FREE TRADE ZONE - EXPORT PROCESSING ZONE


Introduction
Business Focus Group and the Government of Ghana introduces the BF TEMA EXPORT PROCESSING ZONE, an integrated programme to promote processing and manufacturing of goods, and to encourage the development of commercial and services activities at seaport areas. BF Tema EPZ covers over 681 acres of land and is private-sector driven. The government's role is to facilitate, regulate and monitor activities of zone developers, operators and enterprises.


Tema In Brief
Some 25km east of Accra , Tema is one of the industrial and residential towns in Ghana and known as the country's largest major port. It is also the county's fastest growing town (1961: 35,000 inhabitants; 1990: over 500,000).

The majority of the country's major industries have their headquarters in Tema, e.g. aluminium smelters, oil refineries, cocoa processing plants and cement plants. Investors will find that BF TEMA EPZ offers a favourable and conducive environment for manufacturing activities.


Why invest in Ghana ?


ADVANTAGES

• A stable political environment within the West African sub-region, with established democratic institutions and systems to ensure good governance of the country.
• Abundant, adaptable and easily trainable labour force.
• A minimum wage rate of approximately US$1.50 per day.
• No restrictions on issuing of work and residence permits to free zone investors and employees.
• Availability of entry visa for nationals of USA and Canada , OECD and some Asian countries as well as Republic of South Africa on arrival at any port of entry in Ghana .
• Duty-free access of manufactured exports to USA and European Union market.
• Excellent sea and air connections with Europe and USA .
• Strategic and central location within the West African sub-region provides access to a total market of over 250 million people.
• A comparatively well developed infrastructure, i.e.. internal road network, electricity and water supply, internal and external communications as well as sea and airport facilities.
• An already existing diversified industrial base ranging from heavy engineering to precision industries, electronics, agro-processing, plastics and metal works, clothing and textiles, jewellery and wood processing.
• Availability of a stock exchange as well as other bank and non-banking financial institutions, i.e. Exim Guaranty Co. Ltd., Venture Fund Management Company, Ghana Leasing Company, etc.
• A dynamic private sector willing to collaborate with foreign partners.
• A high degree of personal safety.
• World Bank/IDA support in development of infrastructure as per its approved credit facility of over US$50 million to the "Ghana Trade and Investment Gateway Project" in January 1999.

INCENTIVES
Extensive and generous incentives have been packaged in the Free Zone Act (1995) for investors interested in operating in BF TEMA EPZ in Ghana .


Duties
100% exemption from payment of direct and indirect duties and levies on all imports of production and exports from free zones.


Taxation

• 100% exemption is granted to investors from payment of income tax on profits for 10 years.
• Income tax rate after 10 years shall not exceed 8%.
• Total exemption from payment of withholding taxes from dividends arising out of free zone investments.
• Relief from double taxation for foreign investors and employees.

Customs

• Customs house will operate within the zone for investor's convenience.
• No import licensing requirements and minimal customs formalities.

Zone Ownership

• 100% ownership of shares by any investor, foreign or national, in a free zone enterprise is allowed, subject to the law of the Contract.
• No restriction on total foreign or local ownership of free zone enclaves and enterprises.

Capital/Profit Repatriation
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.

Management Of Foreign Currency

• Free zone investors are permitted to operate foreign currency accounts with banks in Ghana .

Sales To Local Market

• Up to 30% of annual production of goods and services from a free zone enterprise is authorised for sale in the local market.

Investment Guarantee

• Free zone investment are guaranteed against nationalization and expropriation.

SETTING UP

Project Approval

• Project APPROVAL is not required for investments in the economy, except in the following areas:-
• Petroleum Business - by Ministry of Mines & Energy
• Mineral and Mining Business - by Minerals Commission
• Portfolio Investments - by the Ghana Stock Exchange
• Free Zones activities - by the Ghana Free Zones Board

Procedures

· One-stop approval and/or facilitation by respective Investment Promotion Agencies.


Ownership

• Joint Ventures with Ghanaian partners are encouraged but 100% foreign participation is allowed.

Equity

• US$10,000 - for Joint Ventures with Ghanaian partner
• US$50,000 - for 100% Foreign ownership
• US$300,000 - for Trading activity

Expatriate Employment

• Automatic quotas tied to Investment Capital:
• 1 quota for US$10,000 - US$100,000 paid-up capital
• 2 quota for 100,000 - US$500,000 paid-up capital
• 4 quota for US$500,000 - plus paid-up capital

Investment Incentives

• Corporate tax: - 8% on export income, 25% for hotels and 35% for others.
• Locational incentive: - 25 - 50% tax rebates.
• Tax holidays: indefinite for cocoa farming; 3 to 10 years depending on sector; 10-years for Free Zones with - 8% corporate tax thereafter.
• Tariff exemption: - 100% duty exemption for production equipment.

