By Cephas Tettey OMENYO – cephas.omenyo@ap-ghana.com, Charlotte Serwaa OWUSU, and ALEXANDER & PARTNER GHANA PRUC
The Ghana Investment Promotion Centre Act, 2013 (Act 865) established the Ghana Investment Promotion Centre (GIPC) as a statutory body with a mandate primarily focused on encouraging and attracting inward foreign investment. The Act comprised 45 sections, operating largely as a facilitative instrument for inward foreign investment.
The 2025 Bill represents a structural departure from this model. It replaces the Centre with the Ghana Investment Promotion Authority (GIPA), an institution of upgraded statutory status and expands the mandate to encompass outward investment and Ghana’s obligations as a focal point under the African Continental Free Trade Area (AfCFTA) framework. The Bill extends to 61 sections and introduces obligations, mechanisms, and incentive structures that have no equivalent in the existing Act.
The Overarching Philosophy Shift
The most significant development in the 2025 Bill is not any single clause but rather a philosophical recalibration of the relationship between the Ghana and foreign investors. Act 865 was, at its core, a promotional statute: its primary instinct was to attract foreign capital through guarantees and a broadly permissive operating environment.
The 2025 Bill retains all of those guarantees but superimposes a reciprocal obligations framework. For the first time under Ghanaian investment legislation, investors will be held to mandatory standards on human rights compliance, environmental stewardship, gender equality, corporate social responsibility, and local talent development.
This is a deliberate policy signal that Ghana is aligning its domestic investment law with prevailing international ESG norms, a development driven in material part by Ghana’s AfCFTA obligations and its engagement with multilateral development frameworks.
Key Changes of Commercial Significance
Minimum Capital Thresholds
The biggest barrier to foreign investment over the years under the Act 865 had been the minimum equity requirements. Under the Bill, for a wholly foreign-owned trading enterprise, the minimum equity has seen a fifty percent reduction from USD 1,000,000 to a minimum of USD 500,000.
This is a significant concession aimed at improving Ghana’s competitiveness within the West African sub-region and broadening the pool of qualifying investors. The condition that the enterprise employs a minimum number of skilled Ghanaian workers is retained but has been restructured: whereas Act 865 prescribed a fixed minimum of 20 skilled Ghanaian employees, the Bill imposes a condition that a minimum of 75% of the skilled workforce must be Ghanaian nationals.
Beyond this, there is no minimum equity requirement but rather any necessary requirements have been left to various sectors and condition-based thresholds that will require case-by-case assessment per particular industries and business activities or operations.
Reserved Activities
The Bill retains the concept of activities reserved exclusively for Ghanaian nationals, reducing the reserved categories from eight under Act 865 to six categories. Lotteries have been removed from the reserved list. Importantly, the Bill introduces explicit penalties for fronting arrangements that is, the use of a Ghanaian nominee to circumvent foreign investor restrictions which reflects a tightening of enforcement posture in this area.
Tax Incentives
Act 865 contains no dedicated tax incentive provisions. Investors were required to cross-reference the Act with multiple revenue statutes to identify applicable incentives, creating both uncertainty and inconsistency in practice.
The 2025 Bill addresses this directly by incorporating dedicated industry-specific and strategic investment tax incentive clauses at Clauses 35 and 36, establishing a clearer and more predictable pathway to tax benefits within a single statutory instrument. This will be of particular practical value to investors in designated strategic sectors.
Provisions Requiring Careful Legal Attention
Technology Transfer Agreements
Under the 2025 Bill, fees paid under an unregistered agreement cannot be claimed as tax deductions. The agreements are now specifically subject to a 5-year validity period.
4.2 Expatriate Quota System
Under Act 865, an investor’s entitlement to expatriate quotas was automatic, determined by reference to the size of the capital investment, and ranged from one to four persons. The scale of permissible expatriate employees has been substantially increased from a maximum of four to up to twelve persons for investments of USD 10 million and above but the condition precedent is stringent; 90% of the direct skilled workforce must be Ghanaian nationals.
Penalties and Enforcement
Penalties under the Bill are more stringent. Whereas Act 865 prescribed penalty units in the range of 500 to 1,000, the Bill provides penalties of 2,000 to 10,000 penalty units. More significantly, the Bill introduces a separate administrative penalty regime that operates independently of criminal prosecution, meaning that an investor may face both administrative sanctions and criminal prosecution for the same contravention. The increased enforcement architecture is consistent with the Bill’s broader shift towards a more conforming regulatory environment.
