Category Archives: Corporate Commercial

Unlock the Benefits of Trade: How to Obtain a Certificate of Origin in Mongolia



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A Certificate of Origin is essential for businesses exporting products, as it certifies that the goods are partially or fully produced in Mongolia. Issued by the Mongolian National Chamber of Commerce and Industry (MNCCI), this document plays a key role in international trade by verifying the origin of goods for tariff benefits, trade agreements, and legal requirements.

What is a Certificate of Origin?

According to Article 6.2 of the Mongolian Law on Chamber of Commerce and Industry, the MNCCI issues certificates of origin under the “Regulation on determining the origin of export products derived from Mongolia and on issuing the certificate of origin.” This legal document is proof that goods exported from Mongolia are either entirely or partially manufactured within the country.

Types of Certificates of Origin:

The MNCCI issues several types of Certificates of Origin based on specific trade agreements, including:

  • Certificate of Origin Form A
  • Certificate of Origin Form E
  • Certificate of Origin Form APTA
  • Certificate of Origin Form B
  • Certificate of Origin Form-D

These forms are crucial in enabling products to qualify for tariff reductions or exemptions under various trade agreements, ensuring smooth international transactions.

Required Documents for Obtaining a Certificate of Origin

Entrepreneurs looking to obtain a Certificate of Origin must submit the following documents:

  1. Copy of foreign trade contract (buying/selling)
  2. Application form
  3. Invoice (English sample with Mongolian explanation)
  4. Packing list (Invoice & Packing list in Russian/English)
  5. Copy of Incorporation Certificate (individuals provide a copy of their identity card)
  6. Document detailing product composition (if raw materials were imported, include the customs declaration)
  7. Copy of product license
  8. Quality conformity and hygiene certificates
  9. Additional documents may be required for certain certificates, including an additional examination.

Easy Online Submission

For added convenience, businesses can now submit their requests for certificates of origin online by uploading the necessary documents to the MNCCI’s platform. This streamlines the process, making it easier for businesses to meet their export requirements efficiently.

By obtaining a Certificate of Origin, businesses not only comply with international trade laws but also unlock tariff benefits and access to global markets.

Why It Matters

Securing a Certificate of Origin from Mongolia ensures your products are recognized internationally, facilitating smoother transactions, securing tariff advantages, and opening doors to global opportunities.

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“Mongolia’s Bold Move into Crypto: What You Need to Know About the New Cryptocurrency Law”



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In December 2021, Mongolia enacted the Virtual Property Service Providers (VPSP) Law, bringing the nation into the digital finance era by legalizing and regulating cryptocurrency trading and exchanges. With a growing interest in crypto markets, Mongolia sought to establish a robust legal framework to protect against risks such as illicit activities while promoting transparency. Under the law, crypto service providers must register with the Financial Regulatory Commission (FRC) and adhere to strict Anti-Money Laundering (AML) and Know Your Customer (KYC) policies.

The VPSP law also emphasizes investor protection, ensuring crypto platforms disclose risks comprehensively. Income from crypto trading is taxable but exempt from value-added tax, reflecting Mongolia’s intent to capitalize on the evolving digital economy. Beyond finance, Mongolia is exploring blockchain technology in governance, public services, and supply chain management, showing a commitment to innovation and national growth.

For businesses venturing into Mongolia’s crypto market, compliance with these regulations is crucial. The law, aimed at balancing global trends with national interests, represents an important step in Mongolia’s economic diversification strategy.

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New Criteria for Savings and Credit Cooperative Activity: A Comprehensive Guide to Financial Health and Risk Monitoring



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On June 5, 2024, Mongolia’s Financial Regulatory Commission passed Resolution No. 286, introducing new “Criteria for Appropriate Ratios of Savings and Credit Cooperative Operations.” This critical update requires savings and credit cooperatives to assess and mitigate risks by adhering to four essential groups of indicators:

  1. Asset Quality and Security Indicators
  2. Indicators of Efficient Financial Structure
  3. Indicators of Costs and Expenses
  4. Indicators of Ability to Quickly Execute Payments

Each group has specific methodologies designed to ensure precise evaluations. These indicators collectively measure the financial health and risk exposure of cooperatives, leading to an overall assessment that is vital for operational stability.

