Doing Business In Mongolia 2026

I. INTRODUCTION

Tremendous mineral reserves, agricultural endowments, and proximity to Asia's vast markets make Mongolia an attractive destination for medium to long-term foreign direct investment (FDI).

General Information about Mongolia

• Population: As of the beginning of 2025, Mongolia's total population stands at 3,544,835. In terms of population distribution, 71.2% of the population, or 2,522,210 people, reside in the capital city of Ulaanbaatar, while 28.8%, or 1,022,625 people, live in rural areas.¹
• Territory: Mongolia is a landlocked country bordered by the Russian Federation to the north and the People's Republic of China to the south. It has a total land area of 1,564,116 square kilometers. Administratively and territorially, Mongolia is divided into the capital city, 21 provinces (aimags), and 330 soums (districts). The land area per capita amounts to approximately 44 hectares per person.²
• Language: Mongolia has one official language, which is Mongolian.³
• Legal System: The primary source of law in Mongolia is statutory (written) law, and all legislation, regulations, and rules are governed by the 1992 Constitution, commonly referred to as the democratic Constitution. Mongolia is a parliamentary republic, and the system of state authority is divided into three branches: the State Great Khural (Parliament), the Government (executive branch), and the Judiciary.⁴
• Currency: Mongolian Tugriks (MNT)⁵
• Cost of Living: As of 2025, the estimated monthly living expenses in Mongolia, excluding rent, amount to approximately USD 560 for a single individual and USD 2,000 for a family of four. This represents a cost of living that is 55.3% lower than the average living expenses in the United States.⁶
• Human Resources: The majority of Mongolia's working-age population possesses a relatively high level of education. According to available statistics, 59.1% of citizens aged 15 and above, considered to be of working age, are employed.⁷
• Economy: According to data published by the National Statistics Office, as of the end of 2024, Mongolia's Gross Domestic Product (GDP) amounted to MNT 32.0 trillion at 2015 constant prices and MNT 79.9 trillion at current prices. In the second quarter of 2025, nominal GDP reached MNT 40 trillion, representing an 8.8% increase compared to the same period of the previous year.⁸
  Mongolia's economy is primarily based on agriculture and mining. The country is rich in mineral resources, and the extraction of copper, coal, molybdenum, tin, tungsten, and gold plays a significant role in the national economy. Outside urban areas, the population predominantly engages in livestock husbandry, including the herding of sheep, goats, cattle, horses, and camels. Crop production mainly consists of the cultivation of wheat, barley, vegetables, tomatoes, watermelons, sea buckthorn, and fodder crops.

The significant features and advantages of Mongolia include, but are not limited to, the following:

• A diversified and growing market exists in Mongolia;
• Technology Innovation Hub;
• Large mineral resource base that can be leveraged for value-added processing;
• Developing Industry and Infrastructure;
• Acting as a bridge between the two economic powerhouses of Russia and China;
• A young, well-educated population;
• The private sector and privatization, including the privatization of major state assets and listing Mongolian conglomerates and exploration license aggregators on MSE;
• Public-Private Partnerships (PPPs) and modernizing Infrastructure;
• Rule of law, regulatory quality, and transparency;
• Ensuring guarantees for investors, both tax and non-tax related;
• Promising mega projects; and
• A thriving telecoms & IT sector.

II. FOREIGN INVESTMENT ENVIRONMENT IN MONGOLIA

Mongolia offers a favorable environment for medium- and long-term foreign direct investment (FDI) due to its abundant natural resources, extensive agricultural potential, and strategic proximity to two of Asia's largest markets. Foreign direct investment accounts for approximately 60% of total investment in the country. As of the end of 2023, FDI inflows reached USD 3.5 billion, increasing to USD 4.1 billion by the end of 2024. As of the second quarter of 2025, total FDI amounted to USD 2.35 billion, representing a 16% decrease, or USD 344 million less, compared to the performance recorded during the same period of the previous year.⁹

International legal framework:

Mongolia is actively engaged in negotiating bilateral and multilateral agreements with foreign countries and participating in regional integration activities. Currently, Mongolia has:

• Signed "Bilateral agreements on investment promotion and mutual protection" with 42 countries;
• Established "Double Taxation treaties" with 26 countries;
• General Agreement on Trade and Economic Cooperation with 24 Countries
• Established "Agreements on Mutual Legal Assistance in Civil, Family, and Criminal Matters" with 19 countries;
• Signed its first free trade agreement, referred to as "the Mongolia – Japan Economic Partnership Agreement (EPA)" with Japan;
• Bilateral agreements and arrangements, including, inter alia, the Interim Free Trade Agreement between Mongolia and the Eurasian Economic Union, have been concluded.

Moreover, Mongolia is a member of the Seoul Convention establishing the Multilateral Investment Guarantee Agency and the Washington Convention on the Settlement of Investment Disputes. Consequently, in April 2014, Mongolia introduced its investment policy and the law to the UN Conference on Trade and Development /UNCTAD/ releasing "Mongolian Foreign Investment Policy Review".

