ghana capital investments act

GHANA CAPITAL INVESTMENTS ACTSource: International Legal Materials, Vol. 2, No. 4 (JULY 1963), pp. 666-675Published by: American Society of International LawStable URL: http://www.jstor.org/stable/20689652 .

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666

Act 172 GHANA CAPITAL INVESTMENTS ACT

The Hundred and seventy-second

ACT OF THE PARLIAMENT OF THE REPUBLIC

OF GHANA

entitled

THE CAPITAL INVESTMENTS ACT, 1963

An act to encourage the investment of foreign capital and other purposes connected therewith.

date of assent: 19th April, 1963

Bb rr enacted by the President and the National Assembly in this present Parliament assembled as follows:?

Part I?Capital Investments Board

1. (1) There is hereby established for the purposes of this Act a Establish Capital Investment Board.

Boa?d?? (2) The Board shall consist of a chairman and eight other

members including, (a) a representative of the Bank of Ghana.

) the Official Head of the Ministry responsible for Finance,

(c) the Official Head of the Ministry responsible for Industries,

(d) the Managing Director of the National Investment Bank,

(e) the Executive Secretary of the State Planning Commission, or their representatives, and three other members all of whom shall be appointed by the President.

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Act 172 Capital Investments Act, 1963

Functions of Board.

Procedure of the Board.

Application for appro val.

(3) The chairman shall be appointed by the President and the Secretary of the Board shall be appointed by the Minister.

2? (1) The functions of the Board shall be, (a) to initiate and organize activities for the encourage

ment of investment of foreign capital and to provide for the creation of the conditions required therefor;

(b) to grant approval for capital investments; (c) to maintain liaison between investors and Government

departments, agencies and other authorities concerned, to give and disseminate information in matters of capital investments in Ghana, and to assist investors in the implementation of their projects;

(d) to recommend to any competent authority to grant, within the scope of the enactments which apply in its sphere of competence or with the implementation of which it is charged, any exemption, reduction, facility or licence in respect of any enterprise, property, investment or loan likely to assist in the attainment of the objects of this Act; and

(e) to do all acts as are incidental or conducive to the attainment of the purposes of this Act.

(2) For the purposes of this section, the Minister may, on the advice of the Board, give directions in writing to any Government department, agency or other Government authority and any such

department, agency or authority shall comply with any directions so given.

(3) The approval given under this section shall be in the form of an agreement entered into by the Minister and the person concerned, not being inconsistent with the provisions of this Act, setting out the conditions of the approval and the benefits conferred by the agree

ment.

3. Save as may otherwise be provided by this Act and Regulations made thereunder the Board shall determine its procedure and the conduct of its business.

Part II?Obligations of Investors

4. (1) Any person who has invested, or intends to invest, capital in any sector of the national economy and wishing to enjoy any benefit conferred by this Act shall submit to the Board the particulars of a project containing a detailed description of the enterprise carried on or intended to be carried on.

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Capital Investments Act, 1963 Act 172

(2) The particulars required under the preceding subsection shall include detailed description of,

(a) an investment and financial plan showing the amount of investment in external or Ghana currency;

(h) a production scheme indicating the volume and value of the production;

(c) a services scheme indicating the creation of services and the volume and value of the services intended to be rendered;

(d) an import and export scheme indicating the anti cipated volume of imports and exports;

(e) an employment scheme showing a programme of training for persons who are citizens of Ghana to

acquire the requisite skills in the particular enterprise; (/) the industry to be established and the product to be

produced; (g) the locality in which it is proposed to carry on such

industry; (A) the day on or before which it is expected to make the

services available or to commence production in marketable quantities of the products specified;

(/) the estimate of the rate of production of the specified product which is to be attained on or before the date of production; and

(/) such other information as the Board may from time to time require.

