Technology transfer agreements under Ghana’s New Investment Promotion Authority Act, 2026 (Act 1173): A guide for investors
Introduction
Ghana’s investment landscape has undergone significant reform with the enactment of the Ghana Investment Promotion Authority Act, 2026 (Act 1173) (the “Act”), which repeals and replaces the Ghana Investment Promotion Centre Act, 2013 (Act 865) (the “Repealed Act”). The Act establishes the Ghana Investment Promotion Authority (“GIPA” or the “Authority”) as the successor body to the Ghana Investment Promotion Centre (“GIPC”), with a broadened mandate to promote and regulate investments in Ghana.
A central feature of the new legislative framework is the regime governing technology transfer agreements (“TTAs”). TTAs are a critical mechanism through which foreign technology, know-how, and expertise are introduced into the Ghanaian economy. They facilitate the licensing of intellectual property, the provision of technical and managerial services, and the transfer of operational knowledge to local entities. For foreign investors, technology providers, and local entities alike, understanding the TTA framework is essential to structuring compliant and enforceable cross-border technology arrangements in Ghana.
This article provides a comprehensive overview of the TTA regime under the Act, including the regulatory framework for registration, enforceability, fee caps, and practical considerations for investors.
What is a technology transfer agreement?
The Act provides that a “technology transfer agreement” is an agreement with a duration of not less than 12 months between a foreign entity duly incorporated or registered in its country of origin, and an entity duly incorporated or registered in Ghana, which involves one or more of the following:
· the assignment, sale, or licensing of a foreign patent, foreign trademark, and other forms of foreign industrial property rights registered in accordance with Ghanaian law or under any other arrangement recognised under Ghanaian law;
· the provision of foreign technological knowledge, such as software, instructions, guides, models, formulae, and feasibility studies;
· the provision of foreign technical advisory services, foreign technical assistance, or any other technical service in whatever form; and
· the provision of foreign managerial personnel for the day-to-day management or administration of the entity in Ghana.
The minimum duration threshold has been reduced from 18 months under the Repealed Act to 12 months under the Act, broadening the scope of agreements that fall within the regulatory regime. Additionally, the new definition expressly includes trademarks and software, reflecting the realities of modern technology transactions. Agreements solely for the provision of goods, or agreements of less than 12 months that are not renewable, do not qualify as TTAs.
Mandatory registration with GIPA
The Act requires that every entity which enters into a TTA must register the agreement with the Authority. Registration is not optional; it is a mandatory precondition for the agreement’s legal validity and enforceability.
Upon receipt of a TTA application, the Authority is required to review the agreement and, following registration, to monitor and ensure compliance with its terms and conditions. GIPA will register a TTA where it is satisfied with the documentation submitted and the prescribed registration fee has been paid.
A processing fee is payable for initial registration and for renewals. Where a submitted application is incomplete, the Authority will reject the application and may allow the parties to amend and resubmit.
Importantly, a TTA comes into force on the date of registration, not the date of execution. Payments under the TTA may only be made after the date of registration. This is a critical point for transaction planning: parties should factor in the registration timeline when negotiating commencement and payment terms.
Enforceability and consequences of non-registration
The Act introduces express and far-reaching consequences for failure to register a TTA, which were largely absent from the Repealed Act. Under the Act:
· Unenforceability: A TTA that is not registered with the Authority is not legally enforceable. This means that neither party may rely on the agreement in legal proceedings to assert rights or obligations arising thereunder.
· No tax deductibility: Fees and charges under an unregistered TTA cannot be treated as a deductible tax expense under the Income Tax Act, 2015 (Act 896). This has significant financial implications for the local entity, which would bear the cost without any tax relief.
· Banking restrictions: A licensed bank cannot make payment to any person or entity outside Ghana in respect of payment due under a TTA unless the party presents a certificate of registration and a copy of the TTA certified and confirmed by the Authority. This effectively prevents the remittance of technology fees abroad without prior registration.
Validity and renewal
Under the Act, a registered TTA is valid for a period of 5 years and is subject to renewal every 5 years. This represents a reduction from the 10-year duration prescribed under the Technology Transfer Regulations, 1992 (L.I. 1547) (the “Technology Transfer Regulations”).
