Options for registering companies in Mongolia
Positioned adjacent to the large market of China, Mongolia offers a unique strategic location, a low-tax environment and abundant natural resources, primarily in the mining sector, which drives most of its foreign direct investment.
The Investment Law provides a framework of national treatment for foreign investors and offers stability guarantees through Stabilisation Certificates, which can fix certain tax rates for long-term projects, reducing regulatory risk.
Mongolia offers international companies the following legal structures for establishing a presence:
Partnership (Хамтарсан нөхөрлөл - Kh.N)
- A General Partnership (Kh.N) is a basic legal entity formed by two or more partners who collectively manage the business.
- The key feature is that all partners have unlimited personal liability for the partnership's debts and obligations, meaning their personal assets are at risk.
- Foreign partners have a US$100,000 capital expectation.
- Partnerships are often used for smaller ventures or professional services where the partners have a high degree of mutual trust and control over operations.
Private limited company (Хязгаарлагдмал Хариуцлагатай Компани - KhKhK)
- The KhKhK is the most common and versatile legal form for foreign investment in Mongolia, offering limited liability to its shareholders.
- The entity requires a minimum of one shareholder and one director, who do not need to be Mongolian nationals or residents.
- A crucial requirement for foreign-invested companies is a minimum total equity contribution of at least US$100,000 (or its equivalent in MNT), which must be proven before registration.
Representative office (Төлөөлөгчийн газар - T.G)
- The Mongolian representative office is a legal extension of the foreign parent company and is strictly prohibited from engaging in any income-generating commercial activity.
- Its permitted functions are limited to market research, liaison, promotion, and protecting the interests of the head office.
- Registration requires a resolution from the parent company and the appointment of an authorised agent. Permission is granted for an initial term of two years and is renewable every two years.
To help you choose the right structure, we have created an ‘at a glance’ summary table for the common company types that outlines key differences in formation processes, requirements and timelines. It serves as a valuable resource for foreign companies looking to set up or expand a business in Mongolia.
Comparison of the common types of companies in Mongolia
Information verified against Investment and Trade Agency of Mongolia