Thinking About Starting a Business in Mongolia?
Starting a business in Mongolia is not as difficult as one might think. With the need to promote start-ups, the Mongolian government has lowered the required capital for setting up a joint stock company for 100,000 USD. Theoretically, it is possible to set up an entity in 14 days. Mongolia’s economy is inextricably linked to and reliant on China. Mongolia, in this view, serves as both a large launchpad for investors looking to access China’s market and a suitable gateway to other markets. There are the 4 options for setting up a business in Mongolia:
Representative Office
A Representative Office does not require registration with the legal affairs bureau and tax forms. It is only permitted to carry out functions such as market research, PR etc and no sales activities may be undertaken. It may be suitable if Mongolian clients already have established a good relationship with the foreign exporter and the sales transaction and paperwork is being carried out entirely between the foreign exporter and the Mongolian client and the Mongolian Representative Office’s role is limited. It is not possible to open a bank account or sign a tenant agreement with this status.
Mongolia branch office
A branch office may engage in sales activities. After the Ministry of Justice required companies to appoint a local Mongolian representative, once confirming an office address it has become significantly easier to open a Mongolia branch office. You will need to create an affidavit document concerning establishment of a branch office and have it notarized at the State Registration Office. You will then need to register the branch office at the legal affairs bureau and register the company seal. This is often regarded as an easier option compared to setting up a Mongolian incorporation.
Mongolian subsidiary
The JSC is the most prevalent form of entity and can enjoy credibility and a good social standing. An LLC is less recognized but the number of such incorporation has been rising rapidly including adaptation by some of the large foreign companies. Since the shareholders and managers of the companies are not separated in the case of an LLC, it has the benefit of having more management freedom eg sharing of profits. It is necessary to have at least one director who is resident in Mongolia to set up a JSC. For setting up an LLC, it is necessary to have a personal seal certificate of a representative member who has to be resident in Mongolia.
Limited Liability Partnership (LLC)
An LLC is formed when two or more individuals/corporations conclude a limited liability partnership agreement, pay the investment as agreed and register at the legal affairs bureau. At least one member of an LLC must be resident in Mongolia. It is not possible to convert an LLC to a JSC and nor does an LLC have the authority to be an applicant for licenses/approvals required in regulated business sectors.
Despite language hurdles and uneven execution of existing rules and regulations, Mongolia’s fast-growing economy makes it an attractive place to start a business. Take advantage of your opportunity to establish a business in Mongolia right now.
Check also
Below are other topics that our company has to offer. We provide you with all kinds of information on investing and trading in Mongolia. Starting a business in Mongolia is easy with our support.
External resources
https://e-mongolia.mn/ – You can get over 200 services online from Government organizations. May need to use google translate.
About Us
Do you want to start a business in Mongolia? Then contact us. This is the easiest way. Save time and money. Mongolia Business is a private company that aims to develop, improve, and preserve business between Mongolia and the rest of the world, as well as aggressively promote Mongolia as a foreign investment destination.
Questions about starting a business in Mongolia? Contact us.
