Mongolia’s legal and business environment has oftentimes struggled to keep pace with efficient and balanced regulation of market players. Over the last two decades Mongolia has made significant strides toward building proper legal environment for business and investment. Especially significant pieces of legislation have been passed in the recent years to regulate and facilitate M&A, foreign investment, joint ventures, corporate finance, securities markets, PPP, business structuring and investment funds. Examples include Concession Law (2010), Banking Law (2010), Company Law (2011), Investment Fund Law (2013), Investment Law (2013), Money Laundering and Terrorism Financing Law (2013), Law on State Registration of Legal Entities (2018), tax laws (2019), Corporate Income Tax Law (2019), Law on Support of Small and Medium-sized Enterprises and Services (2019) etc.

     In 2018, the Mongolian Parliament adopted Law on State Registration of Legal Entities further streamlining registration of businesses in Mongolia. This Law has, among others, introduced certain electronic registration services and shortened time for registration of foreign invested legal entities. In 2019, Revised Taxation Packages Laws (namely, General Taxation Law, Corporate Income Tax (“CIT”) Law and Personal Income Tax Law) were adopted to support businesses, especially small and medium sized ones, and enhance the tax regime in order to meet international standards, particularly in the areas of money laundering and tax evasion compliance. These tax laws, among others, changed previous rules and introduced some new regulations and concepts, such as General Anti Avoidance Rule (GAAR) and transfer pricing (TP) rule, changes in the tax dispute process, changes to rules for deduction of expenses and income recognition for tax purposes, changes to a tax loss carry forward and definitions of a resident and non-resident taxpayers, etc. Law on Support of Small and Medium-sized Enterprises and Services sets out legal basis, scope, forms and management of government support for small and medium-sized Enterprises and Services. Each of these new laws in turn are being expanded and detailed through a set of regulations and bylaws issued by appropriate regulators.