The Government of Mongolia provides support to both local and foreign investors on an equal condition and without discrimination.
Tax incentives include the following:
Non-tax incentives include:
Tax Stabilization Certificate
Furthermore, foreign investors who incorporate companies and conduct business operations in Mongolia are offered “Stabilization Certificates,” which propose a stabilized amount and rate of taxes and other payments to the government during their business operation period in the country.
The holder of a Stabilization Certificate is guaranteed stabilized tax rates for a period of five to eighteen years depending on the amount, industry, and geographic location of the investment in Mongolia, and should comply with the criteria stated in the law.
If the above-mentioned four taxes are increased during the effective period of the Stabilization Agreement, they will be ineffective to entities with a Stabilization Certificate and will be effective in cases where taxes are reduced.
The stabilization certificate conditions and grants for mining extraction, heavy industry and infrastructure sectors
Stabilization certificate conditions and grants for other sectors
State authority in charge of investment affairs may extend by two years the period within which the investment must be made, upon an investor’s application. If certain conditions are met, the stabilization certificate period may be extended by 1.5 times for some projects. In other words, favorable tax conditions can prevail for up to 27 years. Certain conditions include the following:
P.S.: Stabilization of taxes will not apply to the manufacturing, import, and sales of tobacco and alcohol.
Requirements and terms for the stabilization certificate include the following:
The Government of Mongolia shall conclude an investment agreement with the investor with intentions of investing sums MNT 500b ($145.2m) and more at the investor`s request, with the purpose of ensuring the stability of business environment. This means, for example, the tax rate shall be stable over the duration of the investor’s business activities. In other words, if a new tax is introduced later than the current one, it will not apply to the company that entered into the Investment Agreement.
To qualify for an investment agreement, an investor must make a request to the State’s central administrative body in charge of foreign investment matters and will enclose the following documents:
Free Trade Zones
Free trade zones exist at three border crossings, namely Altanbulag, Zamyn-Uud, Khushig Valley and Tsagaan nuur. Special conditions apply to business activities in these zones, including the opportunity for incentives to tax and customs duty, access to transit freight denominated by both foreign and national currencies, easier access to state services, such as special inspections, visa, and better regulations for employment.
TAX INCENTIVES ARE APPLIED IN FTZS
Despite this, infrastructure in the free trade zones remains undeveloped and the required follow-up regulations and procedures are not yet in place. For this reason, Therefore, Mongolian free trade zones still fall short in terms of attracting business.
Non-tax incentives may be rendered to investors in the following purposes:
Services for Investors
Investor Protection Council
The Investor Protection Council was established in 2016. The main duties of the Council are to support and provide services to the Government of Mongolia with regards to the protection of investors, legal rights, and interests in line with the leading priority of the Government of Mongolia and to organize negotiations for dispute settlement between investors and the Government.
The Investor Protection Council is composed of a Chairman, 15 members, and a Secretary. The main formation of the Council’s operation structure should be Council’s session. Decisions are reached by the majority of the Council members during the session.
The IPC’s main roles include the following:
Online grievance redress system for foreign investors
An online grievance redress system “SIRM” is available for both foreign and local investors. Investors can submit their feedback and complaints to the “Investor Protection Council” or its website www.ipc.gov.mn either personally or through their representatives, as well as receive related information on each processing stage until such time that the complaint has been fully addressed. The submitted complaint shall be resolved with participation from all relevant agencies. This helps create a national database for investor protection that will register all feedback and complaints.
“Invest in Mongolia” – A one-stop service center
Invest in Mongolia – One-stop service center was established to create favorable conditions for investors, set forth for them in legal investment framework, streamline public services, eliminate unnecessary processes and the difficulties that investors are facing.
The One-stop service center provides all public services of State Registration, Social Insurance, Taxation, and Immigration organizations as well as other relevant ministries and public institutions which are related to foreign-invested entities in Mongolia.
The following services are provided by the OSSC:
All services provided by the General Authority for State Registration are available online.
When receiving an official investor reference letter please click on the following link for further info before submitting a request https://invest-assist.gov.mn/home is available for submitting a request.
An online platform for investors can also be used for receiving state services at http://www.e-invest.mn.
“In addition, overseas nationals can benefit up to a total of 28 services using the E-Mongolia.mn website, which include the following: