Mongolia is a landlocked country in Central Asia and East Asia, located between China and Russia.
- The current population of Mongolia is 3,130,462 as of Tuesday, September 11, 2018, based on the latest United Nations estimates.
- Mongolia population is equivalent to 04%of the total world population.
- Mongolia ranks number 137 in the list of countries (and dependencies) by population.
- The population density in Mongolia is 2 per Km2(5 people per mi2).
- The total landarea is 1,553,560 Km2 (599,833 sq. miles)
- 4 %of the population is urban (2,259,337 people in 2018)
- The median agein Mongolia is 4 years.
Tourism
Mongolia is a unique and relatively unexplored travel destination that offers a great combination of scenic natural features, a wide variety of untouched landscapes, nomadic life style and culture. Travel organizations in Mongolia date back to half a century ago, but the private sector-based tourism is barely twenty years old.
Economy
Economic activity in Mongolia has traditionally been based on agriculture and livestock. Mongolia also has extensive mineral deposits: copper, coal, molybdenum, tin, tungsten, and gold account for a large part of industrial production.
In its latest Asian Development Outlook (ADO) 2018, ADB projects Mongolia’s gross domestic product (GDP) growth to moderate to 3.8% in 2018 before rising again to 4.3% in 2019 from the 5.1% growth in 2017. This is following the 1.2% growth in 2016. Continued investment in mining, particularly in the development of the Oyu Tolgoi underground mine, will continue to drive growth. Transportation bottlenecks, however, will prevent coal exports from matching 2017 performance, although these will ease somewhat in 2019.
Principal Sectors of the Economy
Industry
The industry sector consists of four main sub-sectors: (i) mining and quarrying, (ii) manufacturing, (iii) construction, and (iv) electricity, gas steam and air conditioning supply. The industry sector, which accounted for 30.8% of nominal GDP, recorded a growth rate of 9.1%. This growth rate was mainly driven by the growth of the mining and quarrying sub-sector, which recorded a growth rate of 9.1%.
Agriculture
The agriculture sector consists of agriculture, forestry and fishing and accounted for 12.3% of nominal GDP. The agriculture sector recorded a growth rate of negative 0.5%. This decrease in growth was mainly a result of the continued effect of the severe loss of livestock in late 2009 and early 2010 as a result of extreme winter conditions.
Service
The service sector consists of six main sub-sectors: (i) wholesale and retail trade, (ii) transportation and storage, (iii) information and communication, (iv) financial and insurance activities, (v) real estate activities and (vi) education. The service sector, which accounted for 41.8% of nominal GDP, recorded a growth rate of 26.8%. Growth in the service sector was attributable to growth in almost all six service sub-sectors, which was primarily driven by the rapidly growing economy.
Mining in Mongolia
Mongolia is rich in mineral resources and has some of the world’s major mineral deposits including gold, copper,uranium and coal. Geological data gathered since the 1920s and exploration to date has proven vast mineralreserves, but only 15 per cent of the country has been fully mapped. There are over 6,000 deposits of around 80 different minerals discovered to date in Mongolia. Key mining projects are expected to have a positive impact on Mongolia’s overal economic situation as commercial production commences.
Tax
| Sources of income | Applicable tax rate (%) | |
| Residents | Non-residents | |
| Salary income | 10 | 20 |
| Income from property (i.e. dividends, royalties, interest, capital gain from sale of securities/stocks) | 10 | 20 |
| Sale of immovable property (gross) | 2 | 20 |
| Income from scientific, literary, and artistic works, inventions, product designs, and useful designs (gross); income from sports competitions, art performances, and similar income (gross) | 5 | 20 |
| Income from betting games, gambling, and lotteries (gross) | 40 | 20 |
SOCIAL AND HEALTH INSURANCE (SHI)
Effective from 1 January 2018 According to the change, both employer and employee contributions will increase progressively on an annual basis from 2018 till 2020. The following table summarizes the comparison of the old and new rates introduced.
CUSTOMS DUTY
Customs duty on imported tobacco – Effective from 1 May 2017
In regards to agreement with the World Trade Organisation (WTO), parliament agreed to increase customs tariffs on imported tobacco to the maximum rate set by WTO.
According to the change, customs duty of 5% will increase up to 20-30% depending on the classification. Rates are set out below:
- 30% tax rate: cigarettes or cigar containing a tobacco substitutes, processed tobaccos and water pipe tobacco or pipe tobacco.
- 20% tax rate: homogenized or reconstituted tobacco, snuff
- 5% tax rate: cigarette for production of cigarettes
EXCISE TAX
Excise tax on import of vehicle – Effective from 1 May 2017
The exemption of excise tax on import is no longer applicable to Hybrid, LPG-fueled and electric vehicles. The excise tax on import shall be imposed on these vehicles as per the ordinary rates where 50% tax refund is available.
Excise tax on fuel, tobacco and alcohol – Effective from 1 January 2018
The excise tax rates on fuel, tobacco and alcohol products will be increased from 1 January 2018 as follows: • 10% increase in 2018
- Additional 5% increase in 2019
- Additional 5% increase in 2020
Why Invest in Mongolia
Why Mongolia? In addition to being the fastest growing economy in the region and one of the fastest growing in the world, there are a number of compelling reasons why Mongolia is the ideal destination for investors to consider. These include an extremely benign regulatory environment for property ownership, with the rights exercised by international investors regarding property ownership being identical to those enjoyed by Mongolian citizens. The ‘floating freehold’ system provides investors with inalienable freehold rights to real estate in Mongolia.
There are no currency controls. The currency is fully convertible and freely floating and there are no issues repatriating profits out of Mongolia. Indeed, recent exchange rate weakness presents a strong buying opportunity for investors deploying foreign currency into the property markets.
It has fantastic tax laws. The tax laws in Mongolia are clear-cut with the 10% income tax representing one of the lowest income tax rates in Asia. In addition there is no concept of capital gains tax in the market and only a 2% stamp duty tax paid upon eventual sale of the property.
It’s below the radar. Mongolia is a fast growing frontier market that remains relatively unknown to the rest of world. As such, competition for good assets in good locations from other foreign investors remains limited.
Leading in Land and Livestock
Mongolia is leading in land and it is 1.566.600.00 km, it is ranked on 19th, one per km2 is # 2 in the world. Livestock total of 55 million 957.6 thousand head.
Neighboring with two largest global economies and commodity markets
Mongolia is bordered by Russia to north and China to the south. This unique geographic location provides an opportunity to supply any products produced in Mongolia to two huge markets of the world.
Young and well-educated population
Young and well- educated population of Mongolia is considered to be a great asset as investors are facing considerable challenges elsewhere in Asia. Mongolia offers excellent opportunities with its growing, young, and dynamic population — an indispensable contributor to a strong labor pool and a lucrative domestic market.