Mongolia passes new investment law to attract foreign investment

The Mongolian parliament passed a new investment law on Thursday to replace a controversial legislation passed in2012 in a bid to reverse declining foreign investment in the country. Under the new law, four types of taxes for investors who invest more than 15 billion tugrug (about 9 million US dollars) will be stabilized, with a stabilization period varying with locations and investment values, from 10 years to 13 years or more. Foreign direct investment in Mongolia fell 41 percent this year compared with the same period of 2012, as Anglo-Australian miner Rio Tinto, which developed a large gold-copper mine in the South Gobi region, halted the development of an underground mine. Facing deteriorating economic conditions and a shortage of hard currency, the Mongolian government is pushing Rio Tinto to resume the mine development and continue its investment in the country. As part of the new measures, Mongolia is also considering supporting gold mining companies. Mongolia's controversial "Strategic Entities Foreign Investment Law", passed in May 2012, restricted foreign investments in sectors such as mining, telecommunications, banking and media to 49 percent of a company.