FOREIGN INVESTORS IN MONGOLIA
What is the concept of a foreign investor? What is a foreign investment, exactly?
A foreign legal person or individual (a foreign resident or stateless person not permanently residing in Mongolia or a Mongolian citizen permanently residing abroad) who invests in Mongolia is referred to as a “foreign investor.” Whereas “A business entity with foreign investment” means a business entity incorporated according to the applicable legislations in Mongolia and has overall equity of US$100, 000 or more (or equivalent in Mongolian tugriks or MNT), not less than 25 percent of which is invested by a foreign investor(s). /Articles 3.1.3 and 3.1.5 of the Investment Law of Mongolia /
Areas for foreign investment
A foreign state-owned legal entity can invest after obtaining approval under Article 21.1 of the Investment Law. If a foreign government-owned legal entity owns 33% or more of the total shares issued by Mongolian legal entities having business in the following industries, permission will be granted: mining, banking and finance, and media and communications. Foreign nationals and businesses are not allowed to own real estate; only Mongolian citizens are permitted to own real estate. Non-tax incentives can be offered to foreign investors who have made investments in Mongolia, as well as their family members, in order to provide them with multiple visas and residential permits under Mongolian law. They must perform their activities in terms of finances, loans, accounts, and foreign currency transactions in compliance with Mongolian rules.
Some current issues /as of November 2020/
A COVID-19-related ban on foreigners entering Mongolia and a ban on passenger flights would complicate investment decisions for the foreseeable future. Besides this, lengthy delays in issuing court decisions in business disputes, followed by similarly long delays in following these judgments, was cited by investors. There have also been allegations of lengthy waits by administrative inspection bodies, such as the tax authority, who have previously failed to act on politically important decisions.
Sources: Law on Investment 2013
'2020 MONGOLIA INVESTMENT CLIMATE STATEMENT | U.S. Embassy in Mongolia' (U.S. Embassy in Mongolia, 2020) <https://mn.usembassy.gov/2020-investment-climate-statement-mongolia/> accessed 29 March 2021