We use survey data from the construction sector in Ghana to examine the heterogeneity in skill transfer to local workers in Chinese enterprises, other foreign and local enterprises, and the challenges faced by firms in local skill development. The results show that both Chinese and other foreign owned enterprises contribute positively to local skill development through the provision of general and specific training. However, Chinese enterprises have a higher propensity to provide short-term general training to local workers than those of other foreign enterprises. We identify low technical education quality, low employee retention rate, short project time frame, and communication and cultural barriers as key challenges that distort incentives for skill—upgrading in the construction sector. Foreign governments and host country stakeholders could strengthen bilateral cooperation in technical and vocational education to mitigate these structural challenges.