GIPC defends removal of capital requirement for foreign enterprises

CEO of the Ghana Investment Promotion Centre (GIPC), Yofi Grant has expressed his support for the Centre's decision to eliminate the capital requirement for foreign enterprises.

Previously, Section 28 of the GIPC Act mandated that foreign partners in joint ventures invest a minimum of $200,000, while individual foreign retailers had to commit $1 million to operate in Ghana.

Speaking at the second Ghana EU Business Forum in Accra, Grant explained that the revision aims to create a more welcoming and competitive business environment to attract more investors to the country.

Grant addressed a common misconception, stating, “Firstly, there was a misunderstanding because that money remains the company’s; it is not held in any account. Based on our research, nearly every foreign investor entering this market ultimately brings more than $500,000.”

“Therefore, this requirement shouldn't be a concern. However, it can still be a barrier, especially for SMEs and SMIs in joint ventures. For example, in a 50-50 joint venture, if the foreign partner must contribute $200,000, the local investor is also expected to match that amount. Unfortunately, many SMEs lack the necessary capital to invest in their businesses,” he added.

Local trade associations have criticized the policy change, labeling it as regressive and harmful to Ghanaian traders, with some attributing the rise of Asian-owned retail businesses to government policies.

ID/MA