Nietzsche’s aphorism of “What doesn’t kill you makes you stronger” is my optimistic view about Mongolian business environment, including foreign investments, although several factors are nearly undermining foreign direct investment and general business environment.

In November 2019, Mongolia revised its Constitution for the first time in 19 years, introducing significant changes to Article 6.2, which focuses on ensuring that Mongolian citizens benefit from the country's natural resources. In alignment with these constitutional amendments, the Law of Mongolia on National Wealth Fund (“National Wealth Fund Law”) was approved on 19 April 2024, following extensive parliamentary discussions. This law establishes the legal basis for implementing the constitutional provisions related to the distribution and management of the country’s wealth.

On 9 December 2022, the Parliament of Mongolia adopted the Law of Mongolia on Public and Private Partnership (the “PPP Law”). The PPP Law came into effect on 1 July 2023, replacing the existing Law of Mongolia on Concession (the “Concession Law”) dated 28 January 2010. The introduction of the PPP Law signifies Mongolia’s commitment to reforming and modernizing the principles and terms of PPP in line with international standards and best practices.

On 20 January 2023, the Parliament of Mongolia adopted the Law of Mongolia Investment-Specialized Banking Law (the “Investment Banking Law”) after six years of pending approval since the draft law has been prepared and submitted to the Parliament of Mongolia (the “Parliament”) in 2016 for parliamentary discussions and enactment. The Investment Banking Law entered into force on 1 March 2023.

Melville Erdenedalai LLP as the Mongolian associated partner of Hogan Lovells International LLP, recently launched a multijurisdictional FDI Guide across nine APAC jurisdictions including: Australia, India, Indonesia, Japan, Mongolia, People’s Republic of China (Hong Kong and Mainland China), Singapore and Vietnam. You can access the complete Legal Guide on below link.

As majority of the top-ranked international arbitration legal practices are based in the U.S., it is therefore worth considering the rapid changes in U.S. arbitration jurisprudence over the last few years. The ways in which U.S.-licensed attorneys learn and deploy the law can have practical ramifications for key Asian arbitration centers, and even for Mongolian companies.

On 17 June 2022, the Parliament of Mongolia adopted the Law of Mongolia on Permits (“Permit Law”). The Permit Law will become effective on 1 January 2023. Below we provide brief information on some of the key changes introduced by the Permit Law.

We provide information on key legislative changes introduced during the previous Parliamentary session and legislation to be discussed and approved during the current spring Parliamentary session.

In January 2021, the Parliament of Mongolia adopted the Law of Mongolia on Amendments to the Banking Law which required systemically important banks to become open joint stock companies by 30 June 2022. In light of this, on 5 October 2021, the BoM and the FRC adopted a Joint Order approving the “Regulation on the Approval of Changes to the Share Capital and Shareholding Structure of a Bank in the form of a Joint Stock Company”.

After long discussion and debate since the submission of its initial draft on 26 March 2018, a revised Labor Law (the “Revised Labor Law”) was adopted by the Parliament of Mongolia on 2 July 2021, which will come into force and effect on 1 January 2022.This briefing focuses on some select changes of interest to employers and businesses operating in the private sector.

On 7 July 2021, the Government of Mongolia adopted Resolution No.192 which approved the Regulation on Issuance of Mongolian Visas (the “Visa Regulation”). The Visa Regulation became effective on 16 August 2021. Below we highlight some of the key changes introduced by the Visa Regulation.

With vast amounts of proven coal reserve, there is significant potential for development of the methane gas industry in Mongolia. Below we provide general information on certain regulatory matters that may be of interest to those involved or looking at this sector.

It has been nearly one year since the amendments to the Constitution of Mongolia, enacted on 13 January 1992 (“Constitution”) became effective. On 14 November 2019, the State Great Khural of Mongolia (“Parliament”) made significant amendments (“Amendments”) to the Constitution and the amendments became effective on 25 May 2020. This was the second time that the Constitution was amended since its adoption in 1992.

Хөгжиж буй улс орнуудын иргэд, ялангуяа хөрөнгө санхүүгийн туршлага, мэдлэг дутмаг иргэд, хуулийн этгээдүүдийг онилж, хууран мэхлэх, залилах гэсэн үйлдэл байнга гардаг гэдгийг та бид бүгд мэднэ. Харин бизнес эрхлэгчид, хөрөнгө оруулалт хайсан компаниудыг онилсон хуурамч хөрөнгө оруулагч нарыг хэрхэн таньж мэдэх бэ? Эдгээр залилан хийх гэж буй этгээдүүдийг таньж мэдэхэд туслах боломжтой зарим нэг зөвлөгөө, анхаарах асуудлуудыг товч дурдъя. https://bit.ly/3bAxC14

On 29 January 2021, the Parliament of Mongolia adopted the Law of Mongolia on Amendments to the Banking Law (“Amendments”). Together with the Amendments, the Parliament of Mongolia adopted the Law of Mongolia on Procedures for Implementing the Law on Amendments to the Banking Law (“Implementation Law”). The Amendments and the Implementation Law entered into force on 25 February 2021. Please CLICK THE LINK: https://bit.ly/3dVIZVj

In cooperation with Thomson Reuters, M&E’s article “Country Update-Mongolia: Insurance” has been published by Practical Law. This article highlights some of the key legal regulations commonly associated with the insurance market in Mongolia. PLEASE CLICK THE LINK: http://shorturl.at/duHJZ

In cooperation with One Trust Data Guidance, M&E’s article “Mongolia-Data Protection Overview Guidance Note” has been published at the website DataGuidance. This article highlights some of the key legal issues relating to data protection in the financial, health and telecommunication sectors.
PLEASE CLICK THE LINK: https://lnkd.in/eT2Qh8S

In cooperation with Thomson Reuters, M&E’s article “Mining in Mongolia: Overview” has been published at the website Practical Law, in the global energy and natural resources section. This article highlights some of the key legal issues commonly associated with the exploration and extraction of mineral resources in Mongolia. Please see the link below: https://global.practicallaw.com/w-017-7372

The Parliament of Mongolia adopted the revised General Taxation Law (the “GTL”), the Law on Corporate Income Tax (the “CIT Law”) and the Law on Personal Income Tax (the “PIT Law”, together the “Taxation Package Laws”) on 22 March 2019, which became effective from 1 January 2020. In connection with these revised laws, approximately 23 laws were amended. Revised methodologies on valuation of minerals licenses and land rights for tax purposes were approved by the Ministry of Finance and officially published as of 20 January 2020.

In October 2019, the Financial Action Task Force (“FATF”) included Mongolia into its watchlist (the so called “Grey List”). From the outset, this could increase the concerns of investors around economic stability, smooth international transactions, and free flows of currency. If the Grey List status lasts for a significant length of time, this could develop into more serious problems, but we believe this status should be corrected within a short-term period and do not expect that it will have a material medium or long-term impact on FDI. Some of the potential short-term risks and the main points underpinning this are set out below.