Introduction
Capital is a fundamental component in the establishment and operation of any business. It typically refers to the financial resources that a company must have to start and sustain its activities, serve as a cushion against risks, and demonstrate financial credibility to regulators, investors, and stakeholders. In Ghana, different regulatory bodies impose specific capital requirements depending on the nature of the business and its sector of operation.
Notably, there is growing confusion among fintech companies operating in Ghana regarding which capital framework applies to them: the Ghana Investment Promotion Centre's (GIPC) minimum capital requirement or the Bank of Ghana's (BOG) integrity capital. While the GIPC's regime generally targets foreign investors across all sectors, the BOG's requirements are tailored to payment service providers and financial technology firms under the Payment Systems and Services Act, 2019 (Act 987). Given the overlapping and sometimes unclear applicability of these regimes, especially where foreign-owned fintech companies are involved, businesses can face uncertainty when determining compliance obligations.
The table below provides a structured comparison of the two capital requirements to clarify their distinctions and assist fintechs and other stakeholders in navigating these frameworks effectively.
|
# |
QUESTION |
GIPC MINIMUM CAPITAL REQUIREMENT |
BOG INTEGRITY CAPITAL |
|
1. |
What is the primary legislation governing the capital requirement? |
Governed by the Ghana Investment Promotion Centre Act, 2013 (Act 865) (GIPC Act). |
Governed by the Payment Systems and Services Act, 2019 (Act 987) (PSSA). |
|
2. |
Which regulatory body is responsible for enforcing compliance? |
The Ghana Investment Promotion Centre (GIPC) enforces compliance. |
The Bank of Ghana (BOG) enforces compliance. |
|
3. |
To which types of entities or individuals does the capital requirement apply? |
Applicable to non-Ghanaian shareholders of Ghanaian companies. |
Applicable to all entities licensed under the PSSA (except PSP Standard licenses and Payment and Financial Technology Service Providers). |
|
4. |
What is the stipulated amount of the required capital? |
· USD 200,000 for joint ventures (foreigners partnering with Ghanaians). · USD 500,000 for wholly foreign-owned businesses. |
Current stipulated amounts are: (i) Dedicated Electronic Money Issuer: GHS 20 million (ii) Payment Service Provider (Scheme): GHS 8 million (iii) Payment Service Provider (Enhanced): GHS 2 million (iv) Payment Service Provider (Medium): GHS 800,000 (v) Payment Service Provider (Standard): No capital requirement (vi) Payment and Financial Technology Service Provider: No capital requirement. |
|
5. |
In what form must the required capital be provided? |
The required capital may take the form of cash, capital goods, or a combination of both. |
The required capital must be provided strictly in cash. |
|
6. |
Is the capital required to be paid in local currency or can foreign currency be used? |
The capital must be transferred in United States Dollars (USD). |
The capital must be paid in Ghana Cedis (GHS). |
|
7. |
Are persons required to transfer the capital to the regulatory authority? |
No. Companies retain the funds and are not required to transfer them to the GIPC. |
Yes. The required capital must be transferred to and held by the Bank of Ghana. |
|
8. |
Does the company maintain access to the capital after payment or transfer? |
Yes. The company has full access and may utilize the funds for its operations. |
No. The company cannot access the funds except in the event of winding up and after settling all liabilities. |
|
9. |
At what point must the required capital be transferred or paid? |
The capital must be available prior to the commencement of business operations. |
The capital is usually paid upon the approval of the license and prior to its issuance. |
|
10. |
What are the penalties or consequences for non-compliance with the capital requirement? |
Penalties include: (i) a fine between GHS 6,000 and GHS 12,000 upon summary conviction. (ii) where the breach continues, an additional daily fine between GHS 300 and GHS 600 may be imposed. (iii) the GIPC may also in consultation with the appropriate agency: · suspend or cancel the registration of the enterprise; · revoke incentives granted to the enterprise; · order the payment of statutory fees and taxes to which the enterprise is exempted; · advise the BoG to suspend remittances by the enterprise; · take any other action the Board of GIPC deems fit. |
The license applied for shall not be issued until the required capital is paid in full. |
|
11. |
Are there any exemptions or special considerations? |
Yes. Exemptions apply to: (i) Foreign spouses of Ghanaian citizens, who; · have been married for 5 years or more, or hold an indefinite resident permit prior to registration of the business; · the marriage has been validly conducted; · the foreign spouse is ordinarily resident in Ghana; (ii) Former Ghanaian citizens who lost citizenship due to acquiring another nationality; (iii) Portfolio investors; and (iv) Businesses engaged solely in export trading or manufacturing. |
No. There are no exemptions under the integrity capital requirement. |
|
12. . |
Does the capital contribute to eligibility for specific licenses or business activities? |
No. It is a general requirement applicable to all businesses with foreign participation, regardless of industry. |
Yes. It determines eligibility for the following licenses; (i) Dedicated Electronic Money Issuer (ii) Payment Service Provider (Scheme) (iii) Payment Service Provider (Enhanced) (iv) Payment Service Provider (Medium) |
|
13. |
Is proof of capital subject to audit or verification by the regulator? |
Yes. The GIPC relies on a capital confirmation from the Bank of Ghana to verify compliance. |
Yes. The BoG verifies the payment through the designated integrity capital account. |
|
14. |
Can the capital be varied at the discretion of the regulator? |
No. The capital thresholds are fixed by statute and can only be changed through legislative amendment. |
Yes. The BoG has the discretion to review and revise the required capital amounts as empowered by the PSSA. | |
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
