Why the GIPC wants to eliminate the capital requirement for foreign businesses

The Ghana Investment Promotion Centre (GIPC) is seeking to remove the minimum capital requirement for foreign businesses in a bid to create a more attractive investment environment, according to GIPC Chief Executive Yofi Grant.

Currently, under Ghanaian law, foreign joint ventures require a minimum investment of $200,000, while individual foreign retailers must have $1 million. 

Mr. Grant argues that this requirement creates an unnecessary hurdle, particularly for smaller businesses.

"Our research shows that most foreign investors coming to Ghana end up bringing in more than the minimum anyway," he explained. "The capital requirement isn't the real issue, but it acts as a psychological barrier, especially for small and medium-sized enterprises (SMEs) looking to form joint ventures."

Mr. Grant emphasizes that the minimum capital remains the company's money and isn't deposited with the government. 

However, in a 50/50 joint venture, the requirement forces the Ghanaian partner to come up with a matching amount, which can be a significant obstacle for smaller businesses.

This move has faced criticism from some local trading groups who fear increased competition from foreign businesses, particularly Asian retailers. 

However, the GIPC believes that eliminating the minimum capital requirement will ultimately benefit the Ghanaian economy by attracting a wider range of investors and fostering business growth.