Legal Market Overview
Like many countries around the world, the economic impact of the COVID-19 pandemic saw the Mongolian economy contract by 5%. Nonetheless, the circumstances have created a number of new government backed restructuring, lending, and funding initiatives into the market to provide additional support to help mitigate the impact on businesses and households. Prime Minister Luvsannamsrain Oyun-Erdene came to power in early 2021, and promptly initiated and led a 30-year, long term development policy for Mongolia (Vision-2050), which was approved by the State Great Khural in 2020. 2020 also saw the issuance of a new Mongolian government sovereign bond (the ‘Nomad Bond’) in the amount of US$600m to repay the five-year Mazaalai bond which reached maturity in April 2021.
Legislative amendments to banking laws have meant that all banks have become public entities and have had to conduct IPOs on the Mongolian stock exchange to reduce the concentration of shareholding to a maximum of 20% in the next 1-2 years. Green and ‘climate’ finance continues to be a niche in the market, with financing options being created with the environment in mind, and investments in wind and solar farms continuing to be of interest by Japanese and international banks.
New laws on intellectual property also entered into force in December 2020, with the aim of enabling rights holders to receive better economic benefits to exercising these rights.
As a key part of a commodities-driven economy reliant on coal and other natural resources such as minerals, the Mongolian mining sector has seen continued investment and transactions. Despite the COVID-19 pandemic and overall economic slowdown, Australian and Asian companies continued operations within the country.
The legal service offering in Mongolia is split between international firms and Mongolian firms. Local Mongolian firms practice Mongolian law, and international firms practice international law, though collaboration between the two is common, as the different offerings in certain circumstances are complementary. Local firms continue to lead the market with Melville Erdenedalai LLP, MahoneyLiotta LLP and KhanLex Partners LLP at the forefront in terms of corporate, banking, and finance. MDS & KhanLex LLP is another leading domestic firm. Australian firm Minter Ellison Lawyers is a particularly strong international firm active within the jurisdiction, and has an offering comparable to local firms whilst also offering international expertise.