This law allows the Mongolian government to “acquire up to 34% of ‘strategic mineral deposits that were discovered in privately financed explorations and up to 50% of publicly financed discoveries[1].” The royalty tax on extracted minerals is increased from 2,5% to 5% although amended almost yearly since (Hatcher 2016:479).
Costs by mining companies could be amortised for 5 years and losses deducted from tax for 2 years after incurring them.
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The Mongolian government passes a 68% “Windfall profits” tax, the highest in the world, on copper in excess of USD 2600/tonne and gold USD500/ounce[1]. The purpose of which is to increase valued added processing within Mongolia. Read more
This Mineral law, developed with support from the World Bank, passes and provides lax regulations on obtaining exploration licenses and promotes private sector participation and foreign investment. It opened the door to international mining actors.
The amendment encourages foreign investment and protects the rights and property of foreign investors in Mongolia[1], removing restrictions on profit transfers, exemption from customs duties and sales tax and provision of tax holidays. Later amendments (2001, 2002) removed export taxes, and included more investment stability and tax exemption for 10-15 years. This was followed by similar laws in the next three years. 1994: Securities Law; 1995: Introduction of the Stock market, and in 1996 the Banking Law.
[1] http://forum.mn/pdf/mining/foreign_investment.pdf, retrieved 7 September 2018
New legislation passed: law on economic entities and Law of Mongolia on privatisation, new banking law and banking system. These laws enabled the transition of the Mongolian central economy into a market economy. The banking sector consequently suffered through three crises, in 1994, 1996, and 1998[1].
[1] Shagdar, 2007:10.
Legislation was introduced to provide a framework for foreign investment. Amendments to this law took place in 1993, 1998, 2002 and 2013.
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