Investment Law has been approved by the SGK

Oct 3 • Featured, Laws, News • 4718 Views • No Comments on Investment Law has been approved by the SGK

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One of the reasons of the special session of SGK that has been held last month was discussion of the new Investment Law. Today, SGK has approved the law with a majority voting in favour of the law. The contemplation of the law came after the new government and parliament was formed and amid the diminishing foreign direct investment in country’s mining and other sectors.

New law will not distinguish between foreign or domestic investors. The MPs have emphasized the productivity of the discussion held at the special session and correction of some clauses in the draft.

The initial draft of the law stated that ‘If an investment is over MNT15 billion and in align with the economic development, environmentally friendly, implementing new technology, and created new jobs the project tax imposition will be stabilized for 5-10 years’. However, the amended and approved version is flexible on investment amount and period depending on the regional factor. It means that the tax stabilization depends on the sector, location and amount. The following table is the period of tax stabilization with the exception of mining, heavy industry, and infrastructure sector.


Investment amount /MNT billion/ Stabilization
period /years/
Investment period/years/
Ulaanbaatar Central region/Dornogobi, Dundgobi, Umnugobi, Selenge, Tuv, Darkhan-Uul, Gobisumber/ Khangai region

/Arkhangai, Bayankhongor, Bulgan, Uvurkhangai, Khuvsgul, Orkhon/


Eastern region /Dornod, Sukhbaatar, Khentii/

Western regions/Bayan-Ulgii, Gobi-Altai, Zavkhan, Uvs, Khovd/
10-30 5-15 4-12 3-10 2-8 5 2
30-100 15-50 12-40 10-30 8-25 8 3
100-200 50-100 40-80 30-60 25-50 10 4
200< 100< 80< 60< 50< 15 5

The law would have made the Strategic Investment Law void, however it created a scrutiny of an unstable legal environment by cancelling a law that has been approved over a year ago. Therefore, the MPs agreed on keeping the spirit of this law, and adding the following clause in the new law with the idea of approving procedure is needed for mining, banking, communications, and media sectors if the foreign investment is 33% and above.

Also, the Investment Fund Law, and related Company Income Tax Law amendments, Company Law amendments, Securities Market Law amendments, Innovation Law amendment were finalized and approved in the session.


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