Investment Guarantees

• Constitutional provision
• Investment laws which guarantee 100% transfer of profits, dividends, etc.
• MIGA membership
• Investment Promotion and Protection Agreements (Bilateral)

PROCEDURE FOR ESTABLISHMENT OF FREE ZONE OPERATIONS

Procedure for Establishment of Free Zone Development Projects & Enterprises
An investor who wishes to establish as a Free Zone developer or set up an enterprise in Ghana Free Zone will require various licenses and permits to enable him operate. The Ghana Free Zone Board provides a "one-stop approval service" to investors to assist them complete formalities for the establishment of free zone investment projects.

The formalities that should be fulfilled by the investor to enable him/her set up a Free Zone enclave or enterprise are as follows:-

a. Location of Zone Operations
Free Zone enclaves and enterprises can be located anywhere in Ghana upon the approval of the Ghana Free Zones Board (GFZB).

Procedures/Requirements

1. The Ghana Free Zones Board (GFZB) may identify or make available land for zone creation and development.
2. An investor may lease properties or propose properties he/she already owns for the development and/or operation of a free zone.

b. Developer's License
Any investor wishing to establish as a zone developer in Ghana must obtain a Developer's License.

Procedures/Requirements

1. The developer should incorporate a company or partnership in Ghana .
2. The developer should obtain and complete the GFZB Form 1 and submit it with required attachment to the Secretariat of the Board.
3. The GFZB shall notify the developer of the status of his/her application for license within 28 working days of receipt of application.
4. A Developer's License shall be issued to the successful applicant who should commence activities within six months of approval.
5. A Developer's License fee of US$1,000 or its equivalent in cedis shall be charged by the GFZB in the first instant and a renewal fee of US$1,000 or its equivalent in cedis paid annually by the developer.

c. Enterprise License
Investors wishing to set up enterprises (for manufacturing, commercial or service activities) must obtain the relevant Enterprise License.

Procedures/Requirements

1. The investor(s) should incorporate a company or partnership in Ghana.
2. The investor(s) should show evidence of possession or lease of real property or intent to acquire such property.
3. Depending on the activity to be undertaken, the applicant should obtain and complete GFZB Form 3, 4 or 5 and submit it with the required attachments to the Secretariat of the Board.
4. The GFZB shall notify the investor of his/her application for License within 28 working days.
5. An Enterprise License specifying authorized activity to be undertaken by the applicant shall be issued to the successful applicant who shall commence activities within 6 months of approval.
6. An Enterprise License fee of US$1,000 or its equivalent in cedis shall be charged by the GFZB in the first instant and a renewal fee of US$800 or its equivalent in cedis paid annually by the Enterprise Operator.

d. Construction Requirements
Procedures/Requirements

1. Developers and enterprises must erect suitable perimeter fences and enclosures.
2. FZ enterprises must erect fences and/or enclosures which shall be at least 2.5m high.
3. A free zone factory building should be located at least 3m inside the enclosure.

e. Health & Safety Requirements
Free Zone developers and enterprises must comply with health, safety and environmental requirements of
Ghana.

Procedures/Requirements

1. Free Zone investors should comply with: Factory, Offices and Shops Act (1970) on health, safety and other standard requirements; and environmental regulations, standards, procedures and requirement of Environmental Protection Agency.
2. The GFZB shall register free zone developers and enterprises with:
• Factory Inspectorate Department
• Environmental Protection Agency
• Town and Country Planning
• Metropolitan & District Assemblies
3. Free Zone developers and enterprises are required to permit periodic checks by the afore-mentioned bodies.

f. Electricity Supply
Application may be submitted through the GFZB for approval of Electricity Company of Ghana. Total consumption and load requirements in Kw should be indicated.


g. Water Supply
Application for water supply in excess of 20,000 liters/day may be submitted through the GFZB for approval of Ghana Water and Sewerage Corporation (GWSC).


h. Application for Telephone, Telex & Telefax Services
Application(s) may be made through the GFZB for consideration of the Ghana Telecommunications Company Ltd.


i. Entry Visa
All Free Zone investors, representatives and employees must secure entry visa to Ghana.

Procedures/Requirements

1. Entry permit may be obtained from a Ghana Embassy or High Commission abroad.
2. A temporary entry permit may be obtained on arrival at a point of entry in Ghana, upon prior notification of GFZB.

j. Work & Residence Permits
All foreign employees of Free Zones shall require work and residence permits.

Procedures/Requirements

1. Application for work and residence permits should be submitted to the GFZB at lest 2 months prior to the intended date of employment.
2. Any such application should be accompanied with a medical certificate of the prospective employee.
3. Applicable fees are as follows:
• - 1st & 2nd year - US$200
• - 3rd & 4th year - US$300
• - 5th & thereafter - US$500
4. Work permits shall not exceed 24 months in duration, will not be transferable and the fees not refundable.

k. Customs Declaration Form
A Free Zone Customs Declaration Form 9 shall be purchased at the cost of US$25 or its equivalent in cedis for importation of goods/services into a single-factory free zone or a free zone enclave. The Form 9 together with relevant Bill of Lading or Airway Bill shall be endorsed by the Ghana Free Zones Board Secretariat before clearing of goods/services.



For further enquiries contact:

The Secretariat
Ghana Free Zones board
P.O. Box M.626
Accra , Ghana
Tel: 233-21-780532-5
Fax: 233-21-780536
E-mail: freezone@africaonline.com.gh
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