A Comprehensive Guide To Setting Up An NGO In Ghana

A non-governmental Organization (NGO) is a non-profit organization that is not controlled by the government and exists to address specific societal needs rather than to make a profit. NGOs are generally supported by a country’s government, but they can also be funded by private individuals or groups and foundations.

Some NGOs function locally while others function nationally and internationally, depending on the scope of their activities.

Difference Between NGO And Non-Profit Organizations

A non-profit organization is an organization that is established to achieve a goal in society and is not profit-oriented. This definition is broad and it includes an NGO. However, the notable difference between NGOs and NPOs is that an NGO is a legal entity, a non-governmental organization mostly funded by the government but excludes the government from its operations.

In the case of Non-profit organizations, extra funds from their various activities are used solely for the organization, unlike NGOs where extra funds could go to shareholders and owners of the organization. NPOs could be charity organizations, service organizations, or even NGOs.

How to Start An NGO in Ghana 

Below is a step-by-step guide on how to register a Non-Governmental Organization in Ghana.

Requirements for Registering NGO in Ghana

Below are the requirements for NGO registration in Ghana.

  • The name of the organization
  • The names of the directors
  • An official fee of Two hundred and Seventy Ghana Cedis. (GH₵ 270)
  • Particulars of Directors and Secretary (including names, nationality, age, residential address, and designation).
  • Name and address of Auditors

NB: The auditor or auditing firm must be credible.

  • Address of registered office, principal place of business

Cost of Registering NGO in Ghana

The total statutory cost for registering an external company in Ghana is 270 Cedis. This fee is payable directly to the Registrar General’s Department.

Procedures for Registering NGO in Ghana

Applicants may purchase a set of prescribed regulatory documents and a set of form 3s from the Registrar General’s Department at GH₵9.50 or download all business registration forms online; http://rgd.gov.gh/index.php/forms/.

To register a company limited by guarantee, these are the necessary steps that applicants must undertake;

STEP 1 – Company Name Search

A business name, also known as a company name, is simply a name or title under which an organization or other legal entity trades. If you want an exclusive right to that name, it is vital to do a name search of your intended name to check if a similar or identical name of an organization in your field does not exist before you can proceed.

In choosing the name for a Not-for-profit, one must make sure that the name is;

  • Meaningful– Does the name support the positioning and reflect the essence of the organization?
  • Relevant– Is the name relevant to the key audiences you are trying to reach. (target market, donors, volunteers)
  • Distinctive- Does the name stand out from the names of other organizations in your community?

The RGD may reject names that in its opinion are too similar to existing names, misleading, offensive, and undesirable, or violate existing trademarks. It is advisable to submit alternate company names. Be creative with the company names to avoid all being similar to existing company names or trademarks registered by the RGD.

STEP 2- Apply for a Tax Payer Identification Number (TIN)

All secretaries are mandated to secure a TIN to successfully process registration. Applicants would be required to provide the TIN of the board members and secretary on the form provided. In case the board members and secretary do not have it, there is a taxpayer identification number form applicants must complete to secure a tin.

Information required to complete an individual TIN form includes;

  • Name of applicant
  • Occupation
  • Photo ID details
  • Mother’s maiden name
  • Residential and postal
  • Contact of applicant

STEP 3 – Complete Company Limited by Guarantee Form 3

Information required to complete form 3 includes;

  • Company name
  • Principal or business activity of the company
  • Business address information
  • Principal place of business ( physical address of business)
  • Address of other places of business (if applicable)
  • Postal address of the company
  • Particulars of the Executive Council Members/Directors/Secretary (this may include; nationality, date of birth, occupation, and residential address)
  • Particulars of the auditor of the company

According to the Companies Act 179, all companies are required to have at least two initial directors and a secretary during the company registration process. At least one of the company directors or secretary must be a resident of Ghana.

STEP 4- Company Limited by Guarantee Regulations Form

Information is required to complete the regulations form.

  • Name of company
  • Nature of business
  • Name & TIN of members of the Executive Council
  • Address description of the subscriber. This includes;
    • Name
    • TIN
    • Date of birth
    • Nationality
    • Business occupation
    • Postal address of the applicant
    • Signature of applicant

STEP 5 – Submission of Forms

After completing the forms, an applicant should submit the forms to the office of the Registrar General Department with an official fee (in cash) of GH₵270. After a successful registration, the applicant would be given a Certificate of Incorporation, Certificate of Commencement, Form 3, and the Company’s Regulations.

Licensing Requirements for NGOs from the Department of Social Welfare

After registering the company with the Registrar General’s Department, all NGOs must register with Social Welfare before the commencement of business. Below are the procedures for registration with social welfare.

Apply for NGO status at the Department of social welfare which is the regulator of NGOs in Ghana, by submitting five copies of each of the following documents to the Accra Metropolitan Assembly (A.M.A.) within the District where the NGO is located

  • Certificates of incorporation and commencement of business.
  • Application letter on the organization’s official letterhead
  • The organization’s constitution
  • An NGO profile form
  • Memorandum of understanding between the NGO and the Government
  • Articles of incorporation from the country of origin
  • A social investigation report
  • A recommended letter from the district, municipal, or metropolitan assembly responsible for the area where your NGO is to be located.
  • Brochure or publication about your organization.
  • The district office (A.M.A) after inspection and evaluation writes a report to the national or regional office by submitting 3 copies of an endorsement letter of the Department of Social Welfare.

Taxes for Companies Limited by Guarantees in Ghana

Companies limited by guarantee including NGOs are exempted from paying corporate taxes. Corporate tax is the tax imposed on the net income of the company, in other words, it is a levy placed on the profit of a firm to raise taxes.

NGOs are exempted from paying Value Added Tax (VAT). This is because Companies limited by guarantee do not have tradable goods and services that attract VAT.

VAT is charged on the supply of goods and services in Ghana, imported goods, and the supply of imported services at a rate of 15%. When the NGO starts to buy and sell, the company is obliged to comply with the law and pay tax as the law demands.

However, employees of all companies limited by guarantee are mandated to pay income taxes on their earnings. The Pay-As-You-Earn (PAYE) tax is deducted from the employee’s income.

It is also the responsibility of the employer to file monthly tax returns on behalf of its employees.

In order not to be caught up with the law, Investors, businessmen and all charity organizations who wish to set up a business or company in Ghana must endeavor to comply with all the laws of Ghana. This adds up to the credibility of the individual and the company as a whole.