by JAVKHLANBAATAR SEREETER
Director General
Foreign Investment Regulations & Registration Department, Ministry of Economic Development
Ulaanbaatar, 1st March, 2013
Foreign investment policy in Mongolia
Content
Why You Should Invest in Mongolia?
What Are the Main Principals of FDI Policy?
How Does the FDI Perform?
How Does Mongolia Protect Foreign Investment?
Foreign Investment Legal Framework
InternationalAgreements
Bilateral Investment Protection Agreements
National Laws on Foreign Investment
1. Washington Convention on Investment Dispute Settlement
2. Seoul Convention on Investment Insurance
3. WTO Agreements (including TRIMs)
Most-Favoured Nation Treatment
Foreign Investment Legal Framework
International Agreements
National Laws on Foreign Investment
• Mongolia has a Bilateral Investment Protection Agreement with 43 countries.
Bilateral Investment Protection Agreements
Foreign Investment Legal Framework
National Laws on Foreign Investment
International Agreements
Bilateral Investment Agreements • The Foreign Investment Law of
Mongolia (1993)
• The Law Regulating Foreign Investment in Entities in the Strategic Sectors (2012)
Foreign Investment Legal Framework
The Foreign Investment Law of Mongolia
National Treatment
No-Expropriation
Free Repatriation
Foreign Investment Legal Framework
The Law Regulating Foreign Investment in Entities in the Strategic Sectors (2012)
Certain Thresholds
Acquisitions & Transactions
Approval from the Govt. & Parliament
1. Mining
2. Banking & Financing
3. Media & Telecommunications
The Law is enforce from the date adopted. The relevant entities have to comply with the Article 8.2. which is about informing their shares in the strategic sectors of the Law without waiting the Implementing Regulations !
Foreign Direct Investment Performance
FDI by Sectors in 2012.06.30
73.9%
16.3%
1.5%0.9%
0.9%
Geological prospecting, oil exploration & mining
Trade and catering services
Bank and financial services
Light industry
Engineering construction and production of construction materials
Foreign Direct Investment Performance
FDI by Countries
№Top Investors
1990-2012.06.30 % Total /USD/
1 China 31.71 3.65 bln
2 Netherlands 23.16 2.67 bln
3 Luxembourg 9.01 1,04 bln
4 British Virgin Islands 7.48 0.86 bln
5 Singapore 5.45 0.63 bln
6 Canada 4.23 0.49 bln
7 Republic of Korea 2.93 0.34 bln
8 USA 2.54 0.29 bln
9 Hong Kong, China 1.80 0.21 bln
10 Japan 1.60 0.18 bln
Foreign Direct Investment Performance
FDI from Poland /1994-2012/ - 41st (110 countries)
№ Sector nameFDI COMPANIES
% Total % Total
1 Culture, education, science, and press 58.67 1,540.80 6.25 18
2 Trade and catering service 24.27 637.40 56.25 3
3 Geological prospecting and exploration 9.02 236.89 3.13 2
4 Agriculture 2.21 58.00 3.13 2
5 Engineering construction and production of building materials 1.54 40.50 9.38 2
6 Production of foods and beverages 1.52 40.00 6.25 1
7 Furniture 1.20 31.39 6.25 1
8 Electronics manufacturing 0.81 21.17 3.13 1
9 Processing of animal originated raw materials 0.38 10.00 3.13 1
10 Tourism 0.38 10.00 3.13 1
Total foreign direct investment 100.00 2,626.15 100.00 32
Foreign Direct Investment Performance
How Mongolia ranks on Doing Business topics
Source: WB Doing Business Report 2012
Source: WB Doing Business Report 2013
Foreign Direct Investment Performance
FDI Regulatory Restrictiveness Index 2012
Sweden
USA
Norway
Mongolia
Austria
Ukraine
Australia
Kazakhstan
Korea
Russia
China
0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45
0.128
0.116
0.106
0.096
0.089
0.089
0.059
0.408
0.178
0.143
0.137
Source: OECD, FDI RR Index 2012
Foreign Direct Investment Performance
How Mongolia ranks on Doing Business topics
WB Doing Business Report 2012 WB Doing Business Report 2013
Foreign Direct Investment Performance
New government resolutions for infrastructure
Projects Investment
Tavan tolgoi power station 350 mil usd
Auto road reconstruction /in UB/ 92.3 bln tugrkis
“New railway project” by Mongolian railway 55 mil usd
Program of “New Development” to support the national production of building materials
-
Oil refinery industry in Darkhan city will be built in 2015, the capacity is 2 mil tones oil per year.
