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FREE ZONE ACT, 1995 (ACT 504)
As amended
ARRANGEMENT OF SECTIONS
Section
PART I—ESTABLISHMENT OF FREE ZONES
BOARD AND RELATED PROVISIONS
1. Establishment of Free Zones
Board.
2. Composition of the Board.
3. Functions of the Board.
4. Tenure of Office of Members of
the Board and Allowances.
5. Meetings of the Board.
6. Committees of the Board.
PART II—ESTABLISHMENT OF FREE
ZONES; DEVELOPERS OF FREE ZONES
7. Declaration of Free Zone.
8. Qualification of Free Zone
Developers.
9. Rights and Responsibilities of
a Free Zone Developer.
10. Sub-Contracting by Developers.
PART III—FREE ZONE ENTERPRISES
11. Export Free Zone Enterprises.
12. Qualification of Enterprise.
13. Rights and Responsibilities of
a Free Zone Enterprise.
14. Change of Line of Production.
PART IV—LICENSING
15. Application for Licences to
Develop a Free Zone or operate an
Enterprise in a Free Zone.
16. Grant of Licence to Developers
and Enterprises.
17. Conditions of Licence.
18. Revocation.
19. Register.
20. Transfer of Licence.
PART V—IMPORT AND EXPORT
21. Non-Application of Import Laws
to Free Zones.
22. Exemption from Taxes of Import
into Free Zone Area.
23. Sales in National Customs
Territory.
24. Sales from National Customs
Territory to Free Zones.
25. Entry into Free Zone by
Officers.
26. Responsibility of Customs,
Excise and Preventive Service.
27. Missing Dutiable Goods.
PART VI—INCENTIVES
28. Tax Concession.
29. Investors.
30. Investment Guarantees,
Transfer of Profits.
31. Guarantee against
Expropriation.
32. Dispute Settlement Procedures.
33. Operation of Foreign Currency
Account.
34. Employment in Free Zones.
35. Residence in Free Zones and
Identity Cards.
PART VII—ADMINISTRATION AND
MISCELLANEOUS PROVISIONS
36. Secretariat of the Board.
37. Monies for Expenditure of the
Board.
38. Annual Report.
39. Offences by Corporate Bodies.
40. Smuggling.
41. Regulations.
42. Repeal.
43. Interpretation.
THE FIVE HUNDRED AND FOURTH
ACT OF THE PARLIAMENT OF THE
REPUBLIC OF GHANA
ENTITLED
THE FREE ZONE ACT, 1995
AN ACT to enable the establishment
of free zones in Ghana for the
promotion of economic development;
to provide for the regulation of
activities in free zones and for
related purposes.
DATE OF ASSENT: 31ST AUGUST, 1995
BE IT ENACTED by Parliament as
follows—
PART I—ESTABLISHMENT OF FREE ZONES
BOARD AND RELATED PROVISIONS
Section 1—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 the "Board”.
Section 2—Composition of the
Board.
(1) 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 sector.
(2) 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 licences
under this Act by providing
services for obtaining other
relevant licences, 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
enterprises;
(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.
(1) A member of the Board other
than the Chairman shall hold
office for a term of four years
and is eligible for
re-appointment.
(2) 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.
(3) Members of the Board shall be
paid such allowances as the
Minister responsible for Finance
shall determine.
Section 5—Meetings of the Board.
(1) 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 month.
(2) 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.
(3) The quorum for a meeting of
the Board shall be five of the
members.
(4) 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.
(5) 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.
(6) 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.
(7) 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.
(8) A member of the Board who
infringes subsection (7) of this
section is liable to be removed
from the membership of the Board.
(9) Except as otherwise provided
in this section, the Board shall
regulate the procedure for its
meetings.
Section 6—Committees of the Board.
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.
PART II—ESTABLISHMENT OF FREE
ZONES; DEVELOPERS OF FREE ZONES
Section 7—Declaration of Free
Zone.
(1) 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,
seaport, or lake port as a free
port.
(2) A declaration under subsection
(1) of this section shall specify
the area and the scope of
activities in the free zone
concerned.
Section 8—Qualification of Free
Zone Developers.
(1) No person shall—
(a) develop;
(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
Incorporated Private Partnership
Act, 1962 (Act 152).
(2) The body corporate or
partnership shall be licensed to
develop, manage, or develop and
manage the free zone under this
Act.
Section 9—Rights and
Responsibilities of a Free Zone
Developer.
(1) 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.
(2) It shall be the
responsibility of a developer to—
(a) construct and maintain
buildings, warehouses, 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 zone;
(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
Developers.
