There was a time when, as a child, I used to get letters from my sister with US$10 or US$20 in the mail. Even though my mother would always “hold” the money for me (you already know what this means), it was always exciting to know that I was getting foreign currency and I would brag to my classmates about it all the time. Though the money was coming from the USA, it was a form of repatriation of foreign currency from my sister to me.
In the same vein, companies that do business in Ghana may, as part of their business operations, repatriate foreign currency out of Ghana for various reasons. This article therefore seeks to discuss briefly, repatriation of foreign currency by a company from Ghana.
REPATRIATION OF FOREIGN CURRENCY BY A COMPANY
1. Generally, a company in Ghana that wishes to repatriate foreign currency- its equity capital or otherwise, is required to do so through a recognised commercial bank. The payment should be supported by underlying documents of the transaction in order to be effected by the bank. It is the responsibility of the bank to request for supporting documents relevant to the transaction before undertaking such a transaction. However, individuals (but not companies) can make personal remittances of up to US$10,000 a year, without supporting documentation.
2. Transactions of a company which require repatriation of foreign currency, for which supporting documents will be required, include:
a. payment of dividends/profits;
b. repayment of loans;
c. payment for goods and services;
d. proceeds of shareholders upon liquidation of the company;
e. any other external financial obligations of the company.
3. Where the repatriation of foreign currency is payment with respect to services:
a. the payment being made is in accordance with transfer pricing regulations under Ghanaian law (that is, transaction being paid for should have been done at arm’s length); and
b. if the transaction involves the payment of services such as (i) the assignment, sale and licensing of all forms of industrial property, (ii) transfer of know-how, (iii) management services, and (iv) the provision of technical services, it could constitute a technology transfer agreement which requires registration by the Ghana Investment Promotion Centre before money can be accrued and repatriated under the relevant agreement. The table below shows the amounts payable as fees under a technology transfer agreement:
Foreign Exchange Act, 2006 (Act 723)
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