Legal Market Overview
The legal landscape in Mongolia underwent some prominent changes in 2019, with a core focus on legislative reform. Most visibly the constitution was amended in November 2019, with the balance of power being tipped towards the prime minister rather than the presidency, whose holders after 2025 will be restricted to one six-year term.
In March 2019, the Mongolian Parliament made substantial revisions to the country’s tax laws under the Government’s tax reform packages effective for 2020, including the reduction of withholding tax on direct and indirect transfer of land rights, mineral exploration and mining rights from 30% to 10%.
Other legislative reforms span a range of sectors in the country, including amendments made to the Minerals Law of Mongolia, which increased the rate of royalty for gold and broadened the scope of individuals obliged to pay royalties for minerals; the Public Procurement Law, which included the introduction of a pre-conditioned procurement procedure; and discussion on amendments to the law on renewable energy, including the reduction of tariffs on renewable energy sources, is being mooted.
Against this backdrop of political activity, firms report a fairly stable market, in which mining and renewable energy (wind and solar are singled out) sector projects continue to form significant parts of the firms’ workloads. Chinese investment remains on the increase – notably in acquisition mandates – and investment by US companies has also been reported.
Recent market changes in 2019 saw Enkhbat Batsukh and Uchralbayar Iderkhangai depart from MDS & KhanLex LLP to form KhanLex Partners LLP, while Nominchimeg Odsuren left Avinex Partners LLP to set up Nomin & Advocates LLP.