flag Mongolia Mongolia: Investing

FDI in Figures

Foreign direct investment (FDI) has been the engine of Mongolia's economic growth and is highly dependent on commodity prices. According to UNCTAD's World Investment Report 2023, FDI flows to Mongolia amounted to USD 2.5 billion in 2022, up by 15.2% compared to the USD 2.5 billion recorded one year earlier and above the pre-pandemic level. At the end of the same period, the total FDI stock stood at USD 28.5 billion, around 169.4% of the country’s GDP. Mongolia's main investment partners are China, Canada, Russia, Great Britain, and the United States. The sectors attracting the most foreign investment are mining, oil, and construction. 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. According to the World Bank, in the first nine months of 2023, FDI inflows declined by 9% year-on-year and reached 8.4% of GDP, compared to 9.6% in 2022. The decrease in FDI in the mining sector can be primarily attributed to reduced financing needs at the Oyu Tolgoi underground mine project. However, FDI in the non-mining sectors remains subdued at only 2% of GDP, reflecting the limited investor interest amid tighter global financial market conditions.

Mongolia imposes minimal market-access barriers, with investors encountering few investment restrictions and enjoying mostly unrestricted market access. With the exception of real estate, both foreign and domestic investors in Mongolia possess the same rights to establish, sell, transfer, or securitize structures, shares, use rights, companies, and movable property. Mongolia generally imposes no statutory or regulatory limits on foreign ownership and control of investments, except for foreign state-owned entities. According to the Mining Law, the government reserves the right to acquire up to 50% of mineral deposits deemed of "strategic" value to the state by parliament. Additionally, since 2019, Article 6.2 of Mongolia's Constitution mandates that the state take a "majority" share of the "benefits" from strategic mining projects. However, only Mongolian adult citizens are permitted to own real estate in the form of land. While foreign investors can obtain use rights for the underlying land, these rights are valid for five years with a one-time, five-year renewal, a restriction not imposed on Mongolian nationals by the government. The government typically extends the same tax preferences to both foreign and domestic investors. Conversely, vulnerability to external economic and financial shocks, ineffective dispute resolution mechanisms, and a lack of input from stakeholders during rulemaking all serve as impediments to FDI. To date, Mongolia has established Foreign Investment Protection and Promotion Agreements with 43 countries and Double Taxation treaties with 26. Moreover, it is a member of the Seoul Convention establishing the Multilateral Investment Guarantee Agency, and the Washington Convention on the Settlement of Investment Disputes. Mongolia ranks 121st among the 180 economies on the 2023 Corruption Perception Index and 76th out of 184 countries on the latest Index of Economic Freedom.


Country Comparison For the Protection of Investors

  Mongolia East Asia & Pacific United States Germany
Index of Transaction Transparency* 6.0 5.9 7.0 5.0
Index of Manager’s Responsibility** 8.0 5.2 9.0 5.0
Index of Shareholders’ Power*** 8.0 6.7 9.0 5.0

Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

Foreign Direct Investment 202020212022
FDI Inward Flow (million USD) 1,7192,1732,504
FDI Stock (million USD) 24,206.726,281.828,521.5
Number of Greenfield Investments*
Value of Greenfield Investments (million USD) 1207

Source: UNCTAD - Latest available data

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.


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Tax Rates

Value Added Tax (VAT)
10% (standard rate).
Zero-rated items include exports; services provided in a foreign country; any rendering of services to nonnresidents; any services of air navigation management, technical and fuel services, and cleaning that shall be provided for both foreign and domestic airplanes conducting international flight and sale, food and drink services provided for air crew members or passengers during flight; state medals and coins manufactured domestically on the order of the Government or the Bank of Mongolia; mining finished products that are exported.
Exempt items include passengers’ personal-use goods (subject to permitted amounts and approval by customs authority); goods received through humanitarian and grant aid from foreign governments, NGOs and international or humanitarian organizations; special purpose appliances, equipment and machinery designed for physically challenged persons; civil passenger airplanes and spare parts thereof; revenues from the sale of establishments used for housing or portions thereof; blood, blood products and organs to be used for purposes of specified treatment; gas fuel, gas fuel containers, equipment, special purpose machineries, mechanisms and related mechanics; sale of gold; experimental products related to research and scientific work; mining products other than mining finished product that was exported; cereal, potatoes, seeds, vegetables and fruits domestically grown and sold by farmers and domestically produced flour; asset-backed loan portfolio or claiming rights derived from financial leasing arrangements transferred by banks, nonbaning financial institutions (NBFI) or other legal entities to other banks, special purpose companies or mortgage corporations; imported woods, timbers, cut materials, planks, wooden pieces and semi-processed wooden materials; exported cashmere and leather that has been raw processed (cleaned and brushed); import of special purpose machinery, equipment, parts, raw materials, and chemical or explosive substances imported by contractors and subcontractors to be used for crude oil and nontraditional crude oil industry for the first five years of an exploration period or for exploration periods of less than five years; import of equipment, tools and accessories for renewable energy production and research; currency exchange; banking services, such as the receipt or transfer of money, or any dealing with money, any security for money or any note or order for the payment of money and the operation of any savings account; services of insurance, reinsurance and registration of property; the issuance, transfer or receip f any securities and shares, and underwriting of such securities; the issuance of loans; the provision or transfer of an interest related to a social and health insurance fund; loan interest, financial lease interest, dividends, loan guarantee fees or insurance premiums by banks, NBFIs, or saving and loan cooperatives; rental of residential houses and apartments; medical services; services of religious organizations; services provided by a government organization; this shall include public services provided by the government, its agencies and budgetary organizations; public transportation services; tour operating services; weapons and special equipment imported for the needs of the armed forces, police, state security, enforcement of court decisions, state special protection organizations and the anti-corruption agency.
Company Tax
Progressive rate from 1% to 25%
Withholding Taxes
Dividends: 10% (resident)/20% (non-resident); Interests: 10% (resident)/20% (non-resident); Royalties: 10% (resident)/20% (non-resident).
Social Security Contributions Paid By Employers
Between 12.5% and 14.5% depending on the sector (8.5% for pension, 1% for benefits, 2% for health, 0.2% for unemployment, and 0.8% to 2.8% for industrial accident and occupational disease insurance).
Other Domestic Resources
Taxation Office (MTA)
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Individual Taxes

Income tax 10%
Non-residents 20%

Country Comparison For Corporate Taxation

  Mongolia East Asia & Pacific United States Germany
Number of Payments of Taxes per Year 19.0 23.4 10.6 9.0
Time Taken For Administrative Formalities (Hours) 134.0 195.1 175.0 218.0
Total Share of Taxes (% of Profit) 25.7 33.8 36.6 48.8

Source: Doing Business - Latest available data.

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Investment Opportunities

Tenders, Projects and Public Procurement
Asian Developement Bank, Proposed Projects in Asia
DgMarket, Tenders Worldwide
Setting Up a Company
Consult Doing Business Website, to know about procedures to start a Business in Mongolia.
Useful Resources
Foreign Investment and Foreign Trade Agency (FIFTA)

Business Setup Procedures

Setting Up a Company Mongolia East Asia & Pacific
Procedures (number) 8.00 7.25
Time (days) 12.00 29.73

Source: Doing Business.


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Latest Update: May 2024