In exercise of the powers conferred on
the Minister responsible for Trade and Industry by sections 26(2)
and 41 of the Free Zone Act 1995 (Act 504), and after
consultation with the Minister responsible for customs and
exercise and the Commissioner of Customs, Excise and Preventive
Service in accordance with section 26(2) of Act 504, these
Regulations are made this 22nd day of February, 1996.
- FREE ZONE DEVELOPERS
Establishment of Free Zones Board
There is established by this Act a Board
to be known as the Free Zones Board, referred to in this Act as
Section 2. Composition of the
(i) The Board shall consist of
(a) a Chairman who shall be
the Minister for Trade and Industry; and
(b) eight other persons four
of whom shall be appointed from the private
(ii) The members of the Board shall
be appointed by the President in consultation with the
council of State and shall include at least two women.
Section 3. Functions of the Board
The functions of the Board are to
(a) grant licences to applicants
under this Act;
(b) assist applicants for licenses
under this Act by providing services for obtaining other
relevant licenses, permits and facilities;
(c) examine and recommend for
approval agreements and treaties relating to the
development and activities of the free zones;
(d) monitor the activities,
performance and development of free zone developers and
(e) ensure compliance by free zone
developers and enterprises of this Act and any other laws
relevant to free zone activities.
(f) register and keep records and
data on the programmes of developers, operators and
enterprises in free zones;
(g) perform such other functions as
are incidental to the foregoing.
Section 4. Tenure of office of
members of the Board and allowances.
(i) A member of the Board other than
the Chairman shall hold office for a term of four years
and is eligible for re-appointment.
(ii) A member of the Board other
than the Chairman may at any time resign his office in
writing addressed to the President through the chairman
or may be removed from office by the President in
consultation with the Council of State for stated reasons.
(iii) Members of the Board shall be
paid such allowances as the Minister responsible for
Finance shall determine.
Section 5. Meetings of the Board.
(i) The Board shall meet for the
dispatch of business at such times and places as the
chairman may determine but shall meet at least once every
(ii) The Chairman shall preside at
all meetings of the Board and in his absence the members
present shall elect one of their number to preside.
(iii) The quorum for a meeting of
the Board shall be five of the members.
(iv) Questions at a meeting of the
Board shall be determined by a majority of members
present and voting and where there is equality of votes
the person presiding shall have a casting vote.
(v) The Board may co-opt any person
to attend any of its meetings except that a person co-opted
does not have the right to vote on any matter before the
Board for decision.
(vi) The validity of the proceedings
of the Board shall not be affected by a vacancy among its
members or by a defect in the appointment or
qualification of a member.
(vii) A member of the Board who has
an interest in a contract proposed to be entered into on
behalf of the Board shall disclose in writing to the
Board the nature of his interest and shall be
disqualified from participating in any deliberations of
the Board in respect of the contract.
(viii) A member of the Board who
infringes subsection (7) of this section is liable to be
removed from the membership of the Board.
(ix) Except as otherwise provided in
this section, the Board shall regulate the procedure for
Section 6. Committees of the
The Board may for the discharge of its
functions appoint committees of the Board comprising members of
the Board or non-members or both and may assign to them such
functions as the Board may determine except that a committee
composed entirely of non-members may only advise the Board.
- ESTABLISHMENT OF FREE ZONES; DEVELOPERS OF FREE ZONES
Declaration of Free Zones.
(i) Subject to the Constitution and
any other enactment in force relating to the acquisition
of property, the President may on the recommendation of
the Board by notice published in the Commercial and
Industrial Bulletin, declare:
(a) any area of land or
building as a free zone;
(b) any airport, river port,
sea port, or lake port as a free port.
(ii) A declaration under subsection
(1) of this section shall specify the area and the scope
of activities in the free zone concerned.
Qualification of free zone developers.
(i) No person shall:
(b) manage; or
(c) develop and manage
a free zone unless it is a body
corporate registered under the Companies Code 1963 (Act 179)
or a partnership registered under the Private Partnership Act
1 962 (Act 152).
(ii) The body corporate or
partnership shall be licensed to develop, manage or
develop and manage free zone under this Act.
Section 9. Rights and
responsibilities of a free zone developer.