5. Approval for capital investments under this Act may be granted for the purposes of contributing to the attainment of,

(a) the development of the productive capacity of the national economy through the efficient utilization of its resources and economic potential;

(b) the full utilization and expansion of the productive capacity of existing enterprises;

(c) the saving on imports, the increase of exports and the

improvement of services which will assist the strengthen ing of the payments position of the country; or

(d) a high level of employment and the impartation of technical skill to persons who are citizens of Ghana.

6. Any person to whom an approval has been granted under this Act shall,

(a) during the continuance in force of the agreement made under subsection (3) of section 2 of this Act, institute

Criteria of investment.

Training facilities.

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Duty to furnish information.

Compensa tion for

nationali zation.

Transfer abroad of

profits.

arrangements for the training of persons who are citizens of Ghana in administrative, technical, mana

gerial and other capacities, with a view to securing the benefit of their knowledge and experience in the conduct of the project concerned; and

(b) provide adequate facilities for the benefit and enjoy ment of employees.

7. Any person to whom approval has been granted under this Act shall furnish the Board, on demand, with any information, document or any other evidence relating to the implementation of the approved project, the fulfilment of the conditions of the approval, the conditions of any permit and the determination of the extent of any benefits thereunder.

Part III?Protection of Investments

8. (1) Subject to the provisions of this section, no investment under this Act shall be subject to expropriation by the Government.

(2) Where, however, in exceptional circumstances an approved project is taken over in the public interest, the Government shall pay fair compensation for the take over, in the currency in which the investment was originally made.

(3) Where there is a dispute as to the amount of compensation payable under this section, the matter shall be referred to an arbitra tor appointed by the parties and failing such appointment to arbitra tion through the agency of the International Bank for Reconstruction and Development.

9. Notwithstanding the provisions of any other enactment,

(a) there shall be no restriction, (i) on the remittance of capital, including apprecia

tion, to the country of origin of an investment under this Act, in the event of a sale or the

liquidation of the approved project; (ii) on the transfer of profits to the country of

origin of the investment after the payment of any tax due in respect of the investment;

(iii) on th,e transfer of payments in respect of principal, interest and other financial charges where a loan has been granted to a project by a non-resident for the purposes of the project in accordance with the approved conditions of the loan;

(b) reasonable facilities shall be provided by the Minister to expatriate personnel employed or engaged in an

approved project under this Act for making remittances

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670


abroad in respect of the maintenance of their families and other contractual obligations such as insurance

premiums and contributions to provident and pension funds:

Provided that the Minister may, in order to safeguard the ex??rnal payments position, impose temporary restrictions.

Part IV?Incentives for Investors

Income Tax Benefits 10. (1) Notwithstanding the provisions of any other enactment a

company granted an approval under this Act shall, during the continuance in force of the agreement executed under subsection (3) of section 2 of this Act, and subject to the other provisions of this Act, be exempt for a period of five years or for such longer period not exceeding ten years beginning from the date of production from the payment of income tax.

(2) For the purposes of this section the expression "

date of production

" means the day on which the approved project com menced to produce in marketable quantities the product or services

specified in the particulars submitted to the Board under section 4 of this Act.

11. Capital allowances shall be granted in respect of buildings, plant, machinery, structures, roads, furniture, fixtures and fittings used for the purposes of an approved project in accordance with the Schedule to this Act, after the period of exemption specified in the immediately preceding section.

12. In determining the chargeable income of a person who has incurred a capital expenditure on scientific research for the purposes of the development or advancement of an approved project, there shall be deducted from that income, every year for five years, begin ning with the year in which he incurred the said expenditure, an amount equal to twenty per centum of such expenditure:

Provided that no deductions shall be made under this section in respect of an expenditure invested in property on which capital allowances are granted under the Income Tax Ordinance, 1943

(No. 27 of 1943).

13. The Minister may enter into agreement with the authorities in the country concerned where any person is subject to double taxation for the purpose of minimising the tax payable by that person outside Ghana.

Tax holiday.

Capital allowance.

Sch.

Deductions for scientific research.

Refund of tax.

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Exemption from indirect taxes and

charges.

Registration fees and stamp duty on capital.

