How to Register a Sole Proprietorship (One-Man Business) in Ghana

Starting a business in Ghana as an independent contractor (sole proprietor) is appealing because you have full control over your work, fewer formalities than for a full company, and lower starting costs. Many people find this business form flexible and fast.

It is relatively easy in Ghana compared to forming a company, but there is still bureaucratic paperwork: name reservation, registration with government bodies, tax registration, and compliance.

Main challenges include ensuring you comply with the required registrations (Registrar General’s Department, Ghana Revenue Authority, etc.), keeping proper records, meeting tax obligations, and possibly having to register for VAT if the turnover threshold is exceeded.

Main benefits are: you can start quickly, you maintain full ownership, you have simple governance, lower costs in setup and maintenance, and tax obligations are simpler than for companies.

Disclaimer: This article is for informational purposes only and is not a substitute for legal advice. Please always check official sources or seek professional guidance before taking action.

What is a sole proprietorship in Ghana?

In Ghana, a sole proprietorship is officially called “Business Name registration under a sole proprietorship” (often referred to informally as a “one-man business” or “business name registration”). Depending on context, it may also be referred to as:

• Sole trader
• Self-employed worker
• Independent contractor

These terms all describe the same business model: one person legally running a business without forming a separate company.

How does a sole proprietorship (Business Name registration under sole proprietorship) work in Ghana?

Sole proprietorship vs. other business structures in Ghana

While a sole proprietorship is the simplest and most common structure, it is not the only option available to entrepreneurs in Ghana. Some may choose to set up partnerships or form limited liability companies if they want to share ownership, reduce personal liability, or attract investors. The table below provides a comparison between sole proprietorships and private limited liability companies, which are the most common alternatives.

Step-by-step guide: How to register a sole proprietorship in Ghana

Step 1: Check your eligibility

To register as a sole proprietor in Ghana, you must be at least 18 years old. Both Ghanaian citizens with valid identification and foreign nationals with the appropriate permits or residency status are eligible.

Step 2: Choose your business name

You need to pick a unique name. Use the Name Search function of the RGD to check if the name is available.

Step 3: Gather required documents

Typical required documents include:

• Tax Identification Number (TIN) for the proprietor
• Valid ID (Ghana Card, passport, voter’s ID, or driver’s license)
• Proof of business address, such as utility bills or lease agreements
• Business activity description

You’ll also need Form A (for registering the business name) and other prescribed forms available from the RGD website.

Step 4: Register with the RG

You can register in person at an RGD office or online. Submit Form A and any other required documents, along with proof of identification and your Tax Identification Number. Complete the name reservation if needed.

Step 5: Pay registration fees and contributions

The registration fee for a business name is typically GHS 120, plus additional small charges for forms, renewals, or certified copies. Annual renewal currently costs GHS 70.

Step 6: Complete post-registration obligations

After registering your sole proprietorship, you will receive your Business Name Registration Certificate and a certified true copy of your registration forms. You must then register with the Ghana Revenue Authority (GRA) for tax purposes.

As a sole proprietor, you are responsible for issuing invoices for your business transactions. Invoices must clearly state your business name, registration number, and Tax Identification Number (TIN) to comply with GRA requirements. Every year, you are also required to renew your business name registration with the RGD by filing the annual renewal form and paying the renewal fee.

Financial and tax obligations for sole proprietors in Ghana

You are responsible for:

• Personal income tax: Sole proprietors in Ghana pay tax on business profits as part of their personal income. The progressive rates range from 0% to 35% depending on income level. Filing is done annually with the GRA. Advance payments or instalments may apply depending on your turnover.
• VAT: The standard VAT rate is 15% standard rate, and 3% simplified rate for retailers. Returns are filed monthly or quarterly through the GRA.
• Social security contributions: Sole proprietors are not automatically covered by the Social Security and National Insurance Trust (SSNIT) scheme, but they can make voluntary contributions under the informal or third-tier pension schemes. This provides retirement benefits and access to health coverage. Details are available from SSNIT.
• Record-keeping: You must maintain accurate accounts, including invoices, receipts, and expense records. By law, business and tax records must be kept for at least six years, as the GRA can request them during audits.
• Invoicing: All invoices must include your business name, registration number, TIN, client details, date, description of goods or services, and applicable VAT where relevant. Invoices must be issued sequentially and stored securely for compliance purposes.

