Ghana Scraps Minimum Capital Requirement for Most Foreign Investors, Retains US$500,000 Cash Rule for Trading Sector

By 24HourBusiness.org News Desk

Accra, Ghana – Ghana has taken one of its most significant steps in investment policy reform in over a decade by abolishing the minimum capital requirement for most foreign investors under the newly enacted Ghana Investment Promotion Centre (GIPC) Act, a move expected to improve the country's competitiveness in attracting foreign direct investment (FDI).

However, the government has retained strict entry requirements for foreign participation in the trading sector, where investors must now inject US$500,000 in cash, replacing the previous system that allowed the requirement to be satisfied through imported goods.

 

The reforms, announced by the Chief Executive Officer of the Ghana Investment Promotion Centre, Simon Madjie, represent a major shift in Ghana's investment landscape and are intended to remove barriers that investors have consistently cited as discouraging investment.

 

A Major Shift in Ghana's Investment Policy

For years, Ghana's investment laws required foreign investors to meet minimum capital thresholds before establishing businesses in the country.

Under the previous GIPC Act (Act 865 of 2013), foreign investors were required to provide:

Business Type	Previous Requirement
Joint venture with a Ghanaian partner	US$200,000 minimum capital
Wholly foreign-owned enterprise	US$500,000 minimum capital
Trading enterprise	US$1 million minimum capital plus employment of at least 20 skilled Ghanaians

Many international investors argued that these thresholds placed Ghana at a competitive disadvantage compared with neighbouring investment destinations in West Africa.

Following consultations with investors and the private sector, Parliament approved amendments that have now been signed into law by President John Dramani Mahama.

 

Minimum Capital Requirement Abolished

According to GIPC CEO Simon Madjie, foreign investors entering sectors such as manufacturing, ICT, agribusiness, healthcare, tourism, logistics, renewable energy and professional services will no longer be required to satisfy statutory minimum capital requirements before establishing operations in Ghana.

Speaking on Channel One TV's The Point of View, Madjie said the reform responds directly to long-standing investor concerns.

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

The removal of capital thresholds is expected to reduce entry barriers, encourage entrepreneurship, accelerate project implementation and improve Ghana's ranking as an investment destination.

 

Trading Sector Still Protected

While the reforms liberalise most sectors of the economy, the government has maintained safeguards for the retail and trading industry.

Foreign investors wishing to engage in trading activities must now:

• Inject US$500,000 in cash
• Comply with all registration requirements under Ghana's investment laws 
• Meet any additional conditions prescribed by regulators 

Importantly, the law no longer permits imported merchandise to count toward the investment requirement.

Madjie explained:

"Except for trading, those in a trading enterprise must now bring in a cash amount of US$500,000. No longer goods, but a cash amount."

The change is expected to ensure that foreign traders contribute real capital into Ghana's economy rather than merely importing inventory.

 

 

Why Government Retained Restrictions on Trading

The trading sector remains one of the most sensitive areas of Ghana's economy.

Organisations such as the Ghana Union of Traders Association (GUTA) have consistently argued that unrestricted foreign participation places enormous pressure on local traders, many of whom operate with limited access to financing.

According to the 2024 Ghana Statistical Service Integrated Business Establishment Survey (IBES):

• Ghana has more than 1.8 million business establishments. 
• Over 90% are micro, small and medium-sized enterprises (MSMEs). 
• Wholesale and retail trade accounts for one of the largest shares of private-sector employment. 
• MSMEs contribute an estimated 70% of Ghana's GDP and approximately 85% of manufacturing employment, according to government and development partner estimates. 

By retaining stricter requirements for trading while opening other sectors, policymakers hope to strike a balance between attracting foreign investment and protecting indigenous businesses.

 

Creation of a National Investment Registry

The new law also establishes a National Investment Registry, a comprehensive digital database that will record and monitor investments across Ghana.

The registry is expected to:

• Track investment projects nationwide 
• Improve transparency 
• Support policy planning 
• Measure investment performance 
• Strengthen investor aftercare 
• Provide more accurate national investment statistics 

Analysts believe the registry could significantly improve Ghana's ability to monitor foreign direct investment and evaluate its economic impact.

 

Supporting Ghanaian Companies to Go Global

One of the most notable features of the new legislation is its emphasis on helping Ghanaian companies expand internationally.

Rather than focusing solely on attracting foreign investors into Ghana, the law empowers the investment authority to support domestic businesses seeking opportunities abroad.

Madjie explained:

"We are also going to encourage Ghanaian businesses who have expanded in-country to go abroad and expand their operations. The objective is ultimately to create some of the global businesses that we see around the world."

The policy aligns with Ghana's ambition to develop regional champions capable of competing across Africa under the African Continental Free Trade Area (AfCFTA).

With the AfCFTA Secretariat headquartered in Accra and a combined African market of more than 1.4 billion people with a combined GDP exceeding US$3.4 trillion, Ghanaian businesses have unprecedented opportunities to scale beyond national borders.

 

Investment by Citizenship Introduced

Another landmark provision in the new legislation establishes the legal basis for an Investment-by-Citizenship Programme.

Although implementation guidelines are yet to be published, the programme will be developed jointly by the new investment authority and the Ministry of the Interior.

Such programmes, already implemented in countries including Malta, Türkiye, Dominica and St. Kitts & Nevis, allow qualified foreign investors to obtain residency or citizenship through significant investments, subject to strict legal and security requirements.

Government officials believe a carefully designed programme could attract high-net-worth individuals, strategic investors and long-term capital into Ghana.

 

From GIPC to GIPA

The legislation also changes the institution's name from the Ghana Investment Promotion Centre (GIPC) to the Ghana Investment Promotion Authority (GIPA).

The rebranding reflects an expanded mandate that goes beyond investment promotion to include:

• Investment facilitation 
• Investor aftercare 
• Investment intelligence and research 
• Monitoring and compliance 
• International investment promotion 
• Support for Ghanaian companies expanding abroad 

The Authority is expected to play a more strategic role in positioning Ghana as West Africa's preferred investment hub.

 

What the Reforms Mean for Ghana

Investment experts say the reforms send a strong signal that Ghana is modernising its investment regime to compete more effectively for global capital while preserving safeguards in sectors considered strategically important to local entrepreneurs.

If effectively implemented, the new law could:

1. Increase foreign direct investment inflows. 
2. Improve Ghana's ease of doing business. 
3. Reduce administrative barriers for investors. 
4. Encourage technology transfer and innovation. 
5. Promote the international expansion of Ghanaian businesses. 
6. Strengthen investment monitoring through the National Investment Registry. 

For local traders, however, the retention of a US$500,000 cash requirement for foreign trading enterprises is likely to be welcomed as an additional safeguard against unfair competition.

As Ghana seeks to position itself as a leading investment destination under the government's industrialisation agenda, the success of these reforms will ultimately depend on transparent implementation, regulatory certainty and consistent enforcement.

 

Sources: Channel One TV (The Point of View interview with Simon Madjie), Ghana Investment Promotion Authority, Ghana Statistical Service (IBES), African Continental Free Trade Area (AfCFTA) Secretariat.