Foreign Investment Law of Mongolia

Chapter One
General Provisions

Article 1.    Purpose of the law

The purpose of this law shall be to encourage foreign investment, to protect the rights and property of foreign investors in Mongolia, and to regulate matters relating to the foreign investment. /This paragraph was rephrased by the Law of January 3, 2002/

Article 2.    Legislation on foreign investment

1. The legislation on foreign investment is comprised of the Constitution of Mongolia, this law and other relevant legislation which is consistent with those laws.
2. If an international treaty to which Mongolia is a party is inconsistent with this law, then the provisions of the international treaty shall prevail.

Article 3.    Definitions

1. “Foreign investment” means every kind of tangible and intangible property which is invested in Mongolia by a foreign investor for the purpose of establishing a business entity with foreign investment within the territory of Mongolia or for the purpose of jointly operating with an existing business entity of Mongolia.
2. “Foreign investor” means a foreign legal person or individual (a foreign citizen or stateless person not residing permanently in Mongolia or a citizen of Mongolia permanently residing abroad) who invests in Mongolia.
3. “Mongolian investor” means a Mongolian legal person or individual (a citizen of Mongolia, immigrant or stateless person permanently residing in Mongolia) who invests.
4. ”Investment agreement" is an agreement and/or a contract on concession, product sharing, marketing, management, financial leasing and franchise investment concluded by foreign investors for implementation of concrete project without having to establish a legal entity. /This paragraph was added by the Law of January 3, 2002/
5. “One stop service” is a complex service including to receive applications and other relevant
materials on establishing a business entity with foreign investment or a branch of foreign legal entity, issuing certificate, license and special permission in order to start a business activity, making a conclusion, appraisal at one place and to organize activities to solve of these issues by relevant authorities, and to provide investors with necessary information as well as consultancy service.” /This paragraph was added by the Law of January 3, 2002/

Article 4.    Areas for foreign investment

1. Foreign investment may take place in all areas of production and all services other than those prohibited by the laws of Mongolia.
2. Foreign investment may take place in all parts of the territory of Mongolia where the types of production to be undertaken or services to be provided are not prohibited by the laws of Mongolia.

Article 5.    Types of foreign investment

A foreign investor may invest in the following:
1)freely convertible currencies and reinvestment of togrogs yielded by investments;
2)moveable and immovable property and property rights;
3)intellectual and industrial property rights.

Article 6.    Forms of foreign investment

Foreign investment shall be made in the following ways:
1)by establishing wholly foreign-owned business entities or local branches or subsidiaries of foreign enterprises;
2)by establishing business entities jointly with Mongolian investors;
3)a foreign investor makes a direct investment by buying stocks, shares and other securities of the Mongolian business entities under the legislation of Mongolia; /This paragraph was rephrased by the Law of January 3, 2002/
4)by acquiring rights by law, concession and product sharing contract to exploit and process natural resources. /This paragraph was amended by the Law of January 3, 2002/
5) Conclude a contract for marketing and management,
6) Make an investment through financial leasing and franchise. /The paragraphs  5, 6 were added by the Law of January 3, 2002/

Article 7.    Purchase of shares or other securities

Foreign investors may purchase shares or other securities in any business entity which is operating within the territory of Mongolia in accordance with the laws of Mongolia.