(i) Subject to the Constitution, a
free zone developer may for the purpose of its activities
(a) acquire land within the
area declared in respect of it; and
(b) lease or sub-lease real
property it owns, has leased or has the right to
use, sell or lease and may sell or rent buildings
to free zone enterprises.
(ii) It shall be the responsibility
of a developer to:
(a) construct and maintain
buildings, warehouse factory shells and provide
or contract other persons to provide utilities or
services such as water, electric power,
telecommunications and sewerage;
(b) develop all other
infrastructure necessary for the enhancement of
the efficient and effective activities of the
zone, in accordance with any regulations made
under this Act;
(c) provide fencing and
enclosures to separate the zone from the national
customs territory, and ensure security of the
(d) provide and contribute
to the cost of facilities for such on site
customs services as shall be determined by the
Customs, Excise and Preventive Services (CEPS);
(e) undertake any investment
or financial venture to facilitate and promote
the development of the Zone; and
(f) submit, within such
periods as the Board may direct, reports on
development in the relevant zone to the Board.
Section 10. Sub-contracting by
(i) A licensed developer may
undertake or sub- contract the management, control and
promotion of the free zone development in the declared
(ii) The developer shall apply for a
licence for any person to whom a sub-contract has been
given by it under subsection (1)
(iii) The application for a licence
for a sub-contract shall be made to the Board and shall
be accompanied with the executed sub-contract.
PART III - FREE ZONE ENTERPRISES
Export free zone enterprises
Subject to the provisions of this Act any
person may apply for a licence to establish an enterprise in a
Section 12. Qualification of
(i) No person shall carry on a trade,
business or industry within a free zone unless it is
(a) the Companies Code 1963
(Act 1 79); or
(b) the Private Partnership
Act 1962 (Act 152)
and is the holder of a licence
authorising the carrying on of that trade, business or
industry under this Act.
(ii) A company or partnership
qualified under subsection (1) and licenced under section
16 shall be referred to as a free zone enterprise.
Section 13. Rights and
responsibilities of a free zone enterprise.
(i) A free zone enterprise shall
have the right to produce any type of goods and services
for export but shall not produce any goods that are
(ii) A free zone enterprise shall be
(a) store, warehouse, pack,
unpack and repack, divide, sub-divide, group,
breakdown, assemble, disassemble, bottle,
rebottle, can, recan, decant, alter, sample,
display, grade, test, classify, mark, label,
relable, finish, handle, mix, combine, clean,
manipulate, restore, join, transform, transit and
transship, transfer, mount, refine, salvage,
destroy, demolish, confect, process and
manufacture any foreign or domestic raw material,
intermediate, semi-finished or finished goods or
components for export or re-export;
(b) render and sell any type
of information processing, computer-aided design,
computer-aided printing and publishing, software
development tele-marketing and any other similar
and related services;
(c) render and sell
financial, banking, insurance, commercial,
advisory, repair and maintenance, professional
training and other services subject to all
relevant laws and regulations for the time being
in force; and
(d) carry out any other
activities relevant to its licence as may be
considered necessary by the Board.
Section 14. Change of line of
A free zone enterprise may change its
production lines and process as often as it considers necessary
subject to prior approval of the Board.
Section 15. Application for
licenses to develop a free zone or operate an enterprise in a
(i) An application for a license to
develop, manage or establish an enterprise in the free
zone shall -
(a) be in writing;
(b) be submitted to the
Secretariat of the Board;
(c) specify the zone to be
developed or managed or both for the trade,
business or industry for which the license is
(d) be accompanied with such
information as the Board may require.
(ii) The Board shall cause response
to be made to an application within twenty eight working
days from the date of the receipt of the application.
Section 16. Grant of license to
developers and enterprises
(i) The Board may grant a license
(a) the development or
management or both of a free zone; or
(b) the carrying on of a
trade, business or industry within the free zone.
(ii) no license shall be granted for
the carrying on of: -
(a) the business of banking,
unless the applicant is also registered and
licensed under the Banking Law 1989 (P.N.D.C.L.
(b) the business of
insurance unless the applicant is also registered
under the Insurance Law 1989 (P.N.D.C.L 227).
