Several draft laws that are designed to attract foreign direct investment were submitted to Speaker Z.Enkhbold by the Minister of Economic Development N.Batbayar on Tuesday September 10th.

If these draft laws are passed by Parliament, the previous laws on the regulation of foreign Investment of business entities operating in sectors of strategic importance (Strategic Investment Law) might be over-turned.

The reasons behind the drafting of a new strategic investment law are multiple.

The latest statistics report says that Mongolia, where 12 thousand entities from 112 countries were registered, has benefited by over 14 billion US dollars of foreign investment.

Almost 80 percent of the foreign investment was done between 2008 and 2012. The statistics report also indicates that a large amount or 74 percent of the foreign investment was directed to the geology and mining sectors in Mongolia.
 
But the foreign investment flow in Mongolia declined in March 2012. Around 42 percent of investment in the Mongolian economy that was made by foreign countries and international organizations dropped compared to the same period last year. This happened at the same time as the first phase of the massive Oyu Tolgoi project in Mongolia.

The content of the new draft law:

Firstly foreign and national investors must benefit fairly according to the regulations. Foreign investors complained that “Mongolian lawmakers frequently “fix” the foreign investment law and the legal environment is temperamental”. The new draft law will regulate that “any amendments into the law will be passed with notification not less than three MPs.”

The current foreign investment law refers to investment of “strategic importance” meaning the sectors of minerals, banking, financing, media and telecommunications. The new draft law will not classify sectors as having “strategic importance”.