01 Oct Technology Transfer Agreements In Ghana: What Businesses Need To Know
Technology Transfer Agreements (“TTA”) play an important role in Ghana’s economic and industrial development. They enable Ghanaian businesses to access foreign technology, specialized expertise and technical skills that may not be readily available in Ghana. This can improve productivity, efficiency and competitiveness.
Ghana’s technology transfer regime is receiving renewed attention following the enactment of the Ghana Investment Promotion Authority Act, 2026 (Act 1173). The new legislation highlights the importance of complying with Ghana’s TTA requirements, particularly the registration of arrangements that qualify as TTA. For businesses operating in Ghana, understanding when a commercial arrangement constitutes a TTA and the regulatory requirements that follow is therefore essential. This article examines the key requirements for structuring, registering and maintaining a compliant TTA in Ghana.
The primary laws governing TTAs in Ghana are the Ghana Investment Promotion Authority Act, 2026 (Act 1173) and the Technology Transfer Regulations, 1992 (L.I. 1547).
Other relevant laws include:
a. Foreign Exchange Act, 2006 (Act 723): Act 732 regulates international payment transactions and foreign exchange transfers. In the context of TTAs, it regulates the transfer of fees charged under the TTA to a foreign enterprise or entity.
b. Transfer Pricing Regulations, 2020 (L.I. 2412): L.I. 2412 applies to a TTA between parties who are in a controlled relationship. Parties are considered to be in a controlled relationship where ;
(i) one party participates directly or indirectly in the management of the other party;
(ii) one party holds directly or indirectly at least twenty-five percent of the voting power, rights to income or capital of the other party (control); or
(iii) where the management or control of the said parties is directly or indirectly exercised by the same persons.
L.I. 2412 requires that a TTA between parties in a controlled relationship is conducted on an arm’s-length basis, ensuring that the terms and fees are comparable to terms that would have been agreed on between independent parties.
c. Applicable tax laws of Ghana: The tax laws, among other things, determine the withholding tax obligations arising from payments of fees under TTAs.
According to section 59 of Act 1173, a TTA is an agreement with a duration of at least 12 months between a foreign enterprise or entity which is duly incorporated or registered in its country of origin (“transferor”) and an enterprise or entity which is duly incorporated or registered in Ghana (“transferee”) and involves one or more of the following:
a. the assignment, sale or licensing of a foreign patent, a foreign trademark and other forms of foreign industrial property rights that are registered in accordance with the laws of Ghana or under any other arrangement recognized and enforceable under the laws of Ghana;
b. the provision of foreign technological knowledge such as software, instructions, guides, models, formulae and feasibility studies;
c. the provision of foreign technical advisory services, foreign technical assistance or any other technical service; and
d. the provision of foreign managerial personnel in Ghana for the day-to-day management or administration of the enterprise incorporated or registered in Ghana.
TTAs can therefore be broadly categorized into four types. The first covers the grant of industrial property rights such as patents, trademarks, tradenames and industrial designs. The second involves the transfer of unpatented proprietary information and data, such as software, trade secrets or proprietary processes. The third covers the provision of expert advice and services related to a specific technical process or project. The fourth relates to management services, involving the
provision of key personnel for the day-to-day management and strategic direction of the Ghanaian enterprise or entity.
An enterprise that enters into a TTA must register the TTA with the Ghana Investment Promotion Authority (“GIPA”). Registration is an important step because an unregistered TTA is not legally enforceable. In other words,
a TTA does not take effect until it has been registered.
A TTA must comply with the requirements prescribed under Act 1173 and L.I. 1547 before it will be registered by GIPA. Key requirements include the following:
a. An initial agreement must be for a period of at least 12 months and not more than 5 years.
b. The TTA must state that the agreement comes into force on the date of registration of the agreement by GIPA.
c. A TTA may be renewed for subsequent terms, each term not exceeding 5 years. The renewal must first be approved by the regulator of the relevant sector to which the agreement relates, following which the renewed TTA must be registered with GIPA.
d. Amendments or assignments under a TTA must be done with the prior approval of GIPA.
e. The TTA must state that the transferor is responsible for the payment of taxes on royalties or fees.
f. The fees under a TTA must fall within the applicable thresholds stated in LI 1547. A yearly forecast of the fees to be transferred for the entire duration of the TTA must be provided in the agreement.
g. The TTA must include a clause imposing an obligation on the transferor to provide the requisite training for the transferee and its personnel in the effective utilization of the technology, and there must be attached to the TTA a detailed training schedule which must be adhered to by the transferor in the provision of the training.
h. The TTA must state that the agreement is governed by the laws of Ghana.
The regulatory framework also prohibits certain contractual provisions. GIPA will decline to register a TTA that contains prohibited clauses stated in LI 1547, including clauses :
a. on the provision of technology which is freely and easily available in Ghana.
b. which restrict the volume of production or the sale of the transferee’s products in Ghana.
c. which prohibit the exportation of the transferee’s products to specific geographical areas except to areas where the transferor has previously granted exclusive rights to third parties.
d. which require the transferee to export exclusively through the transferor or on unfavorable terms.
e. which require the transferor’s prior permission before any export transaction is made.
f. which impose an obligation on the transferee to acquire its inputs including equipment or raw materials exclusively from the transferor or any other person or a specific source, unless such inputs are not commercially available elsewhere or such inputs are special to the technology supplied or are required to meet the specifications of products to be produced either under license or trademark.
g. which provide for the obligatory transfer of improvements developed by the transferee in respect of the licensed technology to the transferor.
h. which require payment for patent and other industrial property rights after their expiration, termination or invalidation.
i. which prohibit the manufacture and/or sale of products based on the technology transferred on the expiration of the agreement, or prohibit the use of technical know-how acquired from the use of the licensed technology after the expiry of the agreement.
j. which restrict research and development activities of the transferee to improve and adapt the licensed technology.