Enhanced Investor Protections
Investor Grievance Mechanism
Another novel and much needed practically valuable addition to the Bill is the formalized investor grievance mechanism established under Clause 43. Under Act 865, an investor whose operations were obstructed by a government agency had primary recourse to the GIPC Board, with ultimate appeal to the High Court, a process that was commercially costly and protracted.
The 2025 Bill mandates the establishment of a dedicated grievance office within the Authority. Grievances must be acknowledged within five days of receipt, with resolution facilitated within three months.
The Authority is required to submit quarterly reports on grievances and their resolution to the President. This mechanism substantially improves the practical utility of the investor protection framework and creates a degree of executive accountability that did not previously exist.
Protection Against Expropriation
The prohibition on nationalization without compensation and the investor’s right to access the courts in the event of expropriation are both retained from Act 865. The Bill adds a procedural enhancement: in the event of expropriation claims, the Attorney-General is mandated to defend such claims on behalf of the state, providing investors with greater certainty as to the institutional counterpart in any such proceedings.
Novel Provisions
Citizenship by Investment
Clause 37 is entirely novel. It mandates the Ministry of the Interior to enact subsidiary legislation specifying the categories of investors eligible for Ghanaian citizenship, with qualifying investment in designated sectors as the primary criterion. The detailed eligibility conditions and sector designations are yet to be legislated.
ESG and CSR Obligations
The Bill introduces, for the first time, mandatory obligations on investors in respect of environmental, social, and governance compliance; corporate social responsibility; human rights; and local content and participation.
These are not aspirational provisions: they carry the enforcement consequences described in section 5.3 above. Investors will need to incorporate these obligations into their operational frameworks and governance structures and should seek advice on the specific standards to be applied as implementing regulations are published.
Composition of the Board
A comparison of the composition of the Board in both legislations shows that the GIPA Board adopts a broader, more institutionally integrated structure, while the GIPC Board is comparatively leaner and more streamlined.
The Board of the Authority includes a wider range of state actors. In addition to the Bank of Ghana and the National Development Planning Commission (common to both), the GIPA Bill explicitly incorporates the Ghana Revenue Authority and Foreign Affairs Ministry, which are absent in the GIPC Act. This signals a deliberate policy choice to embed tax oversight and international investment coordination directly into governance.
Duties & Liabilities of Members of the Board
Section 7 of the Bill introduces a comprehensive fiduciary and accountability framework for members of the Board. It clarifies that Board members stand in a fiduciary relationship with the Authority and are therefore bound to act in good faith, with loyalty, and in the best interests of the institution.
Beyond this general obligation, the provision codifies specific duties, including the requirement to act honestly, exercise reasonable care and diligence, avoid conflicts between personal and institutional interests, and refrain from misusing confidential information or their official position for personal advantage.
Importantly, the section attaches enforceable consequences: a breach attracts financial penalties, and where loss or damage is occasioned to the Authority, the court is empowered to order compensation. This addition strengthens governance standards within the Authority.
Legal Continuity
Clauses 60 and 61 of the Bill contain transitional provisions that are materially investor friendly. All existing registrations, technology transfer agreements, and expatriate quotas in force under Act 865 are preserved and deemed valid under the new Authority. There is no requirement to re-register or re-apply. This continuity provision significantly reduces the administrative burden on existing investors at the point of transition.
Conclusion and Recommended Next Steps
The 2025 Bill represents a regulatory maturation of Ghana’s investment law framework. It is more structured, more enforceable, and more demanding of investors than its predecessor, but it is also more protective in the safeguards it provides and better resourced in the institutional support it offers.
The net assessment, from a foreign investor’s perspective, is broadly positive, provided that existing operations are brought into compliance with the new requirements in a timely and structured manner.
The following recommended steps should be taken by existing investors before the Bill receives Presidential assent:
- Conduct a compliance audit of all existing technology transfer or licensing agreements with Ghanaian counterparties to identify unregistered arrangements, and initiate registration proceedings with the Centre under Act 865 in advance of transition.
- Review current workforce composition against the 90% skilled Ghanaian employee condition to assess whether existing or planned expatriate quota reliance can be sustained under the new application-based regime.
- Map existing operational practices against the Bill’s ESG, CSR, and human rights obligations and identify areas requiring policy or structural adjustment.
- Monitor the development of implementing regulations under Clause 37 (citizenship by investment) if long-term or permanent establishment in Ghana is contemplated.
- Engage Ghanaian legal counsel with investment law expertise to advise on sector-specific capital thresholds applicable to any joint venture structures under consideration.
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