-
AUTOROAD PROJECT
Tamsagbulag
Altanbulag
Jargalant
Khandgait
DARKHAN
DALANZADGAD
Khanbogd
Tsogt Ovoo
Gashuun Suhait
DORNOGOVY
TUV
DUNDGOVY
MANDALGOVY
SUKHBAATAR
Matad
Bichigt
Havirga
DORNOD
Ereentsav
Yarantai
ULGII
Ulgii
Uench
UMNUGOVY
ZAVKHAN
GOVY-ALTAI
Burgastai
Naranbulag
CHOIR
MURUN
Khatgal
BAYANHONGOR
UVURHANGAIBAYANHONGOR
Khankh
ERDENET
TsahirBattsengel
TSETSERLEG
ARVAIHEER
ARHANGAI
HUVSGUL
BAYAN-ULGII
ULAANGOM
ULIASTAIKHOVD
UVS
BULGAN
SAINSHAND
CHOIBALSAN
BARUUN- URT
UNDURKHAAN
ZUUN MOD
KHENTII
SELENGE
BULGAN
Baga-Ilbenh
Oyutolgoi
Tavantolgoi
Tsagaan suvarga
Shivee huren
Zamyn-Uud
Ulaanbaatar
Ulaanbaishint
Nariin suhaitТT-Tsagaan Suvarge-
Sainshand route
ТT- Gashuun Sukhait
Nariin Sukhait-Shivee Kuren
Sainshand-Baruun Urt-Khuut-Choibalsan route
Khuur-Numrug route
Khuut-Bichigt route
RAILWAY PROJECT – 1800km
POWER NETWORK
Investment opportunities
Issued successfully ‘Chinggis bond’ in the international markets with following significance:
2 fold increase in foreign reserves that supports macroeconomic stability
Provides basis for stabilization of national currency, allowing inflation expectations to stabilize for the first time in 5 years
This gives turn policy to the Bank of Mongolia to decrease policy rates and increase money supply, which will support overall economy
Increased potential credit sources in the economy
Allows financing the Social Insurance Fund and effective implementation of notional personal accounts system
Allows introduction of classical mortgage finance system
1/3 of Bond projects will be implemented from Foreign Direct Investment
Investment opportunities
Law on Concessions of Mongolia (PPP) adopted on 28 January, 2010.
puts state and local properties into economic utilization vast business opportunities for investors the list of concession items is approved by the state and local
administrative bodies decisions shall be made whether to finance from state fund, to
make a guarantee, to organize a tender or to conclude a direct agreement
Foreign legal entities or their consortiums may submit an unsolicited proposal to enter into a concession agreement
Investment opportunities
The Law of Innovation adopted on 22 May, 2012.This law lays down the legal ground for the principles,
governance, organization, financing, state support for innovation activities as well as for utilization of intellectual property as an economic asset. Due to the adoption of this law relevant amendments to support innovation activities have been also introduced to the existing law on foreign investment.
Key Factors Attracting FDI
Developing Country/Opportunities/
A gate to emerging markets in East Asia like China & Russia
Comparatively Low Tax & Less Restrictive Market
A strong democracy
Key Factors Attracting FDI
Securing Stability
- Economical- Political
- Diversification
Institutional Efficiency
- No Corruption- Transparent
- Less Bureaucracy
Expectations from FDI’s
Job creation
Technology transfer
Value addition
Different Sectors
Environment Friendly
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