Minimum capital requirement scrapped, but foreign traders must bring $500k

Ghana has introduced sweeping reforms to its investment laws after President John Dramani Mahama assented to the new Ghana Investment Promotion Centre (GIPC) Act, removing the minimum capital requirement for foreign investors seeking to establish businesses in most sectors of the economy.

The landmark legislation is expected to significantly improve Ghana's competitiveness as an investment destination by reducing barriers to entry for foreign businesses while strengthening the country's investment promotion and regulatory framework.

Under the new law, foreign investors will no longer be required to meet minimum capital thresholds before registering businesses in most sectors. However, the trading sector remains an exception, with stricter rules now requiring foreign-owned trading enterprises to inject US$500,000 in cash instead of meeting the requirement through imported goods as permitted under the previous law.

Chief Executive Officer of the Ghana Investment Promotion Centre (GIPC), Simon Madjie, described the amendment as one of the most significant changes in Ghana's investment regime, saying it directly addresses concerns that have been raised by international investors for several years.

According to him, the removal of the minimum capital requirement is intended to make Ghana a more attractive destination for foreign direct investment (FDI), encourage business expansion, and improve the ease of doing business.

"For investors who've been complaining about the minimum capital requirement, that has been eliminated by the passage of the new law," Mr. Madjie explained.

He clarified that only foreign investors operating in the trading sector will continue to be subject to a capital requirement, which must now be paid entirely in cash.

"Those in a trading enterprise must now bring in a cash amount of US$500,000. No longer through imported goods, but a cash amount of US$500,000," he stated.

Beyond easing investment requirements, the new legislation introduces a National Investment Registry, which will serve as a comprehensive database for recording and monitoring investments across Ghana.

The registry is expected to improve transparency, strengthen investment tracking, and provide government agencies with accurate data to guide policy decisions and measure the impact of investment projects on the national economy.

Officials believe the database will also enhance investor confidence by improving regulatory oversight and facilitating more efficient investment management.

The new GIPC Act also expands the country's investment promotion strategy by introducing measures aimed at helping successful Ghanaian businesses grow beyond the domestic market.

Mr. Madjie said the government intends to actively support local companies with the potential to expand into regional and international markets, creating globally competitive Ghanaian enterprises.

"We are also going to encourage Ghanaian businesses that have expanded within the country to go abroad and expand their operations internationally," he said.

"Our objective is ultimately to create globally recognised Ghanaian businesses similar to successful multinational companies around the world."

The initiative forms part of Ghana's broader strategy to increase exports, improve regional trade participation under the African Continental Free Trade Area (AfCFTA), and strengthen the country's private sector.

Another major feature of the legislation is the creation of a legal framework for an investment-by-citizenship programme, which will allow qualified investors to obtain citizenship under conditions yet to be announced.

Mr. Madjie explained that the detailed implementation guidelines will be developed in collaboration with the Ministry of the Interior, with further announcements expected once the framework is finalised.

"There's also an interesting provision that lays the foundation for investment by citizenship. We will work with the Minister for the Interior to develop the modalities for implementing the programme," he noted.

The initiative is expected to attract high-net-worth individuals and strategic investors while supporting national economic development.

The legislation also changes the institutional identity of the Ghana Investment Promotion Centre, which will now operate as the Ghana Investment Promotion Authority (GIPA).

According to Mr. Madjie, the new designation better reflects the organisation's expanded mandate, which extends beyond promoting investment to regulating and monitoring investment activities across the country.

"We have been promoting investment and regulating investment for many years. The Authority designation simply reflects the broader responsibilities we already perform," he explained.

The passage of the new GIPC Act represents one of the most comprehensive reforms to Ghana's investment framework in recent years.

Government officials believe the legislation will boost foreign direct investment, improve investor confidence, strengthen regulatory oversight, encourage domestic business expansion, and position Ghana as one of Africa's leading destinations for investment.

The reforms are also expected to support job creation, technology transfer, industrial growth, and long-term economic development as Ghana continues efforts to build a resilient and competitive economy.