When the President of Ghana, H.E J. D Mahama, stood before investors in Yokohama in August 2025 and announced plans to tear down Ghana’s minimum capital barriers, I recognised in my article titled “Scrapping Minimum Capital Requirement: Opportunity or Risk? the opportunity; a more open investment climate, attractive startups, SMEs, and the alignment with Ghana’s 24 Hour-Economy initiative. Also, the risk, which was identified was that, without defined citizen-only trading activities, local equity participation requirement and robust enforcement, Ghana risked walking the path of South Africa, where absence of such legislative protections fuelled perceptions of unfair foreign competition and those perceptions turn violent. Ultimately the call was for an open investment model paired with smart safeguards.
Eight months later, The Parliament of Ghana during the 31st Sitting of the 1st Meeting of the 2nd Session, passed the Ghana Investment Promotion Authority (GIPA) Act, 2025, repealing the GIPC Act, 2013 (Act 865) and ushering in a new investment era. The result is a reform worth commending, with caveats worth amplifying.
- What Government Got Right
The Mahama administration deserves genuine praise for threading a difficult needle. Rather than a blanket removal of all capital thresholds, the new GIPA Act took a more surgical approach. Minimum capital requirements have been removed for joint ventures and wholly foreign-owned companies, except trading companies. Trading companies, the sector most sensitive to local competition, retain a minimum cash capital requirement of $500,000, halved from the old $1,000,000, but still a meaningful bar that signals serious intent.
This is smart, balanced lawmaking. It opens Ghana’s doors wide to FDI in manufacturing, technology, agriculture, and services, precisely the high-value sectors Ghana needs while keeping a protective fence around the retail and trading spaces where ordinary Ghanaians earn their livelihoods.
Beyond capital thresholds, the Act strengthens local participation requirements, including a 75% local skilled workforce obligation for foreign-owned enterprises. This is a structural safeguard that ensures foreign investment creates jobs for Ghanaians, not just profits for foreign shareholders. The Act also places stronger emphasis on inclusive growth by recognising the role of Ghanaian investors and supporting wholly Ghanaian-owned enterprises through improved access to incentives and facilitation services, while incorporating principles of sustainable development, social inclusion, and environmental responsibility.
Additionally, the new law designates GIPA as Ghana’s national focal point for the Protocol on Investment under the African Continental Free Trade Area (AfCFTA), positioning Ghana institutionally at the heart of continental trade, not just as a passive recipient of Foreign Direct Investment.
- The Unfinished Business: Enforcement!
A law is only as strong as its enforcement. And here, Ghana must be honest with itself.
The persistent challenge of fronting where foreign nationals use Ghanaian citizens as nominal owners while retaining operational control remains one of the core problems the GIPA Act seeks to address. This practice has been illegal even under the old GIPC Act too yet it flourished. The question is not whether the law prohibits it; it does. The question is whether GIPA will have the resources, the mandate, and the will to actually pursue it.
In recent years, the Ghana Union of Traders Associations (GUTA) has clashed with the Nigerian Union of Traders Associations, Ghana (NUTAG) over enforcement of the GIPC Act’s reserved-sector rules and allegations that foreign operators flouted capital-threshold requirements. These tensions did not arise because the old law was silent. They arose because enforcement was weak. The new Act must not repeat that failure.
Reserved activities must be actively policed, not passively listed. Hawking, petty retail, operating a provisions store, running a taxi service etc. must be backed by regular inspections, stiff penalties, and publicised prosecutions. A law that exists only on paper emboldens violators.
Also, the 75% local workforce requirement must be verified, not self-reported. GIPA should require annual workforce audits, with independent verification, as a condition of maintaining registration. Fronting extends beyond ownership. It can include importing foreign workers into roles that should belong to Ghanaians.
GIPA must work with the banking sector to ensure only verifiable, banked cash transfers satisfy the trading capital requirement, as was recommended in the technology transfer framework reforms within the same Act.
Ghana has passed a generational investment law. The framework is right. The instinct to protect citizens while opening to the world is right. Close monitoring by GIPA’s aftercare services will be essential to ensure that new market entrants contribute to domestic skills development rather than displacing Ghanaian enterprises. Open investment and strong safeguards are not opposites. They are strategic partners. Ghana is open for business. Make sure it stays open for Ghanaians too.
This article is a follow-up to “Scrapping Minimum Capital Requirements for Foreign Investors: Opportunity or Risk?” published in August 2025. Read the original at https://www.caldwellgreene.com/gipc-act-reform-in-ghana.
By Prince Caldwell Kojo Tabiri Esq.
The writer is a dispute resolution practitioner with qualifications in Ghana and Canada. He is an associate member of the International Centre for Dispute Resolution (ICDR) Young & International Group and also a Young Member of the Institute for Transnational Arbitrators, USA. He is a Partner at Caldwell Greene Legal Practitioners PRUC, a dispute resolution law firm located at Labadi Beach in Accra.