Ghana Introduces Strict Beneficial Ownership Disclosure Regulations
Enhancing Transparency and Combating Tax Abuse and Money Laundering
Accra, GHANA - The Government of Ghana has introduced robust disclosure requirements for Ultimate Beneficial Owners (UBOs) of companies, trusts, and partnerships to combat money laundering activities and increase investor confidence in the country.
What are the New Regulations?
The Companies Act 2019, which came into effect last year, requires companies to disclose information on their beneficial owners, including:
- Name: The name of the UBO
- Address: The address of the UBO
- Nature of ownership or control: The nature of the UBO’s ownership or control
- Tax identification number: The tax identification number of the UBO
- Employment details: Employment details of the UBO, including job title and employer
- Marital status: Marital status of the UBO
- Social security number: Social security number of the UBO
The disclosure obligation is on the local entity, not the ultimate beneficial owner.
Why are these Regulations Necessary?
These regulations follow international requirements to comply with global anti-money laundering standards. At least 40% of African countries have similar laws or regulations in place, with many updating their legislation to compel disclosure.
Country-by-Country Differences in Disclosure Requirements
Investors in Africa must now anticipate country-by-country differences in disclosure requirements for investees and local companies. While stringent transparency laws boost investor confidence by reducing the risks of money laundering, they may also interfere with binding confidentiality agreements.
Experts say that foreign UBOs may not be subject to local statutes, making it the local entity that is liable for penalties from regulators. As a result, investors must carefully consider the implications of disclosure requirements on their operations in Ghana and across the continent.
Implications for Businesses Operating in Africa
The new regulations are seen as a positive step towards increasing transparency and combating illicit financial flows in Africa. However, they also highlight the need for careful consideration of the implications for businesses operating in the region.
As one expert noted, “Investors must now navigate complex disclosure requirements on a country-by-country basis to avoid hindrances in operations.” With Ghana’s new regulations in place, investors are advised to review their agreements and consider the potential impact on their business dealings in Africa.