Launch your contracting career and stay compliant with Deel

Registering as a sole proprietor gives you independence, but it also means handling taxes, invoices, and records on your own. Deel’s all-in-one platform helps you manage obligations without the stress. With Deel, you can:

• Automate invoicing and expense tracking with essential Bookkeeping tools
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• Spend your earnings in USD with the Deel Card
• Access funds early with Deel Advance
• Enjoy contractor perks from 150+ partners

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FAQs

What is the minimum capital required to start a sole proprietorship in Ghana?
There is no legal minimum capital requirement. You don’t need to deposit a set minimum sum. You just need to have whatever capital you need to operate.

Do sole proprietors need to register for VAT?
Yes, if your annual turnover exceeds the state's VAT threshold. If below that, VAT registration is not mandatory.

How much are the standard monthly or annual contributions?
For registration: a one-time business name registration fee of about GHS 120, plus small fees for forms and certified copies. Annual renewal costs GHS 70.

Can a sole proprietor hire employees?
Yes. If you hire employees, you will have employer obligations, including registering them for tax withholding, social security contributions, possibly PAYE (Pay As You Earn) deductions, and other employment laws.

How long does it take to register as a sole proprietor in Ghana?
Typically, around 5–7 working days, assuming all forms are submitted correctly and fees are paid.

Can foreign nationals register as sole proprietors in Ghana?
Yes, non-Ghanaians can register, provided they have legal permission or a permit to work or run a business in Ghana. They must also provide proper identification (passport, etc.) and fulfill all registration requirements.

Do sole proprietors need a separate business bank account?
It’s not strictly mandatory under the law, but highly recommended. Using a separate account helps with record-keeping, separating personal vs business finances, VAT and tax compliance, and for credibility with clients or partners.

What happens if I stop working as a sole proprietor?
You should deregister your business name via RGD, settle final tax liabilities with GRA, possibly close out VAT registration if relevant, and file final returns. Also, ensure any social security or employment obligations for any employees are fulfilled.

Are there any government incentives or reduced rates for new sole proprietors?
There are no widely published “first year discounts” specifically for sole proprietors in Ghana via RGD or GRA. However, some small businesses under certain thresholds may benefit from simpler cycles, lower inspection or regulatory burdens. Always check the latest announcements from GRA and the Ministry of Finance.

Do sole proprietors need to renew licenses yearly?
Yes. All sole proprietors must renew their business name registration annually. Renewal currently costs GHS 70. If your business falls within a regulated industry such as food, healthcare, or construction, you may also need to renew relevant sector-specific licenses with the appropriate government authority.

Can I use Deel as a sole proprietor to get paid by international clients?
Yes. Deel allows sole proprietors and freelancers in Ghana to receive payments from clients worldwide, in multiple currencies, with low fees and transparent exchange rates.

Does Deel generate compliant invoices for sole proprietors in Ghana?
Absolutely. Deel automatically generates invoices that meet Ghana’s legal and tax requirements, helping you stay compliant with local regulations and beyond.

Can Deel help me with taxes as a sole proprietor in Ghana?
Yes. Deel provides downloadable tax reports and payment records you can use when filing returns. While Deel doesn’t replace your accountant, it simplifies your record-keeping and compliance.

Does Deel offer contracts for freelancers and sole proprietors?
Yes. Deel includes contract templates that are compliant with local laws, so you can work with clients safely and professionally.

Can I access benefits through Deel as a sole proprietor?
Yes. Deel offers optional perks like health insurance, retirement savings plans, and other benefits that are usually only available to employees, giving freelancers more security.