Investment Law of Mongolia (2013)

• 2017-02-14
• 329

The Investment Law of Mongolia applies to both foreign and domestic investors.

Investments, in Mongolia, take the following forms:

• Formation of a business entity
• Purchase of shares, bonds, and other securities
• Mergers and acquisition
• Concessions, product sharing, establishing marketing, management and other agreements
• Financial lease, and franchising
• Other forms of investments that are not prohibited by law

Legal guarantees for the investment  

• Tax rates stabilization through a stabilization certificate, and by an investment agreement.
• Unlawful confiscation of investor assets are prohibited by law.
• IP rights of an investor are protected.
• An investor is entitled to export

-profits, dividends, royalties, and services fees.

-principals and interests of loans provided by a foreign state.

-assets allocated upon a business dissolution.

-other assets lawfully acquired or owned.

• Disputes arising under the agreement made with the government may be resolved by an arbitration agreed by the parties.

Investor rights and entitlements

• Select, independently, the form, size and location of the investment
• Invest in more than one sector, and industry
• Meet investor’s foreign currency requirements through the purchase and sale of foreign currencies via Mongolian banking and non-banking institutions
• Manage or participate in the management of a business entity with foreign investment
• Request the use of natural resources, land, finance and loans
• Upgrade the skills of its employees, and ensure good governance and management
• Respect traditions an customs of Mongolian people

 Tax support

• Tax exemption and tax concessions
• Accelerated depreciation and loss carry forward
• Tax deduction of employee training costs
• Customs tax exemption or “0” rated VAT for 1/equipment imports for construction materials production, 2/oil, and agricultural processing, and 3/export oriented production plant, 4/energy and railway construction and 4/production using nano, bio and innovation technologies.

Non-tax support

• 60+years of land use or land possession subject to an agreement
• Ease registration and inspection regimes if investor activities are carried out in free trade zones and industrial parks
• Exemption from workplace fees and in permit requirements if the investment is in infrastructure, industry, science and education sectors
• Visa concessions to investors and their family members

Tax stabilization certificate is issued as the following:

1. Mining, Heavy industry, and Infrastructure

Investment size / billion MNT	Stabilization period /years/
	Ulaanbaatar zone	Central zone	Khangai zone	Eastern zone	Western zone	Investment period
30-100	5	6	6	7	8	2
100-300	8	9	9	10	11	3
300-500	10	11	11	12	13	4
500+	15	16	16	17	18	5

1. Other sectors and industries

Investment size/billion MNT					Term for stabilization certificate (years)	Investment period   (years)
Ulaanbaatar zone	Central zone	Khnagain zone	Eastern zone	Western zone
10-30	5-15	4-12	3-10	2-8	5	2
30-100	15-50	12-40	10-30	8-25	8	3
100-200	50-100	40-80	30-60	25-50	10	4
200+	100+	80+	60+	50+	15	5

Investment Agreement

An Investment Agreement is concluded with an investor who made an investment of MNT 500+ billion to make the investment environment stable.  The Government of Mongolia approves the detail rules for the investment agreement. An investor holding a tax stabilization certificate may conclude an Investment Agreement. The term for the investment agreement will be no less than the term of a tax stabilization certificate.