Draft amendments to Law on Investment submitted to SpeakerPolitics
Ulaanbaatar /MONTSAME/. On June 21, MPs Kh.Gankhuyag and D.Unurbolor presented draft amendments to the Law on Investment to Speaker G.Zandanshatar.
With the current Law on Investment in place, a foreign company has to choose its status as a business entity with foreign investment or a representative office prior to starting its business in Mongolia. Furthermore for entities, no less than 25 percent has to be owned by a foreign company through an investment of no less than USD 100 thousand. The MPs considered that the threshold is unnecessary for establishing a business entity with foreign investment. However, it is more suitable to specifically state the minimum amount of investment in Mongolia in the case where an investor and their family applies for a residence permit.
The aforementioned requirement for the minimum amount of investment is likely to cause difficulties for those interested in making further investments after investing a small amount initially. As for representative offices, they are not permitted to run business activities despite there being no restrictions regarding investment. Thus, they developed the draft amendments in a way so that:
• foreign and domestic investors are considered as the same, re-defining the term, ‘business entity with foreign investment’,
• the requirement for a minimum investment of USD 100 thousand is removed for entities with foreign investment, and added the requirement for the case in which an investor and their family apply for a residence permit,
• and developed the corresponding necessary amendments to be made for the Law on State Registration of Legal Entities.