Deferment

pending grant of

approval.

Exemption from Indirect Taxes, etc.

14. (1) An approved project engaged in the production of goods for export, and using domestic raw materials, or producing goods that replace imports, may be granted any or all of the following benefits, namely,

(a) exemption from import and customs duties under the Customs Ordinance (Cap. 167) and purchase tax under the Purchase Tax Act, 1961 (Act 67), for materials, spare parts, fuel and raw materials which the approved project uses or consumes and which are not produced in sufficient quantities in Ghana; and in any such case the exempted articles shall not be sold unless the corresponding duties are previously paid;

(b) exemption up to one hundred per centum from export or excise duties on goods produced by the approved project provided that the goods are cleared through customs.

(2) The granting of benefits specified in this section shall be made in such a manner as will not create privileges in the competitive position of similar projects nor tend to the establishment of mono polies.

(3) An exemption under this section shall only be granted after guarantee has been given to the satisfaction of the Comptroller of Customs and Excise, that the exempted goods shall be used for the purposes of the approved project.

Deferment of Payment of Fees

15. Where the undertaking of a company having a share capital or an increase of the capital of such a company is included in an approved project, the Board shall so inform the Registrar of Com panies ; and upon that being done, the payment of the registration fees and stamp duty on capital payable under the Ordinance or of such

part of those fees as is payable on the capital amount included in the approved project, shall be deferred for five years.

16. Where an application for the approval of a project has been submitted to the Board, and it is stated in the particulars of the project that for the purposes of the implementation thereof an application will be submitted for the registration of,

(a) a company having a share capital, or

(b) an increase in the capital of such a company, and in the opinion of the Board, the registration should take place before the Board decides on the approval, then, upon the recom mendation of the Board, the payment of the registration fees and

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stamp duty payable on capital under the Ordinance, or of such part of such fees or duty as is payable on the capital amount in respect of which the recommendation is given, shall be deferred for six months from the day of the registration or for such longer period, not exceeding eight months from the day of the registration, as the Board may fix; but if the project is meanwhile approved, the provi sions of section 15 of this Act shall apply.

17. (1) Where a company is unable to pay at the deferred date the fees deferred under section 15 of this Act, the Registrar of Companies shall, by notice in the Gazette, summon the creditors of the company to appear before him within thirty days from the date of the publication of the notice to show cause why the name of the company should not be struck off the register.

(2) When the Registrar of Companies is satified that there are no reasonable grounds for the retention of the name of the company in the register he shall strike the name of the company off the register and notify the same in the Gazette; and the company shall thereupon be deemed to be in liquidation as at the date of the publication of the notification in the Gazette.

(3) Where a company has been struck off the register under the provisions of the immediately preceding subsection, the Court may, on application made by any person interested, make an order upon such terms as the Court thinks fit as to the restoration of the name to the register.

(4) The application for the restoration of the name of a company shall be submitted within six months from the date of the notification in the Gazette that the company has been struck off.

(5) The Court shall not entertain an application under this section unless all fees due have been paid by the company.

(6) The Registrar-General shall be the liquidator in any liquidation under subsection (2) of this section.

(7) The provisions of this section shall be in addition to and not derogation of the provisions of the Ordinance in respect of the striking off of the name of a company.

Exemption from Property Taxes and Rates

18. Where a warehouse, factory or workshop has been constructed or acquired for the purposes of an approved projector improvements made thereto and the completion of the construction thereof or the acquisition or improvement took place after the commencement of this Act and the warehouse, factory or workshop is used directly for the purposes of the approved project, the approved project shall be

Striking-off of a com

pany which has not paid deferrea fees.

Exemptions from pre

?

perty tax, etc.

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Notice of exemption.

Exemption conditional upon receipt of licence.

Mixed projects.

Other investments.

