Updated: Aug 29, 2022
1. Investment climate
1.1. Business environment
Mongolia is a centralised state and not a federation. Mongolia is a parliamentary democracy. The President is the head of state. Executive power lies with the Government of Mongolia, headed by the Prime Minister. The Prime Minister is usually the leader of the political party holding majority of the seats in the Parliament of Mongolia. The legislature has a single chamber consisting of 76 members elected by the electorate. (https://www.cia.gov/library/publications/the-world-factbook/geos/mg.html)
Mongolia follows the Romano-Germanic civil law system. The Supreme Court is the final court of appeal for all civil, criminal and administrative cases. (https://www.cia.gov/library/publications/the-world-factbook/geos/mg.html)
Mongolia is party to numerous international organisations, conventions and treaties including (but not limited to) WTO.
Mongolia is an emerging economy. Mongolia's economy has been growing at a fast pace in the last 20 years due to the increase in foreign direct investments into Mongolia in the mining, construction, financial and service sectors. Mongolia's GDP growth was 12.3% in 2012 and 11.7% in 2013 (https://countryeconomy.com/gdp/mongolia).
Mongolia has some of the lowest tax rates in the world and Mongolia's tax regime has been consistent and stable in the last 20 years.
Mongolia is a liberal market economy in which prices are determined by supply and demand. The government regulates prices in certain industries (e.g. energy and public transportation).
1.1. Currency and Currency Controls
The currency in Mongolia is the Togrog (MNT). In recent years, the exchange rate of the MNT has significantly depreciated against the US dollar. As of the end of Q2 2022, the exchange rate was USD1.00=MNT3,134. In contrast, the exchange rate was USD1.00=MNT1,342 ten years ago.
In Mongolia, transactions must be done in MNT. Cross-border transactions can be done in any currency.
There is no requirement for obtaining any approval to repatriate or transfer funds out of Mongolia.
1.2. Banking and financing
The Central Bank of Mongolia (or Mongolbank) is the central bank of Mongolia that regulates the commercial banks and investment banks and sets the monetary policy (https://www.mongolbank.mn/eng/aboutus.aspx).
The Financial Regulatory Commission regulates other financial institutions and listed and public companies (https://www.mongolbank.mn/eng/aboutus.aspx).
The capital city Ulaanbaatar is the main financial centre.