Local legal framework:

In 2013, the Parliament of Mongolia passed a new law on investment, which replaced both the old Investment Law of 1993 and the Law on Strategic sectors. The Investment Law¹⁰ aims to create an open investment environment for investors, focusing on the following:

1. No approval is required to enter the market and purchase a local company.
2. No discrimination between foreign and local investors;
3. Fast registration process;
4. Stability guarantees- Provision of a tax stabilization certificate; and
5. Flexibility and favorable conditions for investors.

In 2021, the Ministry of Economy and Development was newly established, replacing the National Development Agency of Mongolia, which had been responsible for investment related matters. The new Ministry is tasked with, among other things, enhancing integrated investment policy and planning, improving the legal environment, ensuring and overseeing the implementation of relevant legislation, attracting, supporting, and protecting investment, implementing comprehensive measures to develop public and private partnerships, defining integrated policies for loans, and developing a national investment program.

Forms of Investment:

Pursuant to the Law on Investment, investments in Mongolia may be implemented in the following forms:

1. By establishing a solely or jointly owned business entity;
2. Through the purchase of shares, bonds, and other securities of Mongolian companies;
3. By merging or wholly acquiring Mongolian and foreign companies;
4. Through the establishment of a franchise or financial leasing agreement, and Investment in the form of franchising
5. In other ways, acceptable and not prohibited by law.

Foreign Direct Investment (FDI) refers to an investment made by an enterprise of one country into an enterprise established in another country. The principal distinguishing feature of FDI, as compared to other forms of investment, is the degree of managerial control exercised by the investor. An investment is considered FDI when the investor holds 10 percent or more ownership interest, thereby obtaining the ability to influence or directly participate in the management of the domestic enterprise.

Depending on the percentage of ordinary shares held in the enterprise, FDI companies are classified as follows:

• Associate Company - (20–50% ownership) possessing significant influence over the company's operations.¹¹
• Subsidiary Company - (50–100% ownership) possessing full control over the company's operations.¹²

Where an investor does not directly hold shares in a particular enterprise but exercises control or influence indirectly through another investing entity, such investment shall be deemed indirect foreign direct investment.

REQUIREMENTS APPLICABLE TO FOREIGN INVESTORS

If a foreign state-owned legal entity intends to hold 33 percent or more of the total shares issued by the legal entities in Mongolia operating in the following strategic sectors must get permission from the Ministry of Economy and Development before becoming the shareholder or investor:

1. Mining;
2. Bank and finance;
3. The media and communications.

The following documents are required to apply for permission as a foreign state investor prior to investing in a Mongolian legal entity:

1. Official request for the permit of the applicant;
2. Notarized copy of the applicant's certificate of incorporation issued by a competent authority in the applicant's country;
3. References from the registration authority concerning the applicant, individuals with common interests, and the applicant's executive management over the past two years;
4. Introduction to the main activity and shareholders of the applicant;
5. Investment plan and business project to be implemented by the applicant in Mongolia;
6. Preliminary transaction details between a foreign state-owned entity and the Mongolian entity, including types and conditions of the transaction, parties involved, shares to be transferred, percentage of shareholding, agreement price, and any proposed changes to the entity's charter;
7. Financial reports and audited financial statements of both the foreign state-owned legal entity and the Mongolian business entity;
8. Contact details.

Footnotes

1. National Statistics Office of Mongolia, https://www.1212.mn/mn/statcate/table/Population,%20household/1_Population,%20household

2. https://www.tecm.org.tw/mn/mongol_country.html

3. Law on the Mongolian Language(2015), https://legalinfo.mn/mn/detail/10932

4. B. Amandykh, "The Legal System of Mongolia and the Development of Legislation" (2018), https://legaldata.mn/b/358

5. Law on Conducting Payments and Settlements in the National Currency (2009), https://legalinfo.mn/mn/detail/484

6. Cost of Living in Ulaanbaatar (October 14, 2025), https://livingcost.org/cost/mongolia/ulaanbaatar

7. Labour Force Survey, First Quarter of 2025, National Statistics Office of Mongolia, https://downloads.1212.mn/O97fcPQzIo5iew9_YMryXk_54bLi9-BG_-HA0V_C.pdf

8. Gross Domestic Product, National Statistics Office of Mongolia, https://downloads.1212.mn/tzscSfp2IWouyAo GeDKmZ0WcNwjEY-0JjC_cWXV.pdf

9. External Sector Review, Third Quarter of 2025, Bank of Mongolia, https://stat.mongolbank.mn/external

10. https://legalinfo.mn/mn/detail?lawId=9491

11. Company Law (2011), Article 6.1, https://legalinfo.mn/mn/detail/310

12. Company Law (2011), Article 6.3, https://legalinfo.mn/mn/detail/310

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