What Is Due Diligence and Why It Matters in Ghana

Due diligence is the legal process of investigating an investment before money changes hands. For foreign investors and diaspora clients, due diligence in Ghana is not optional. It is the most reliable way to confirm ownership, legality, and risk exposure.

Failure to conduct proper due diligence can result in:

• Loss of investment funds

• Property disputes

• Invalid contracts

• Regulatory penalties

• Years of costly litigation

1. Confirm the Legal Identity of the Seller or Business

The first step in any due diligence checklist for foreign investors in Ghana is verifying who you are dealing with.

This includes:

• Confirming legal identity

• Verifying authority to sell or contract

• Checking company registration details where applicable

Many investment scams succeed because buyers rely on trust instead of verification.

2. Conduct a Lands Commission Search (For Property Investments)

For land or property investments, a search at the Lands Commission is essential to confirm:

• Ownership status

• Existing leases or encumbrances

• Pending disputes or court actions

Skipping this step is one of the most common and costly mistakes foreign investors make.

3. Verify Title, Boundaries, and Site Plans

Even where land appears registered, foreign investors must verify:

• Accuracy of site plans

• Boundary alignment

• Overlapping claims

Boundary disputes are a frequent cause of litigation in Ghana.

4. Check Litigation and Dispute History

A proper due diligence checklist for foreign investors in Ghana must include litigation searches to confirm whether:

• The land or company is subject to court action

• The seller is involved in ongoing disputes

• There are injunctions affecting the investment

Ignoring litigation checks exposes investors to serious legal risk.

5. Confirm Regulatory and Sector Compliance

Some sectors in Ghana require special approvals or are restricted to citizens. Due diligence ensures:

• The business activity is lawful

• The sector is open to foreign investors

• Required permits or licences exist

Operating in restricted sectors can lead to shutdowns and penalties.

6. Review Contracts and Agreements Carefully

Foreign investors should never rely on informal or template agreements. Legal review ensures:

• Terms are enforceable

• Lease periods comply with the law

• Payment terms are clear

• Dispute resolution clauses are included

Poorly drafted agreements often fail when disputes arise.

7. Verify GIPC and Corporate Compliance

For business investments, due diligence includes checking:

• Company incorporation status

• GIPC registration compliance

• Capital requirements

• Shareholding structure

Non-compliance with GIPC requirements can invalidate operations and expose investors to penalties.

8. Conduct Financial and Asset Verification

Where applicable, due diligence should include:

• Verification of assets

• Confirmation of liabilities

• Review of financial records

This step protects investors from hidden debts and misrepresentation.

9. Ensure Proper Registration After Purchase

Due diligence does not end at signing. Registration of land interests or corporate changes is essential to:

• Secure legal recognition

• Prevent competing claims

• Protect long-term ownership

Unregistered interests are vulnerable and unsafe.