(1) A licensed developer may
undertake or sub-contract the
management, control and promotion
of the free zone development in
the declared area.
(2) The developer shall apply for
a licence for any person to whom a
sub-contract has been given by it
under subsection (1).
(3) 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
Section 11—Export Free Zone
Enterprises.
Subject to the provisions of this
Act any person may apply for a
licence to establish an enterprise
in a free zone.
Section 12—Qualification of
Enterprise.
(1) No person shall carry on a
trade, business or industry within
a free zone unless it is
registered under—
(a) the Companies Code 1963 (Act
179); or
(b) the Incorporated 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.
(2) 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.
(1) 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 environmentally
hazardous.
(2) A free zone enterprise shall
be free to—
(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, relabel, finish,
handle, mix, combine, clean,
manipulate, restore, join,
transform, transit and tranship,
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
Production.
A
free zone enterprise may change
its production lines and process
as often as it considers necessary
subject to prior approval of the
Board.
PART IV—LICENSING
Section 15—Application for
Licences to Develop a Free Zone or
operate an Enterprise in a Free
Zone.
(1) An application for a licence
to develop, manage or establish an
enterprise in a 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 or
the trade, business or industry
for which the licence is required;
and
(d) be accompanied with such
information as the Board may
require.
(2) 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 Licence to
Developers and Enterprises.
(1) The Board may grant a licence
authorising—
(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.
(2) No licence 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. 225);
or
(b) the business of insurance
unless the applicant is also
registered under the Insurance Law
1989 (P.N.D.C.L. 227).
(3) A licence issued under this
section shall be under the
signature of the Chairman of the
Board.
Section 17—Conditions of Licence.
The Board may attach to a licence
such conditions as it thinks
appropriate concerning employment
skills, development, impact on the
environment, creation of job
opportunities and degree of export
orientation.
Section 18—Revocation.
(1) The Board may revoke a licence
where it is satisfied that there
has been a breach of condition
attached to the licence.
(2) The Board may upon the request
of the licensee vary at any time
the conditions attached to the
licence.
(3) Before revoking a licence,
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.
(1) The Board shall establish and
maintain a register of licences
granted under section 16 of this
Act.
(2) There shall be entered in the
register in respect of each
licence—
(a) the name of the person to whom
the licence is granted: and
(b) the zone to be developed or
managed or both or the trade,
business or industry to which the
licence relates.
(3) 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 Licence.
No licensee shall transfer a
licence issued in respect of it to
any other person without the prior
approval of the Board.
PART V—IMPORT AND EXPORT
Section 21—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 to—
(a) the bringing of goods directly
from a country outside Ghana into
a free zone;
(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
Import into Free Zone Area.
(1) The imports of a free zone
developer, sub-contractor or
enterprises into a free zone or
single-factory zone shall be
exempt from direct and indirect
taxes and duties.
Section 23 —Sales in National
Customs Territory.
(1) The Minister may by
legislative instrument authorise
the sales 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 customs territory.
(2) Sales of goods from free zone
enterprises or 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.
(3) 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 and single-factory zones
authorised to be sold to the
national customs territory and as
such shall be subject to the
applicable duties and taxes.
(4) An instrument issued under
subsection (1) of this section
shall provide penalties for
contravention of any authority
provided in it.
Section 24—Sales from National
Customs Territory to Free Zones.
(1) 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.
(2) A domestic enterprise shall be
eligible to benefit from the
prevailing export incentives
available to a national exporter
and shall not require an export
licence for sale of any goods and
services to enterprises in the
free zone or single-factory zone.
(3) 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 by
Officers.
(1) An authorised officer of any
of the Revenue Services, member of
the Police Force or an officer
authorised 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.
(2) An officer exercising any
power of entry or inspection shall
on request produce his
authorisation.
(3) Any person who prevents or
obstructs an entry authorised by
subsection (1) of this section or
attempts to do so, commits an
offence and is liable on summary
conviction to a fine not exceeding
US$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.
(1) 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 of Ghana.
(2) The Minister after
consultation with the Minister
responsible for customs and excise
and the Commissioner of Customs,
Excise and Preventive Service may
by legislative instrument make
regulations—
(a) adopting or modifying for the
purposes of this Act any of the
regulations relating to customs
operations;
(b) governing the movements of
persons, vehicles or goods into
and out of a free zone, from and
out to other parts of the customs
territory;
(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 Goods.
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.
(1) Free zone developers and
enterprises granted licences 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
operation.
