Introduction
In Ghana, Technology Transfer Agreements are entered into between businesses (referred to as the Transferee) and non-Ghanaian businesses (referred to as Transferors). The provisions of any technology transfer agreement in Ghana must comply with and be governed by the following laws:
- The Ghana Investment Promotion Center Act, 2013 (Act 865)
- The Technology Transfer Regulations, 1992 (LI 1547).
According to Law 865, all Technology Transfer Agreements must be reviewed and registered by the Ghana Investment Promotion Centre, which is the agency of the Government of Ghana that is responsible, among other things, for the registration and monitoring of all agreements technology transfer in Ghana.
Categories of Technology Transfer Agreements
Law 865 categorizes Technology Transfer Agreements into four (4) main forms:
- Agreements covering industrial property rights.
- Agreements for the provision of Technical Services/Assistance.
- Agreements covering the transfer of know-how.
- Agreements for the provision of Management Services
1. Agreements covering industrial property rights
These Agreements generally relate to the assignment, sale and licensing of all forms of industrial property, including licenses, trademarks, trade names, service marks, utility models and patents.
2. Technical Services/Assistance Agreements
These Agreements generally relate to the provision of technical expertise, e.g. feasibility studies, design diagrams, model instructions, guides or formulas.
3. Agreements covering the transfer of know-how.
These agreements generally concern the provision of technological know-how necessary for the acquisition, installation and use of machinery, equipment, intermediate goods or raw materials acquired by purchase, lease or other means.
4. Management Services Agreements.
These Agreements generally cover services related to the day-to-day running of a Ghanaian business by a foreign company.
Allowable fees for technology transfer agreements.
1. LI 1547 sets out a range of fees that a Transferor may charge for services provided to the Transferee. The range of fees depends on the type of services offered under a technology transfer agreement. These are the following:
2. The Technology Transfer Regulations also provide that any request to charge fees higher than the upper levels specified above is subject to the approval of the Ghana Investment Promotion Centre.
3. The Technology Transfer Regulations set out the definition of “Net Sales”, the measure used to determine some of the aforementioned fees. The definition of “net sales” is categorized into two:
- The first definition of “net sales” provided in LI 1547 applies to businesses engaged in the provision of products. “Net sales” is defined as the “ex-factory selling price of the product exclusive of sales tax and excise duties imposed by the Government.”
- The second definition of “net sales” provided in LI 1547 applies to businesses that provide services. Here, “net sales” is defined as “the net income derived from a service, less the cost of unloading or payment for any component, materials and supplies imported by the technology supplier other than the original capital equipment and the first round of components; materials, and supplies imported therefrom.”
Some key points to note about registering a technology transfer agreement
A prospective applicant for the registration of a technology transfer agreement should consider the following:
- The Contract must have a duration of no less than eighteen (18) months and no longer than ten (10) years. An agreement which is less than eighteen months does not qualify to be registered as a Technology Transfer Agreement and will not be subject to the provisions of Law 865 and LI 1547.
- For renewal applications, the duration of a technology transfer agreement must not exceed five (5) years.
- The Transferee, under a technology transfer agreement, is required to provide training related to the services provided to the Transferee.
Benefits of registering a technology transfer agreement in Ghana
Subject to the Foreign Exchange Act 2006 (Act 723), a company is guaranteed an unconditional transferability in the freely convertible currency of fees and charges in respect of a technology transfer agreement registered under the Ghana Investment Promotion Center Act.
