Mongolia

LehmanLaw Mongolia LLP, Mongolia

Economic Overview & Business Opportunities

Mongolia

Mongolia is a landlocked country in East Asia that is bordered by Russia to the north and China to the south. Despite being the world’s 18^th largest country in the world by area, it only has a population of 3 million people – making it the world’s most sparsely populated country. The country also remains heavily nomadic, with approximately 30% of Mongolians being classified as nomads.

Economic Overview

Mongolia has substantial natural resources and minerals, having over 8 thousand occurrences of 80 kinds of mineral deposits. The country accounts for around 16.77% of the world’s reserves but only a small portion of mining resources are currently being put into production in Mongolia. There is hence high growth potential as new deposits continue to be discovered. Some 68% of FDI into Mongolia annually targets the mining sector.

Additionally, 73.6% of Mongolian land is agricultural land. There is great potential for increased exports of high value-added industrial products based on meat, cashmere, yak hair, sheep and camel wool. Over the past decade, the agriculture sector has remained integral to the country’s long-term development strategy as Mongolian exports enjoy preferential access to major foreign markets such as the US, Australia, Canada, the European Union (EU), Japan, New Zealand, Norway, and more.

As the birthplace of Genghis Khan, Mongolia also offers unique natural landscapes and mysterious historical and cultural relics. Tourism has been highlighted as an important sector that will generate high FDI over the years due to Mongolia having a reputation as a key destination for outdoor and adventure sport activities, including trekking, climbing, fishing, hunting, and birdwatching.

Mongolia is also actively developing other sectors such as telecommunications, which is growing fast as foreign investors have developed higher-speed networks, and also renewable energy as the country has suitable wind environment and a high number of suitable hydro-power locations.

Why Invest in Mongolia?

In 2019, Mongolia ranked 74 among 190 economies in the ease of doing business index created by the World Bank Group . Distance to frontier score of Mongolia resulted 67.74 from 100 scores.

The Mongolian government has also passed a law on investment in 2013 which provides incentives such as, but not limited to:

• No approval to enter into market and buy a local company
• No discrimination between foreign and local investors
• Fast registration process
• Stability guarantees
• Longer terms to possess land
• Increased quota of foreign employees
• Simplified visa arrangements

Other reasons to invest in Mongolia also include:

• Rapidly growing economy that is seeking diversification
• Large mineral resource base that can be leveraged for value added processing
• Neighbors two giant markets: Russia and China
• Attractive FDI environment and trade through an open policy committed to reduce bureaucracy and corruption
• Recognition of rule of law and importance of transparency in government regulation
• One of the highest- quality cashmere producers in the world
• Young and well-educated working force