(iii) A license issued under this
section shall be under the signature of the Chairman of
Section 17. Conditions of license
The Board may attach to a license such
conditions thinks appropriate concerning employment skills, job
opportunities and degree of export orientation.
Section 18. Revocation
(i) The Board may revoke a license
where it is satisfied that there has been a breach of
condition attached to the license.
(ii) The Board may upon the request
of the licensee vary at any time the conditions attached
to the license.
(iii) Before revoking a license, the
Board shall give not less than fourteen working days
notice of its intentions to the licensee and shall
consider any representations made to it by the licensee.
Section 19. Register
(i) The Board shall establish and
maintain a register of licenses granted under section 16
of this Act.
(ii) There shall be entered in the
register in respect of each license:
(a) the name of the person
to whom the license is granted; and
(b) the zone to be developed
or managed or both or the trade, business or
industry to which the license relates.
(iii) The register shall be kept by
the Board and shall be open for inspection by the public
subject to such fee as the Board may determine.
Section 20. Transfer of license
No licensee shall transfer a license
issued in respect of it to any other person without the prior
approval of the Board.
PART V - IMPORT AND EXPORT
Non-application of import laws to free zones
The Laws for the time being in force
relating to the importation and exportation of goods and services
other than consumer goods for commercial purposes shall not apply
(a) the bringing of goods directly
from a country outside Ghana into a free zone; or
(b) the dispatch of goods for export
out of a free zone to a country outside Ghana, except in
so far as such laws are made applicable by regulations
made under this Act.
Section 22. Exemption from taxes
of imports into free zone areas
The imports of a free zone developer, sub-contractor
or enterprise into a free zone single-factory zone shall be
exempt from direct and indirect taxes and duties.
Section 23. Sales in national
(i) The Minister may by legislative
instrument authorize the sale of up to 30 percent of the
annual production of goods and services of a free zone
and single factory zone enterprise to the national
(ii) Sale of goods from free zone
enterprises single factory zones to the national customs
territory shall be considered as imports and shall be
subject to the rules and regulations relating to imports
into the national customs territory.
(iii) Damaged or rejected goods, or
samples may be sold by the free zones and single-factory
zones to the national customs territory; and such goods
shall be considered as part of the 30 percent of annual
production of the free zones authorized to be sold to the
national customs territory and as such shall be subject
to the applicable and taxes.
(iv) An instrument issued under
subsection (i) of this section shall provide penalties
for contravention of any authority provided in it.
Section 24. Sales from national
customs territory to free zones
(i) Sales of goods and services by a
domestic enterprise from the national customs territory
to enterprises in the free zone and single-factory zone
shall be considered as exports.
(ii) A domestic enterprise shall be
eligible to benefit from the prevailing export incentives
available to a national exporter and shall not require an
export license for sale of any goods and services to
enterprises in the free zone or single factory zone.
(iii) An enterprise in a free zone
or single-factory zone may purchase goods and services
sold by a domestic enterprise with local currency
obtained through conversion of foreign currency through
the banks and any licensed foreign exchange bureau.
Section 25. Entry into free zone
(i) An authorized officer of any of
any of the Revenue Services, member of the Police Force
or an officer authorized by the Minister may, in the
discharge of their official duties at any time enter and
inspect a free zone, buildings, aircraft, ships, boats or
vehicles in the free zone.
(ii) An officer exercising any power
of entry or inspection shall on request produce his
(iii) Any person who prevents or
obstructs an authorized by subsection (1) of this section
or attempts to do so, commits an offense and is liable on
summary conviction to a fine not exceeding $1,000 or its
equivalent in cedis or imprisonment for a term not
exceeding six months or to both.
Section 26. Responsibility of
Customs Excise and Preventive Service
(i) The Customs Excise and
Preventive Service shall be responsible for the control
of zero-rated goods -
(a) within a free zone;
(b) in transit between two
free zones; and
(c) in transit between a
free zone and a point of entry into or exit out
(ii) The Minister after consultation
with the Minister responsible for Customs and Excise and
the Commissioner of Customs, Excise and Prevention
Service may by legislative instruments make regulations -
(a) adopting or modifying
for the purposes of this Act any of the
regulations relating to customers operations;
(b) governing the movement
of persons, vehicles or goods into and out of a
free zone, from and out to other parts of the
(c) covering the keeping,
storage and handling of goods in free zones;
(d) covering the keeping and
preserving of accounts and records in a specified
form in respect of goods in free zones; and
(e) relating to the
provision of security by bond or otherwise on
goods in transit between free zones and points of
entry and exit from and to other countries.
