In 2020 Mongolia’s economy is probably going to slow down primarily because of the antagonistic effects of the COVID-19 worldwide pandemic. Monetary development debilitated to 5.1% in 2019 from 7.2% in 2018 and 5.4% in 2017 basically determined by a drowsy exhibition of the mining part following declining ware costs and lower nature of mineral fares.
On the interest side, hearty private utilization, solid remote direct speculation (FDI) inflows, and higher government venture were incompletely balanced by the negative development commitment of net fares.
Mongolia’s monetary parity in 2019 was in surplus for the second back to back year in the midst of income overperformance. The nation’s monetary position has improved fundamentally to an excess of 1.4% in 2019 and 2.6% in 2018 from a deficiency of 15.3% of GDP in 2016.
Monetary development is relied upon to decrease further in 2020 as measures taken in Mongolia and internationally to contain the spread of COVID-19 are burdening the flexibly and request sides of the economy.
Mining and services sectors have just endured a shot. In any case, except if the effect of COVID-19 is drawn out locally and universally, development is relied upon to quicken in the medium term, bolstered by more grounded stimulus in the mining area, private utilization, and private venture.
Main sectors of economy
The economy of Mongolia is anchored in the agribusiness, mining, administration and development segments.
The development organizations in Mongolia have utilized more than 100,000 individuals and simultaneously made around 130,000 additional employments in a roundabout way. The nation produces over 60% of its development materials locally.
The mining division in Mongolia represents about 21% of the GDP. The nation is wealthy in huge copper, gold, and coal stores. The biggest mining place in Mongolia is the Oyu Tolgoi (OT) Copper-Gold mine found in the southern Gobi locale.
The agricultural sector represents over 20% of Mongolia’s GDP and 14% of remote trade incomes. In 2008, there were an aggregate of 42.8 million heads of animals in Mongolia which spoke to 85% of the absolute rural creation. The creatures kept in the nation incorporate cows, ponies, camels, sheep, goats, and pigs. Harvest creation is likewise a critical piece of farming in Mongolia.
Taxation in Mongolia
- Corporate income tax rate – 10% on taxable income up to MNT 6 billion, and 25% on any excess taxable income
- Branch tax rate – 10% on taxable income up to MNT 6 billion, and 25% on any excess taxable income, plus a 20% tax on remittances to a foreign head office
- Capital gains tax rate – 10% on taxable income up to MNT 6 billion and 25% on any excess taxable income
- Residence – A corporation is a resident if it is incorporated in Mongolia or if its place of management is in Mongolia.
- Rate – Taxable income up to MNT 6 billion is taxed at 10%, and any excess taxable income is taxed at 25%.
- Capital gains – There is no separate capital gains tax; gains from the sale of movable and immovable
- property are taxed at the standard corporate income tax rates.
Investing in Mongolia
Mongolia offers a business-friendly and favorable environment with numerous incentives. The Government of Mongolia is fostering an attractive environment for FDI and trade through an open policy and ensuring public sector efficiency and legal certainty.
Why should you invest in Mongolia?
- Good location near Russia & China
- Young working force
- Developing Industry and Infrastructure
- Private Sector & Privatization /privatize major state assets
- PPP & Modernizing Infrastructure
- Ensuring guarantee for investors /tax & non tax/
- Thriving Telecoms & IT sector