The plenary session meeting of Parliament passed an amendment on the Foreign Investment in the Business Entities Operating in Sectors of Strategic Importance law with 74.5 percent approval on April 19th. The Standing Committee on Economy held the final discussion on foreign investment in firms with strategic assets before the plenary session meeting on Friday.

Under Article 4.7 of the current Law of Foreign Investment in Business Entities Operating in Sectors of Strategic Importance, enacted by parliament on 17 May 2012, it states “Parliament must approve an acquisition submitted by the Government when a foreign investor acquires more than 49% of the equity of a business entity operating in sectors of strategic importance and the investment exceeds 100 billion MNT.  All other acquisitions are subject to the approval of the Cabinet.”

The Government submitted a draft to make some changes to the law amending Article 4.7 of the law by stipulating “Parliament as the approval authority only in those transactions where a non-Mongolian state-owned enterprise acquires more than 49% of the issued shares of a Mongolian company. The Draft Amendment removes investments by foreign private investors from the scope of Parliamentary approval and deletes the MNT 100 billion threshold in its entirety”.

The changes to the foreign investment law are believed to improve the legal environment for foreign investment and it is hoped will bring possible improvements in the economic growth of the country.