The State Great Hural, Mongolia’s Parliament, has passed a new investment law, which has come in effect since 1 November 2013. The Law dramatically alters the investment landscape in Mongolia.
The Investment Law eliminates the previous restrictions on private foreign investment, reduces governmental approval requirements for foreign state investment, introduces a simpler and more open investment process, establishes a new, dedicated agency to assist with the process, and provides an array of investment incentives.
A more open landscape
Under the Investment Law, any investor domestic or foreign may invest in any industry of economy without any limitation or government approval. The only exception applies to a foreign state-owned enterprise (SOE) which acquires more than 33 percent in equity of a legal entity operating in the areas of minerals, telecommunication, media or banking/financial sectors. Such SOE must obtain a prior approval from the Invest Mongolia Agency. A foreign SOE is defined as an entity of which a foreign sovereign state owns, directly or indirectly, more than 50 percent of equity.
Also, the Investment Law eliminates much broader restrictions on private foreign investment in the minerals, telecommunication and banking/ financial sectors that previously existed, removes Parliament from the approval process where foreign SOE’s are involved, and ends the distinction between foreign and domestic investors.
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