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Legal Guide to Free Zones in Ghana

Ghana offers enticing incentives to invest in the nation's free zones.

Ghana offers global investors some enticing incentives to invest in the nation’s free zones. Our Knowledge Series article explains how Ghana’s free zones work and how to set up a free zone business.

By Nelson Ayamdoo, Senior Associate Attorney at Centurion Law Group’s Accra office

Ghana’s free zones program commenced in 1996 after the enactment of the Free Zones Act, 1995 (Act 505), with the main aim of the program being the promotion of economic development through the export of made-in-Ghana products. The Act seeks to achieve that purpose by designating the custom zones into free zones / single factory zones and national custom territory.

The basic principle of Ghanaian free zones is that an investor must export at least 70 percent of goods and services produced in the free zone / single factory zone in any given year and free of any duties. The 30 percent remainder may be sold in the national custom territory (local market) but such sales would be treated as imports into Ghana and would attract the payment of duties and taxes, where applicable.


The Free Zones Board (FZB) is the statutory body created to manage and implement the free zones programme. The Ministry of Trade and Industry oversees the work of the Board.

Creation of Free Zones and Ports

To create a free zone, the President of Ghana must declare that an area of land or building is a free zone or single factory zone. Under the Act, any area in Ghana may be declared a free zone or port.

Unlike a free zone, which is a collection of enterprises, a single factory zone covers a single factory area or building. The President may also declare any airport, seaport, river port or lake port as a free port. A free zone or free port is declared on the recommendation of the FZB and the declaration must be published in the Commercial and Industrial Bulletin.

Currently, there are four export processing zones: Tema Export Processing Zone, Ashanti Technology Park, Sekondi Export Processing Zone and the Shama Export Processing Zone. The Boankra Inland Freeport is under development, along with a major oil and gas free port at Atuabo.

Businesses in Free Zones

Within the free zone’s arrangement, there are free zone developers and free zone enterprises. Developers build, maintain and manage the zones by constructing or providing the necessary infrastructure, such as warehouses, factory shells, utilities, fencing and enclosures. Free zone enterprises produce goods or provide services in the developed zones solely for export. With the exception of goods that are environmentally harmful, plastics manufacturing, timber related activities and enterprises engaged in the exploration or extraction of oil and gas and metals, an investor may produce anything for export. The FZB has, however, identified priority projects for investment:

  • Food and agricultural products processing (fruit, vegetables and cacao)
  • Information and communication technology (data processing, transcription, call centers, software development and computer assembly)
  • Textile/apparel manufacturing (including accessories for the garment industry and footwear)
  • Seafood processing
  • Jewelry/handicrafts production
  • Light industry and assembly
  • Metal fabrication
  • Floriculture

All businesses in free zones must be incorporated in Ghana as companies or partnerships.

Acquiring a Free Zone License

To obtain a free zone license, the investor must complete an application form and submit with the following, along with any other relevant documents:

  • Business plan
  • Copy of certificate of incorporation and company regulations
  • Copy of certificate to commence business
  • Evidence of possession/lease of real property or intent to acquire such property
  • MoU with potential clients
  • Environmental Protection Agency permit
  • Evidence of funding/capital transfer

Employment in a Free Zone

Investors in a free zone may negotiate and establish contracts of employment for engagement of a workforce and both Ghanaians and foreign workers may be employed. The labor law of Ghana shall apply rigidly to domestic employees such that their employment must be in conformity with the law in Ghana – this includes provision for minimum wage, payment of social security, workmen’s compensation and public holidays. For foreign workers, their conditions of work are a matter of negotiation and international labor practices.

Foreign workers require visas and permits to work in a free zone and the FZB facilitates the grant of visas and permits. All workers are liable to income tax but foreign workers may get relief from double taxation arrangements where applicable. Free zone investors are obliged to spend the equivalent of 1 percent of their total wage bill on the training of Ghanaian workers. Investors must provide documentation on their training program half-yearly to the FZB.

Investment Incentives

There are a number of incentives in place for investors. These include:

  • 100 percent exemption from payment of custom duties, transit duties, tonnage taxes, excise duties and all other direct and indirect duties and levies on all imports for production and exports from free zones
  • 10 years 100 percent exemption from payment of income tax on profits and thereafter a maximum of 8 percent income tax on profits
  • Total exemption from payment of withholding taxes from dividends arising from of free zone investments
  • Relief from double taxation for foreign investors and employees
  • No import licensing requirements
  • Minimal customs formalities
  • 100 percent ownership of shares by any investor – foreign or national – in a free zone enterprise
  • No conditions or restrictions on repatriation of dividends or net profit, payments for foreign loan servicing, payments of fees and charges for technology transfer agreements and remittance of proceeds from sale of any interest in a free zone investment
  • Freedom to operate foreign currency accounts with banks in Ghana
  • Guarantees against nationalization
  • Since at least 70 percent of annual production must be exported, 30 percent may be authorized for sale in the local market.
  • Investors may seek alternative dispute resolution mechanisms in he event of a dispute with government, such as arbitration under UNCITRAL rules, ICSID or BIT/MIT. The investor’s choice of the manner of dispute resolution overrides that of government.