Section 27. Missing dutiable
Where goods stored in a free zone are
found to be missing without an acceptable explanation, the
Commissioner may request the licensee to pay the duty on the
goods at the rate in force at the time in addition to any penalty
which may be imposed by the Commissioner.
PART VI - INCENTIVES
Section 28. Tax concession
(i) Free zone developers and
enterprises granted licenses under this Act shall be
exempted from the payment of income tax on profits for
the first ten years from the date of commencement of
(ii) The income tax rate after ten
years shall not exceed a maximum of 8 percent.
(iii) A shareholder shall be
exempted from the payment of withholding taxes on
dividends arising out of free zone investments.
Section 29. Investors
A foreign investor may take and hold a
maximum of 100 percent of the shares in any free zone enterprise.
Section 30. Investments
guarantees, transfer of profits
Subject to this section any enterprise in
a free zone shall be guaranteed unconditional transfer through
any authorized dealer bank in free convertible currency of: -
(a) dividends or net profits
attributable to the investments;
(b) payments in respect of loans
servicing where a foreign loan has been obtained;
(c) fees and charges in respect of
any technology transfer agreement; and
(d) the remittance of proceeds (net
of all taxes and other obligations) in the event of sale
or liquidation of the enterprise or any interest
attributable to the investment.
Section 31. Investment guarantees,
transfer of profits
(i) No enterprise in a free zone
shall be nationalized or expropriated by Government and
no person who owns, whether wholly or in part, the
capital of an enterprise shall be compelled by law to
cede his interest in the capital to any other person.
(ii) There shall not be any
acquisition of an enterprise to which this Act applies by
the state unless the acquisition is in the national
interest or for a public purpose and under a law which
makes provision for
(a) payment of fair and
adequate compensation; and
(b) a right of access to the
High Court for the determination of the investor's
interest or right and the right and the amount of
compensation to which he is entitled.
(iii) Any compensation payable under
this section shall be paid without undue delay and
authorization for its repatriation in convertible
currency, where applicable, shall be issued.
Section 32. Dispute settlement
(i) Where a dispute arises between a
licensee in a free zone and the Government in respect of
any activities in the free zone, all efforts shall be
made through mutual discussion to reach an amicable
(ii) Any dispute between a licensee
and the Government in respect of any activities in a free
zone which is not amicably settled through mutual
discussions may be submitted at the option of the
aggrieved party to arbitration as follows -
(a) in accordance with the
rules for procedure for arbitration of the United
Nations Commission of International Trade Law; or
(b) in the case of a foreign
investor, within the framework of any bilateral
or multilateral agreement on investment
protection to which the Government and the
country of which the investor is a national are
(c) in accordance with any
other national or international machinery for the
settlement of investment disputes agreed to by
(iii) where in respect of any
dispute, there is disagreement between the licensee and
the Government as to the method of dispute settlement to
be adopted, the choice of the licensee and the Government
as to the method of dispute settlement to be adopted, the
choice of the licensee shall prevail.
Section 33. Operation of foreign
(i) Each free zone enterprise shall
be permitted to operate a foreign currency account with
banks in Ghana.
(ii) The terms and conditions under
which the accounts shall be operated shall be set out in
the license in the license granted under section 16 of
(iii) The Central Bank shall be
consulted by the Board on the terms and conditions
referred to in subsection (2) of this section.
Section 34. Employment in free
(i) Free zone developers and
enterprises shall be free to negotiate and establish
contracts of employment with employees that include wage
scales, minimum working hours, employee suspension and
dismissal, settlement of disputes arising between
employers and employees, and other such terms of
employment as shall be consistent with I.L.O. Conventions
on workers rights and conditions of service.
(ii) Work and resident permits shall
be required for any foreign national who wishes to live
in Ghana and work in a free zone.