Suspension and cancellation of approval.

exempt, for five years from the completion of the construction or improvement or from the commencement of the acquisition, whichever is the later event, from the payment of property tax under the Municipal Rating Act, 1959 (No. 4 of 1959), the Property Tax Act, 1961 (Act 67) and property rate under Part X and the Seventh Schedule to the Local Government Act, 1961 (Act 54).

19. A person entitled to exemption under the piovisions of this Part of this Act shall give notice of such fact, in the prescribed form, to the authority in charge of the collection of the tax or the rate, as the case may be.

20. A person who, being under a legal duty to obtain a licence for the construction of a building, has not obtained it or, having obtained it, has not fulfilled any of the conditions thereof shall not enjoy exemption under the provisions of this Act unless the Minister or any other authority empowered in that behalf by the Government certifies in writing that there was reasonable cause for not obtaining the licence or the non-fulfilment of the condition.

Part V?Miscellaneous

21. A project part of which is an approved project and part of which is not an approved project, whether the unapproved part was established before the grant of the approval or thereafter but outside the scope of the approved project, shall be entitled to the benefits conferred by this Act in respect of the approved part only.

22. Any investment not approved for the purposes of this Act or in respect of which no application has been made to the Board under section 4 of this Act may be allowed to repatriate capital, interest and other financial charges subject to the provisions of the Exchange Control Act, 1961 (Act 71).

23. (1) The Board may suspend or cancel an approval after the holder of the approval has been given advance notice of its intention to do so, if notwithstanding the notice any of the provisions of this Act or of the Regulations made thereunder, or the approved project, or any of the conditions of the approval, is not complied with; and upon its doing so, it may decide that all or any of the fees, taxes, duties and other charges in respect of which benefits were granted shall be paid at such times as it may prescribe.

(2) Where the Board is satisfied that an approval has been obtained on the basis of false or knowingly misleading statements, it shall cancel its approval with effect from the day on which it was granted, and all the fees, taxes, duties and other charges specified in subsection (1) of this section shall thereupon be paid upon the expiration of thirty days from the date of the notice of cancellation.

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24. The Minister may, by legislative instrument, and after consul tation with the Board, make Regulations for anything that may be prescribed under this Act, and generally for giving effect to the provisions of this Act.

25. The provisions of this Act shall be in addition to and not in derogation of anything contained in any other enactment and where there is a conflict between this and any other enactment the provisions of this Act shall prevail.

26. (1) In this Act unless the context otherwise requires, "

approved " means approved by the Board;

" benefits

" include facilities and exemptions conferred by

this Act; "

Board "

means the Capital Investments Board established under section 1 of this Act;

" chairman

" means the chairman of the Board ;

" company

" means a company registered under the Ordi

nance; "

date of production " means the day on which it is expected

to produce in marketable quantities the product or services specified in the application made under section 4 of this Act;

" investment

" means an investment under this Act;

" Minister " means the Minister responsible for Finance;

" Ordinance

" means the Companies Ordinance (Cap. 193) or any statutory re-enactment or modification thereof;

" project

" means an industry, undertaking or business

or property or an enlargement of any such industry, undertaking or business or property, any investment or

loan; or any part of any such industry, undertaking or

business, property, investment or loan.

27. (1) The Pioneer Industries and Companies Act, 1959 (No. 63 of 1959) the Pioneer Industries and Companies (Amendment) Act, 1960 (Act 28) and the Pioneer Industries and Companies (Amend

ment) Act, 1962 (Act 98) are hereby repealed.

(2) Notwithstanding the repeal of the enactments specified in the preceding subsection, any statutory instrument made under

any such enactment and in force immediately before the coming into operation of this Act shall continue in force as if made under this Act.

Regulations.

Application of Act.

Interpreta tion.

Repeals and

Saving.

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SCHEDULE (Section 11)

A?Capital Allowances

Initial allowance Annual allowance

Machinery

25% 15%

Plant

25% 15%

B?Buildings, Structures and Roads

Initial allowance .20% Annual allowance .10%

Printed by the Government Printing Department, Accra, Ghana

GP/A1052/6,496/4/62-63

Price 6d.



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