Many local entities enter into technology transfer agreements with foreign entities for the use of their technologies and services in Ghana. This write up focuses on frequently asked questions and some key points to note regarding the registration of technology transfer agreements in Ghana.
1. What is a Technology Transfer Agreement (TTA)?
A TTA is an agreement between a company in Ghana and a foreign company in respect of a transfer of technology, industrial property rights, know-how and the provision of technical expertise and management services.
2. What is the duration of a TTA?
A TTA is valid for an initial period of 18 months to 10 years and can be renewed subsequently for 5-year periods.
3. What are the key legislations governing TTAs?
The Ghana Investment Promotion Centre Act, 2013 (Act 865) and Technology Transfer Regulations 1992, (LI 1547) are the key legislations for TTAs.
4. When does an agreement qualify as a TTA?
An agreement qualifies as a TTA, if it involves either one or a combination of the following:
- an assignment, sale and licensing of all forms of industrial property rights e.g., patents, industrial designs, trademarks;
- the provision of technical expertise;
- the provision of know-how (information, data whether patentable or not including technical/commercial information relating to research, design, development manufacture, use or sale); and
- the provision of managerial services and personnel training.
5. Which regulatory authority is responsible for the registration and approval of TTAs?
The Ghana Investment Promotion Centre (GIPC) is the responsible entity. On a renewal of a TTA, the approval of the sector regulator will be required in addition to GIPC approval.
6. When does a TTA become effective?
A TTA becomes effective on the date of registration with the GIPC.
7. What is the effect of an unregistered TTA?
An unregistered TTA is illegal and unenforceable and no funds may be transferred under it.
8. When can a transferee transfer funds under a TTA?
A transferee may only transfer funds or charges under a TTA which has been registered and approved by the GIPC.
9. Can the parties to a TTA choose any law to govern a TTA?
The governing law of a TTA must be the laws of Ghana, although parties can include arbitration provisions of their choice.
10. What are some common “Dos” and “Don’ts” in a TTA?
- Do not draft a TTA with an indefinite duration or a duration of more than 10 years in the first instance;
- Do not execute a TTA or insert a commencement date prior to the date of the registration and approval of the TTA by the GIPC;
- The TTA must comply with transfer pricing regulations under Ghanaian tax laws; and
- Seek the advice of local legal counsel when preparing a TTA.
11.What is the procedure to register a TTA?
To register a TTA, the prescribed form (Form GIPC/T1) must be completed and submitted to the GIPC with supporting documents, which include:
- certified true copies of a certificate of incorporation of the local company;
- a copy of the Constitution of the local company;
- audited accounts of the local company;
- the TTA; and
- any other document that the GIPC may require.
12.How long does it take to process an application?
It takes between 4 to 6 weeks to process an application to register a TTA, which is compliant with GIPC legislation.
13. How much is the application fee?
An applicant will be charged a non-refundable application fee of GHS11,760 (approx. $1980) for an initial registration and GHS17,640 (approx. $2965) for a renewal.
14. What other costs are involved in registering a TTA?
An approval fee is chargeable on the registration of the TTA. This fee is based on the duration and the transfer value per annum.
15. Are there any restrictions on fees chargeable under a TTA?
The maximum fees that may be charged under a TTA are: Payments that are restricted under a TTA
Royalties for intellectual property
0-3% of net sales
0-6% of net sales
0-2% of net sales
0-2% of profit before tax
Royalties (know-how, patents & other industrial property rights)
0%-6% of net sales
Technical service/assistance (including know how)
0-5% of net sales
0-2% of profit before tax. Charges are pro-rated according to the shareholding in the Ghanaian company
Management services (in addition to patents, know-how and trademarks)
8% of net sales
16. Can a Transferring party charge more than the prescribed fees?
No. The GIPC’s approval is required to charge more than the prescribed fees.
17. Can a TTA have tax gross-up provisions?
No, a TTA cannot have tax gross-up provisions. The transferring party must pay any taxes due on fees.
18. Can the terms of a TTA be varied?
The terms of a TTA may be varied with the prior written approval of the GIPC.
19. Can a TTA be assigned?
An assignment of a registered TTA can only be done with the prior approval of the GIPC.
20. Can the transferring party to a TTA delegate any of its obligations under a TTA?
A transferring party to a TTA is directly responsible for its obligations under a registered TTA; a delegation of obligations with recourse to the delegating party is allowed under limited circumstances.