(iii) Application for work and
permits for foreign employees of free zone enterprises
shall be submitted to the Board which shall take the
necessary action in consultation with the Immigration
(iv) Subject to the existence of a
double taxation agreement between the Government of Ghana
and the Government of the foreign employee , the foreign
employee shall be totally exempt from payment of income
tax to the Government of Ghana on income earned in the
free zone during he period of that work and resident
permits issued shall remain valid except that he employee
shall be liable of income tax in his home country.
Section 35. Investment guarantees,
transfer of profits
(i) The Board shall issued identity
cards to all employees of licensed operators in a free
(ii) A person who enters or leaves a
free zone may be subject to inspection by any person
authorized by the Board to do so.
(iii) A person who obstructs or
prevents any person authorized by the Board in
performance of his functions under subsection (2) of his
section commits an offense and his liable on summary
conviction to a fine not exceeding $500.00 or its
equivalent cedis or to imprisonment for a term not
exceeding six months or to both.
PART VII - ADMINISTRATION AND MISCELLANEOUS
Secretariat of the Board
(i) The Board shall have a
(ii) The Minister for Trade and
Industry shall assign to the Secretariat of the Board
such public officers as the Board may require for the
implementation of its functions.
(iii) The Ministry may by
legislative instrument make regulations on the functions
of the Secretariat.
Section 37. Monies for the
expenditure of the Board
There shall be provided to the Board by
Parliament such monies as it may require to meet its expenditure.
Section 38. Annual Report
The Minister shall submit to Parliament
as soon as practicable and in any event not more than six months
after the end of each financial year a report dealing generally
with the activities of the Board during the financial year to
which the report relates.
Section 39. Offenses by corporate
(i) Where an offense is committed
under this Act, regulations made under this Act or any
other law by a body of persons: -
(a) Where the body of
persons is a body corporate every director and
officer of the body corporate shall be deemed to
be guilty of the offense; and
(b) where the body of
persons is a firm or partnership every partner
shall be considered to be guilty of the offense.
(ii) A person shall not be guilty of
an offense by virtue of this section if he proves that
the act constituting the offense was committed by a
person other than himself and without his knowledge or
connivance and that he exercised all due diligence to
prevent the commission of the offense having regard to
all the circumstances.
Section 40. Smuggling
A person who: -
(a) in contravention of any
provision of this Act carries or attempts to carry
anything into or out of a free zone; or
(b) conceals anything with intent to
illegally carry it into or out of a free zone,
commits an offense an is liable on
conviction to imprisonment of not less than three months or more
than five years.
Section 41. Regulations
(i) The Minister may take
regulations for the effective implementation of this Act
including regulations which exempt licensed enterprises
from the provisions of existing laws and regulations.
(ii) Regulations may provide for
offenses and prescribe penalties for contravention which
shall not exceed a fine of 2 million cedis or
imprisonment for a term not exceeding twelve months or
Section 42. Repeal
The Ghana Industrial Free Zone authority
Decree 1979 (S.M.C.D. 157) is hereby repealed.
Section 43. Interpretation
In this Act unless the context otherwise
"Center" means the Ghana
Investment Promotion Center;
"Commissioner" means the
Commissioner of Customs, Excise and Preventive Service;
"enterprise" means an industry,
project, undertaking or business for commercial purposes or any
part of it;
"free zone" means an area or
building declared as a free zone by publication in the Commercial
and Industrial Bulletin and includes single factory zones, free
port, free airport, free river or lake port;
"developer" means a person who
acquires a free zone area and is licensed for its use or uses it
for operations allowed under this Act or rents or sells it or
provides services to enterprises which wish to carry on or are
carrying on business within the zone and included agents or
subcontractors of the developer;
"domestic enterprise" means am
enterprise incorporated in Ghana and operating outside a free
"goods" include both animate
and inanimate thing;
"importer" and "exporter"
means respectively owner or person for the being in possession of
or beneficially interested in any goods at the time of the
importation or exportation;
"Minister" means Minister
responsible for Trade and Industry;
"single factory zone" means a
factory or building declared as a free zone;
"national exporter" means any
exporter other than a free zone exporter;
"Revenue Service" means Customs,
Excise and Preventive Service and the Internal Revenue Service.