A new study by the University of Ghana Business School (UGBS) and the International Growth Centre (IGC), conducted with the Office of the Registrar of Companies (ORC), has revealed that direct logistical assistance, not fee waivers, is the strongest motivator for Micro, Small and Medium Enterprises (MSMEs) to formally register their businesses.
The research, which involved nearly 3,000 MSMEs in Accra and tested three interventions- direct logistical support, fee waivers, and education, found that providing hands-on assistance with form completion, queuing, document submission, and collection of certificates increases registration rates by 7.2 per cent.
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In contrast, waiving registration fees or offering education on the benefits of formalisation showed no statistically significant effect.
Professor Patrick Asuming, lead researcher and Development Economist, told the Ghana News Agency that transaction costs, not financial costs, remain the biggest barrier for MSMEs. He identified the time involved, travel distance to ORC offices and difficulty understanding registration procedures as the most common obstacles.
He added that many business owners also fear taxation, believing that registration automatically puts them under tax scrutiny, creating apprehension, especially for young businesses.
Prof. Asuming recommended decentralising and digitalising registration services through mobile units and fully online options to reduce travel and waiting times. However, he stressed that physical support systems must remain in place for those who may struggle with digital platforms.
He further urged the ORC to consider separating business registration from tax registration, in collaboration with the Ministry of Finance and the Ghana Revenue Authority, to ease widespread fears.
Dr Henri Telli, Senior Country Economist at IGC Ghana, echoed the need for blended systems that combine digital access with human-assisted support to ensure inclusivity.
He noted that fears of immediate tax burdens continue to discourage many from registering their businesses, limiting their access to critical support and stunting growth.
He emphasised that formalisation enables businesses to benefit from government assistance, boost productivity and improve employment stability.
Dr Telli called on the Registrar of Companies, Ghana Revenue Authority and Ghana Investment Authority to intensify public education, tackle misconceptions and offer hands-on support to increase business registrations nationwide.
