered it must also renew annually.
Does Act 1173 itself grant a new tax holiday?
No. Section 37 permits industry-specific or programme-specific incentives to be made by legislative instrument, and section 38 provides the entry process for strategic-investment incentives. The applicable tax law, Exemptions Act and required approvals still control the benefit.
Can an unregistered enterprise use an incentive under Act 1173?
No. A foreign-owned enterprise that fails to register or renew cannot apply a benefit or incentive under the Act. A registered wholly Ghanaian-owned enterprise is also subject to the annual renewal and proper-use requirements.
What happens to registrations and incentives granted under Act 865?
Existing registrations continue as registrations under Act 1173. Subject to the transitional provisions, existing enterprises continue to enjoy applicable pre-commencement benefits and incentives in addition to benefits available under the new Act.
Does Act 1173 change technology-transfer tax treatment?
Yes. Fees under an unregistered technology-transfer agreement are expressly non-deductible, the agreement is unenforceable, and a licensed bank requires the registration certificate and an Authority-certified agreement before remitting fees abroad.
Is the investor grievance mechanism a substitute for a tax objection?
No. A taxpayer should continue to observe every assessment, objection, appeal and payment deadline under the tax legislation. The Act excludes matters already subject to a court process or another formal government resolution process from the grievance mechanism.
MSL Business School legal reference map
Primary authority and connected legislation
- Ghana Investment Promotion Authority Act, 2026 (Act 1173)Assented to and gazetted on 15 July 2026; principal investment-promotion, registration, incentive, technology-transfer and enforcement framework.
- Exemptions Act, 2022 (Act 1083), as amendedGeneral and strategic incentive approval, monitoring and enforcement framework.
- Technology Transfer Regulations, 1992 (L.I. 1547)Contract, registration, clause, training and fee rules expressly saved by Act 1173.
- Transfer Pricing Regulations, 2020 (L.I. 2412)Arm's-length, documentation and registered-TTA election rules for controlled relationships.
- Foreign Exchange Act, 2006 (Act 723)Licensed-dealer and international-payment framework.
- Official GIPA legislation announcementOfficial account of the principal reforms when Parliament passed the legislation.
Institutional publisher
TaxLawGH is MSL Business School's Ghana tax education platform.
MSL Business School publishes TaxLawGH to make Ghana's tax law accurate, understandable and useful to taxpayers, businesses, practitioners, students and policy professionals.
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