Quarterly Reporting Obligations

Savings and credit cooperatives must calculate these ratio indicators every quarter, submitting detailed reports to the Financial Regulatory Committee by the 10th of the month following each quarter. The reports include various appendices covering areas such as:

  • Lending and Loan Allocation
  • Deposit Interest Rate Surveys
  • Large Borrower and Affiliated Entity Loan Reports
  • Capital Contributions and Large Depositor Reports
  • Financial Structure Efficiency
  • Income and Expense Ratios
  • Payment Execution Capabilities

The goal is to ensure transparency, maintain the financial stability of the cooperative, and protect member interests.

Protecting Financial Stability

By implementing these guidelines, the Financial Regulatory Commission is aiming to safeguard the integrity of savings and credit cooperatives in Mongolia. This initiative enhances the trust and security within the country’s financial system, ensuring that cooperatives operate effectively while minimizing risks.

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How to De-Register a Company in Mongolia?



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Get ready for an exciting journey through the process of company liquidation in Mongolia! Whether it’s initiated by a decision of the shareholders or an order of the court, the process is filled with twists and turns.

If the shareholders decide to liquidate the company, the Board of Directors (or the executive body in its absence) will prepare a draft Shareholders Resolution of Liquidation. This resolution must include the appointment of a liquidation commission, authorization of its powers, a timeline for liquidation, and a procedure for distributing the company’s remaining property among shareholders after creditors’ claims are satisfied. The resolution must be approved by an overwhelming majority of shareholder votes.

Once the resolution is approved, the company must notify the relevant state registration authority in writing within three working days and attach the original decision on liquidation. The executive authority of the company will then be terminated, and the liquidation commission will take over.

The liquidation commission is responsible for publicizing the pending liquidation of the company via the media. If the company has any licenses, the commission will request that they are canceled and returned to the relevant authority. The commission must also complete several actions during the liquidation process, including officially handing in the State Registration Certificate of the company, closing the company’s bank accounts, handing over the company’s official seal to the police, and obtaining a form from the Customs Office to confirm no related taxation issues remain on behalf of the company.

The Tax authority will then examine and investigate the company’s tax records, and an auditor will be required to handle the closing financial statements. An accountant will issue the closing balance of the company. Once the Liquidation commission has submitted the required documents to the State Registration Office (SRO), the SRO will remove the legal entity from the state register. The registration body will announce publicly the deletion of the company from the State Register. It will likely take 6 months to 1 year to complete the company liquidation process.

What is the Capitalization Requirement for a new Foreign-Owned Company in Mongolia?



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Our team of Mongolian lawyers regularly field questions related to Mongolia’s capitalization requirements for the establishment of a new Mongolian company.

Mongolian law requires payment of at least USD $100,000 in capitalization funds per foreign shareholder when establishing a foreign owned company in Mongolia. This means a company established by a single foreign shareholder will be required to pay-in at least $100,000, while a company established by two foreign shareholders must pay at least $200,000. This requirement is the same whether the shareholder is a foreign individual person, or a legal entity.

A frequently asked question is what are the permitted uses of these funds after the company is successfully established. The good news is that once the company has been formally registered and operations commence, the initial capitalization funds will be available for normal use by the company in connection with the company’s expenses and liabilities incurred in the course of operations. The government of Mongolia, generally does not track how these capitalization funds are used. With the right contractual arrangements in place, the new Mongolian company will even be able to remit a significant portion of the initial capital back to the foreign shareholder/s.

Prospective investors should note however that in the event the Mongolian entity encounters difficulty, it will be legally liable up to the $100,000 threshold, regardless of whether that initial payment remains on the company’s books, or has been spent or remitted abroad.

