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Mongolia
We have a team of experienced professionals dedicated to supporting all your business requirements—ensuring smooth operations and full regulatory compliance. This strong foundation enables you to confidently establish and grow your business in Mongolia with efficiency and assurance.
WHY MONGOLIA?
Mongolia is a landlocked country in East Asia. Bordered by Russia to the north and China to the south and southeast, it covers an area of 1,564,116 square kilometres (603,909 square miles), making it the 18th-largest country in the world and the second largest landlocked country after Kazakhstan, as well as the largest landlocked country that does not border an inland sea. With a population of 3.5 million, it is the world’s most sparsely populated sovereign state, excluding partially unrecognized Western Sahara.
The country constitutes a significant portion of the Mongolian Plateau, and its natural environment is characterized by grassy steppe, mountains to the north and west, and the Gobi Desert to the south. Ulaanbaatar, the capital and largest city, is home to roughly half of the country’s population.
Mongolia is a member of the United Nations, Asia Cooperation Dialogue, G77, Asian Infrastructure Investment Bank, Non-Aligned Movement and a NATO global partner. Mongolia joined the World Trade Organization in 1997 and seeks to expand its participation in regional economic and trade groups. Mongolia produces one-fifth of the world’s raw cashmere. The World Bank has stated that Mongolia’s development prospects are promising due to an expansion of mining and large public investment. Mongolia’s real GDP grew by 7% in 2023.
Mongolia offers a strategic opportunity for businesses and investors due to its abundant natural resources. The country’s dynamic business environment is driven by rapid economic growth and strategic initiatives to enhance the business climate. With a youthful population and evolving infrastructure, Mongolia attracts global entrepreneurs. The government actively diversifies the economy by promoting renewable energy, technology, and banking sectors alongside traditional mining.
ADVANTAGES
Abundant Natural Resources & Economic Growth:
As a resource-rich nation (copper, coal, gold), Mongolia offers substantial investment opportunities for foreign direct investment (FDI), which accounts for a significant portion of its economic growth.
Strategic Location:
Positioned between major markets in Russia and China, Mongolia serves as a crucial transit and business hub for accessing Northeast Asia.
Favourable Investment Environment & Incentives:
- Investment Law: The Law on Investment provides for tax exemptions, reduced tax rates, and customs duty exemptions for imports of equipment and raw materials in key sectors.
- Special Economic Zones (SEZs): These zones provide a streamlined regulatory environment and specific incentives.
- Stability Certificates: Investors can obtain tax stabilization certificates to ensure a stable legal and tax environment.
Simplified Business Procedures:
- Fast Registration: The Invest Mongolia Agency facilitates quick business registration.
- No Restrictions on Ownership: There is no requirement for approval to purchase local companies and, generally, no discrimination between foreign and local investors.
Diverse Sector Potential:
Beyond mining, there is high potential in agribusiness, cashmere production, renewable energy, tourism, and IT.
Young Workforce:
A young and increasingly educated population offers a growing labour pool.
TAX REGIME
Corporate Income Tax (CIT):
- Small Entities: Entities with annual revenue up to MNT 300 million (excluding mining, alcoholic beverages, tobacco) are taxed at a 1% rate.
- General Entities: 10% on the first MNT 6 billion of annual taxable income, with higher, progressive rates on amounts exceeding this.
- Non-residents: 20% flat rate on income sourced from Mongolia.
Personal Income Tax (PIT):
- Residents: A progressive rate of 10% for annual taxable income up to 120 million MNT, 15% for 120-180 million MNT, and 20% for over 180 million MNT.
- Non-residents: 20% flat rate on salary and employment income.
- Value Added Tax (VAT): Standard rate is 10% on most goods and services.
Other Taxes and Rates:
- Dividends & Interest: 10% for residents, 20% for non-residents.
- Immovable Property Sale: 2% final tax.
- Gambling/Lottery: 40%.
- Social Insurance: Both employers and employees contribute to social insurance.
MONGOLIA COMPANIES
Limited Liability Company (LLC):
The preferred, most common structure for foreign investors, requiring at least one shareholder (individual or legal entity).
Joint Stock Company (JSC):
Suitable for public fundraising, requiring at least two shareholders and a board of directors.
Partnership:
A business formed by two or more individuals to share profits.
Representative Office:
Allowed for market research or promotion but cannot engage in direct commercial/profit-making activities.
Branch Office:
Used by foreign companies to conduct business directly in Mongolia.
Contact Us
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enquiries@chandrawatpartners.com.