The shorter validity period encourages periodic review and ensures that TTAs remain relevant and continue to deliver value to the Ghanaian economy.
Fee caps and restrictive clauses
The Technology Transfer Regulations remain in force, having been expressly saved under the Act. The Technology Transfer Regulations prescribes maximum royalty and fee ceilings as follows:
· Industrial property: 0–6% of net sales;
· Technical services/assistance including know-how: 0–5% of net sales;
· Know-how only: not exceeding 2% of net sales;
· Management services: 0–2% of profit before tax.
However, where the foreign entity owns more than 60% of the shares of the local entity, the payments for managerial services must be reduced pro rata. This provision recognises that where the foreign entity already has a controlling equity stake, the commercial justification for full management fees may be diminished.
Where a transferor provides a combination of the services above, the total fee must not exceed 8% of net sales. Fees exceeding these thresholds require the Authority’s prior approval.
Administrative penalties
The Act introduces specific administrative penalties for TTA-related contraventions, which were not present in the Repealed Act. Currently, a person or entity that transfers or facilitates the transfer of a fee or charge under an unregistered TTA or in a manner inconsistent with the terms of a registered TTA, is liable to an administrative penalty not exceeding GHS240,000[1] (approximately USD20,000), with an additional penalty not exceeding GHS24,000[2] (approximately USD2,000) for each month the breach continues. These penalties are recoverable as a civil debt.
Transitional provisions
The saving provisions of the Act provide that a TTA registered with the GIPC before the commencement of the Act is deemed to have been registered with the Authority. This ensures continuity and protects the validity of existing arrangements.
As noted, the Technology Transfer Regulations are expressly saved under the Act, meaning that the detailed operational rules on fee caps, restrictive clauses, training requirements, and other matters continue to apply pending any new regulations that may be made by the Minister.
Practical guidance for investors
In light of the new regime, foreign investors, technology providers, and local entities should take the following steps:
1. Review existing TTAs: Although existing registered TTAs are deemed registered under the Act, parties should review those agreements and consider the implications of the new 5-year validity and renewal framework when planning future renewals.
2. Plan for registration timelines: Given that a TTA only comes into force on the date of registration, parties should build sufficient lead time into their transaction timelines. No services should be provided, no payments can be made, and no tax deductions claimed, until registration is effected.
3. Ensure fee compliance: All fees must fall within the caps unless the Authority’s prior approval for higher fees is obtained. Parties should also ensure that fee structures for managerial services reflect the pro rata reduction where the foreign entity holds more than 60% shares in the Ghanaian entity.
4. Prepare comprehensive training schedules: The training schedule remains a mandatory component of any TTA application. It must be detailed, covering the entire duration, and must demonstrate genuine capacity building for local personnel.
5. Avoid restrictive clauses: Any clause that restricts the Ghanaian entity’s exports, research and development activities, or ability to source materials independently is among the restrictive provisions that will be unenforceable. Agreements should be reviewed to remove such provisions.
6. Ensure Ghanaian governing law: All TTAs must be governed by Ghanaian law. Foreign choice of law clauses are unenforceable.
7. Notify GIPA of changes: In practice, any modifications, terminations, or suspensions of a registered TTA require prior notification to, and in the case of modifications, the prior written approval of, the Authority.
Conclusion
The Act represents a significant modernisation of Ghana’s investment and technology transfer framework. The regime is now more prescriptive, with express enforceability consequences, administrative penalties, and a clearer delineation of the Authority’s mandate. For investors, registration is not merely a formality but a fundamental condition of validity, enforceability, and tax efficiency.
Given the complexity of the regulatory requirements and the significant consequences of non-compliance, entities are strongly encouraged to engage experienced legal counsel to review their technology transfer arrangements and guide them through the registration process with GIPA.
Disclaimer: The information contained in this article is for general information purposes only and does not constitute, and should not be regarded as, legal advice.
Patricia Jane Mumuni
Executive | Ghana
Cyril Effah
Associate | Ghana