L.I. 1547 prescribes limits on the fees that can be charged under a TTA. The applicable thresholds are as follows :
a. Royalties for Industrial Property Rights: Up to 6% of net sales .
b. Technological Knowledge: Up to 2% of net sales.
c. Technical Advisory Services/Assistance: Up to 3% of net sales
d. Management services: Up to 2% of profit before tax. It must be noted that this percentage must be reduced pro rata if the transferor has 60% or more of the equity share capital of the transferee.
e. When a TTA combines management or technical services with other industrial property rights, the total fee is capped at 8% of net sales.
A company may exceed the fee thresholds with the prior written approval of the GIPA. An application to exceed the fee must be justified and demonstrate that the value of the technology or service warrants the higher charges. GIPA will carefully review the requests to ensure they are reasonable and in the best interest of the Ghanaian economy.
Registration Process for Technology Transfer Agreements
The registration of a TTA with GIPA involves the following steps:
1. The applicant must pay a non-refundable application processing fee as set out in the Fees and Charges Legislation. The processing fee is currently USD 700.00 and is payable by banker’s draft in the name of GIPA.
2. The applicant must complete the TTA application form and submit the completed form, required documents and proof of payment to the front desk of GIPA. The required documents are:
a. Certified true copy (by the Office of the Registrar of Companies) of Certificate of Incorporation.
b. Three original/certified true copies (by a Notary Public) of the agreement to be registered.
c. A detailed training schedule.
d. A yearly forecast of fees payable to the transferor per annum for the duration of the agreement.
e. Certified true copy (by the Office of the Registrar of Companies or a Notary Public) of Industrial property
registration(s) if applicable.
f. Certified Audited Financial Statements for the five most recent years of the Transferee company.
g. Certified true copy (by the Office of the Registrar of Companies) of Company Regulations.
h. Cover letter from the applicant addressed to the Chief Executive Officer of GIPA.
3. The TTA Department at GIPA will review the agreement to ensure it complies with Act 1173 and L.I. 1547.
4. If the agreement is compliant, the forecast of fees is analyzed to determine the applicable approval fees.
5. The applicant is then formally notified of the total amount payable to the GIPA as approval fees. The approval fees are payable either by Banker’s Draft or direct bank transfer. Evidence of the payment must be submitted to the GIPA for verification.
6. Upon confirmation of payment, the TTA is officially registered, and the GIPA issues the Certificate of Registration.
7. GIPA approval letter is dispatched to the Bank of Ghana, the Ghana Revenue Authority, and the applicant, officially completing the registration process.
The processing time for a TTA application that is compliant is typically 4 to 6 weeks. However, where the submitted documents are incomplete or the agreement contains prohibited clauses, GIPA will return the application with a legal opinion for amendment.
Registration of a TTA does not bring the parties’ compliance obligations to an end. GIPA monitors registered TTAs to ensure that the parties continue to comply with the terms of the agreement and the applicable regulatory requirements.
Companies with registered TTAs are required to submit Post Implementation Progress reports to the GIPA annually. These reports typically include:
(a) Proof of provision of services.
(b) Written confirmation from auditors that fees transferred are in conformity with the registered TTA.
Accordingly, businesses should maintain proper records of the services provided, payments made and other activities undertaken under the TTA to facilitate ongoing compliance and reporting.
Failure to register a TTA or comply with the terms of a registered agreement can have significant legal, financial and tax consequences.
Firstly, the enterprise in Ghana is prohibited from transferring fees under an unregistered TTA. Banks are prohibited from making payment to a person or an enterprise outside Ghana in respect of a TTA unless a certificate of registration and a copy of the TTA certified by GIPA are presented to the bank. Secondly, the fees and charges in relation to an unregistered TTA are not deductible as an expense for income tax purposes under the Income Tax Act, 2015 (Act 896).
Additionally, a person or an enterprise that transfers or facilitates the transfer of a fee and a charge under an unregistered TTA, or that is inconsistent with the terms of a registered TTA, is liable to pay to GIPA an administrative penalty of not less than GHS 120,000.00 and not more than GHS 240,000).00. Where the contravention continues, an additional administrative penalty of not less than GHS 12,000.00 and not more than GHS 24,000 shall apply for each month during which the contravention continues.
These consequences underscore the importance of registering TTAs before payments commence and ensuring that payments made under a registered agreement remain consistent with its approved terms.
TTAs play an important role in facilitating the transfer of technology, technical expertise and management skills to Ghanaian enterprises. However, TTAs are subject to regulatory requirements. Businesses should therefore ensure that TTAs are carefully structured, registered and continuously monitored for compliance. Ultimately, proper compliance protects the parties while ensuring that technology transfer contributes meaningfully to the development of Ghanaian businesses and the wider economy.
Author:
Christian Konadu Odame
Legal Associate