It is important to note that where the total foreign ownership of a company is lower than 25% the company will not be considered foreign owned for the purposes of Mongolian law, and the $100,000 capitalization requirement per foreign shareholder will not apply. As a result, it is common for foreign investors interested in entering Mongolia to work with a local partner holding 76% of a new Mongolian entity, while the foreign side holds only a minority 24%. In some cases this arrangement works well, while in others differences in strategy or management style between the foreign investor and the Mongolian partner may lead to disagreements. When considering a prospective joint venture of this kind, care must be taken to structure the legal documentation appropriately to best protect the foreign shareholder.

Another model we have encountered is a “Nominee Shareholder” arrangement. In this structure, the foreign investor reaches an agreement with a Mongolian national individual or company to establish and hold the equity in a Mongolian entity while acting on behalf of the foreign investor. This model can be effective and is permitted by Mongolia laws, however this structure carries significant potential risk in the event the wrong Mongolian Nominee is selected. As the Nominee Shareholder will have full control over the Mongolian company operations and management care must be taken in the selection of the Mongolian side, as well as in putting in place the appropriate legal agreements to limit the Nominee Shareholder’s authority to act and to maximize the foreign investor’s rights to recover from the Nominee.

Setting up a Company in Mongolia



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Establishing a new company in Mongolia is relatively easy, however as with any country, there are unique legal and business practices which require careful consideration and planning.

There are four steps to establishing a company in Mongolia.  Firstly, a name for the new company must be formally registered, along with sector in which the company will operate.

This can be done via filing an application for reservation of the legal entity’s name with the Legal Entity Registration Office (LERO). LERO will verify and confirm the proposed name of the new company by checking it for similarities with other previously registered corporate names. LERO will confirm the name of the new company if it is not too similar to the name of an existing legal entity. A newly confirmed name will be reserved for 10 business days.

Secondly, a bank account must be established in the name of the new company. For a new company established by one or more foreign shareholders totaling at least 25% of ownership of the Company, USD $100,000 must be deposited into the account for each foreign shareholder. This is a legal requirement and not optional.

Thirdly, the company must be formally registered with the LERO. LERO will decide whether or not to register the new company 10 working days after receiving application documentation for a foreign invested company.

The final step will be to obtain a formal company seal (stamp) for the new company. The stamp will be used to execute contracts and official documentation. After each of these steps has been completed, the new company is ready to start operations.

Our Mongolian lawyers have successfully established companies in Mongolia for a variety clients in various business sectors. We are also able to provide registered address services, document management services, accounting and payroll services, tax preparation and reporting services.

What is the difference between Salary and Remuneration?



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Under the Labor Law, an employee’s remuneration consists of base salary, additions, additional pay, vacation pay, bonuses and incentives.  

Additions are paid to certain employees depending on specialty rank or degree, abnormal working conditions or responsibilities, as well as for utilizing the employee’s high professional skills or work experience in respect of Contract employees. Additions could also include similar additions provided by law, collective agreement or internal policies. 

Additional pay includes overtime pay, pay for performing work outside the scope of one’s job duties or job position (including simultaneously or in combination with the current job), pay for substitution of another employee, and other similar additional pay stated in law, collective agreement or internal policies (work rules). In respect of Contract employees, additional pay may be paid on the basis of work results.

Bonuses and incentives are paid for the employee’s work result or contribution to the company’s achievement, which include bonuses, one-time monetary incentive for completing a certain special task, and other monetary incentives paid pursuant to law, agreement or internal policy. The remuneration does not include the following: 

      - all types of statutory benefits, including for pregnancy and maternity leave, loss of working ability, unemployment, pension etc. 

      - reimbursements; and 

      - allowance income, including for transportation, fuel, housing and meal discounts.

The remuneration structure above applies to expats employees under contracts as well.

Basics of Agent/Principle Law in Mongolia



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A citizen or a legal entity may grant other another person authority to perform certain legal actions on his or her behalf, in accordance with law or on the basis of an appropriate authorization. The appointed representative, or “Agent”, has a duty to perform the designated activity on behalf of the entrusting party, the “Principal” within the authority delegated by the Principal, and the rights and obligations that arise from it belong only to the Principal.