(2) The income tax rate after ten
years shall not exceed a maximum
of 8 per cent.
(3) A shareholder shall be
exempted from the payment of
withholding taxes on dividends
arising out of free zone
investments.
Section 29—Investors.
(1) A foreign investor may take
and hold a maximum of 100 per cent
of the shares in any free zone
enterprise.
(2) A domestic investor may take
and hold a maximum of 100 per cent
of the shares in any export free
zone enterprise.
(3) Foreign and domestic investors
shall have equal status within the
export free zones.
Section 30—Investment Guarantees,
Transfer of Profits.
Subject to this section any
enterprise in a free zone shall be
guaranteed unconditional transfer
through any authorised dealer bank
in freely convertible currency of—
(a) dividends or net profits
attributable to the investment;
(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—Guarantee against
Expropriation.
(1) 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.
(2) 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
compensations; and
(b) a right of access to the High
Court for the determination of the
investor's interest or right and
the amount of compensation to
which he is entitled.
(3) Any compensation payable under
this section shall be paid without
undue delay and authorisation for
its repatriation in convertible
currency, where applicable, shall
be issued.
Section 32—Dispute Settlement
Procedures.
(1) 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 settlement.
(2) 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
of 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 parties; or
(c) in accordance with any other
national or international
machinery for the settlement of
investment disputes agreed to by
the parties.
(3) 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 shall
prevail.
Section 33—Operation of Foreign
Currency Account.
(1) Each free zone enterprise
shall be permitted to operate a
foreign currency account with
banks in Ghana.
(2) The terms and conditions under
which the accounts shall be
operated shall be set out in the
licence granted under section 16
of this Act.
(3) 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
Zones.
(1) 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.
(2) Work and resident permits
shall be required for any foreign
national who wishes to live in
Ghana and work in a free zone.
(3) Application for work and
resident 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 Service.
(4) A foreign employee shall pay
appropriate tax to the Government
of Ghana on income earned in Ghana
including income earned in the
free zone during that period of
work in accordance with existing
income tax legislation and subject
to the provisions of any double
taxation agreement between the
Government of Ghana and the
Government of the foreign
employee.[As substituted by Free
Zone (Amendment) Act, 2002 (Act
618)]
Section 35—Residence in Free Zones
and Identity Cards.
(1) The Board shall issue identity
cards to all employees of licensed
operators in a free zone.
(2) A person who enters or leaves
a free zone may be subject to
inspection by any person
authorised by the Board to do so.
(3) A person who obstructs or
prevents any person authorised by
the Board in performance of his
functions under subsection (2) of
this section commits an offence
and is liable on summary
conviction to a fine not exceeding
US$500.00 or its equivalent in
cedis or to imprisonment for a
term not exceeding six months or
to both.
PART VII—ADMINISTRATION AND
MISCELLANEOUS PROVISIONS
Section 36—Secretariat of the
Board.
(1) The Board shall have a
Secretariat.
(2) 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.
(3) The Minister may by
legislative instrument make
regulations on the functions of
the Secretariat.
Section 37—Monies for 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—Offences by Corporate
Bodies.
(1) Where an offence 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 offence; and
(b) where the body of persons is a
firm or partnership every partner
shall be considered to be guilty
of the offence.
(2) A person shall not be guilty
of an offence by virtue of this
section if he proves that the act
constituting the offence 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
offence 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 offence and is liable
on conviction to imprisonment of
not less than three months or more
than five years.
Section 41—Regulations.
(1) The Minister may make
regulations for the effective
implementation of this Act
including regulations which exempt
licensed enterprises from the
provisions of existing laws and
regulations.
(2) Regulations may provide for
offences and prescribe penalties
for contravention which shall not
exceed a fine of ¢2 million or
imprisonment for a term not
exceeding twelve months or both.
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 requires—
“Centre” means the Ghana
Investment Promotion Centre;
“Commissioner" means the
Commissioner of Custom, 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 includes agents or sub
contractors of the developer;
"domestic enterprise" means an
enterprise incorporated in Ghana
and operating outside a free zone;
“goods” include both animate and
inanimate things;
"importer" and “exporter” mean
respectively owner or person for
the time being in possession of
or beneficially interested in any
goods at the time of the
importation or exportation;
“Minister” means the 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 Services” means the
Customs, Excise and Preventive
Service and the Internal Revenue
Service.
Date of Gazette Notification: 15th
September, 1995.
amended by
FREE
ZONE (AMENDMENT) ACT, 2002 (ACT
618)1
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