Mongolia passes new investment law to attract declining foreign investment; scraps controversial foreign investment law

Mongolia passes new investment law to attract  foreign investment; scraps controversial foreign investment law
ULAAN BAATGR, Oct. 03 (Moninfo) --Today, Mongolian parliament passed new investment law to atract foreign investment. 83 percent of the 76-member Mongolian parliament members voted for this law. Along with passing of this new investment law, controversial  law “Strategic Entities Foreign Investment Law (SEFIL) which was passed in May 2012 is scrapped. This controversial law was designed to restrict foreign investment in firms in sectors like mining, telecommunication, banking and media  to just 49 percent. 

According  new investment law, four types of taxes for  investors which invested more than 15 billion tugrug ( about 9 million dollars) will be stabilized. Tax stabilization period for the investors will increase depending on location and investment made. For example, in  300-500 billion tugrug investment in region around Mongolian capital, the investors will enjoy 10 year tax stabilization period and if distance from central region is further, the tax stabilization period will increase. For same amount of investment in central region, stabilization period will be 11 years and in western region, it is 13 years etc. Mongolia is divided into Ulaanbaatar, central, mountainous region, eastern region, western region.

This year Mongolian FDI fell by 41 percent compared to 2012 as Anglo-Australian miner Rio Tinto developing large gold-copper mine in South Gobi region of Mongolia announced a halt to the development of an underground mine estimated to hold 80 percent of the mine’s value.
Facing with deteriorating economic condition and shortage of hard currency, the Mongolian government is pushing Rio Tinto to resume the underground mine development and continue its investment in the country. As part of the measures, Mongolia is also considering supporting gold mining companies. Enditem.

Source:MonInfo news service 
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