Agent or representative of this kind may be a citizen or legal entity with full, partial, or limited civil law capability.

A written authorization must comply with certain legal requirements. A written authorization not meeting these requirements shall be invalid:

  • be signed by principal, and legal entity’s authorization shall be signed by executive and attached with chops or seal on it;
  • authorization entitling to receive, or transfer, or administer juristic person’s assets shall be signed by the accountant beside executive;
  • issued date shall be indicated;
  • if provided by law, it should be certified by notary;
  • if authorization was issued for certain period of time, the duration should be indicated.

Authorization shall be issued for a specific period of time or without a certain time. The power of authorization issued for a certain period of time must be no more than three years, authorization issued without a specified time shall be valid for up to one year period from the date of issuance.

Obligation to Report Beneficial Owner



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Does a new Mongolia company have to register their beneficial owner’s information with Mongolian authorities?

Mongolia revised the General Tax Law in 2019, and the article 18 of the law regulates the exchange of taxpayer information with other countries that have the international agreement, treaty or convention (Agreement) concluded with Mongolia. Among those exchanges is information of the legal entity’s beneficial owner.

Therefore, Mongolia has implemented a policy to create database of beneficial owner’s information of companies in order to provide opportunities to enhance cooperation between the State Registration Authorities and the Tax Organization as well as to exchange information for tax purpose with other countries that have the agreement with Mongolia.

In this connection, additional amendments to the Law on State registration of a legal entity were adopted which requires all registered legal entities in Mongolia to register information about their beneficial owners at the Legal Registry of the General Registry of Mongolia. Also, new establishing companies is entitled to register the company on the basis of the requirement to register their beneficial owner’s information.

Under the Law on Combating money laundering and the financing of terrorism and the Law on State registration of a legal entity, a beneficial owner is a person who has a significant or controlling ownership interest solely or jointly with others of holds a management function of the legal entity or is represented by other persons or ultimately owns the legal entity earning benefit and profit by exercising control of the legal entity, its transactions and arrangements to implement the transactions.

To summarize the above, newly founded company is obliged to register beneficial owner’s information with the state registration authority with an application to register a company.

Domain Name Dispute Settlement in Mongolia



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Recently, one of our clients had been seeking our advice on Mongolian communications law, particularly on the domain name registration and dispute settlement issue. Meanwhile providing legal analysis to our client’s inquiry, we have decided to provide the post in concern with background of the domain name monitor in Mongolia.

Communications Regulatory Commission of Mongolia (CRC) is the government authority that is responsible to monitor the implementation for registration and usage of domain name. Only one company, a Datacom LLC, has the authority from the CRC to register domain name in Mongolia. Datacom LLC’s website has a WHOIS owner database.

One of the powers of the CRC is resolving disputes between a domain name registrant (domain name holder) and a third party. In 2020 CRC adopted a “Regulation on registration and use of domain names”. This Regulation specifically provides for that “CRC will follow laws and regulations of Mongolia when processing requests and complaints. When dealing with issues not specified in laws of Mongolia and this Regulation, CRC may follow relevant parts of the Uniform Domain Name Dispute Resolution Policy adopted by the Internet Corporation for Assigned Names and Numbers (UDRP)”.

Pursuant to Regulation on registration and use of domain names, after the third party (other than domain name registrar and domain name registrant) submits a request or complaint, provided that all required documents are submitted along with request or complaint, CRC shall notify domain name registrar, domain name registrant and other relevant parties and obtain relevant response from them within 14 days from the date of submission of request or complaint. CRC will resolve the request or complaint within 21 days from the date of receipt of relevant responses. Depending on the content of request or complaint CRC may appoint a panel consisting of 3 experts with the purpose of carrying out an expert opinion on the matter. In such case the time to process a request or complaint against domain name will be longer. Pursuant to this Regulation, if CRC deems necessary, complaining party and domain name registrant may participate in the dispute resolution hearing.