Why Do Business in Mongolia?
In 2020, Mongolia is ranked as tenth country in the East Asia & Pacific by the World Bank in ease of doing business.
Mongolia is the fast growing region offering endless opportunities and dynamic experiences. PwC Mongolia helps to highlight our connectivity, depth and breadth of our people's skillsets & collaborative nature in which we bring our purpose to life. PwC's priority is to help clients succeed in this dynamic and ever-changing region & to build trust in society.
1. Close proximity to the biggest global resource markets
Mongolia is in excellent proximity to major industrial centers and closest destinations to the Chinese and Russian markets which are the leading countries with their economy and could become major resources in the Asia Pacific region such as Japan, South Korea and as well as India.
We have the great opportunity to become the main resource supplier to the neighboring countries such as China (2nd place of the world economy and 2nd largest importer in the world) and Russia (8th place of the world economy and the 19th largest importer). For example, Mongolia is exporting over 14 types of minerals and has become the largest coking coal exporter to China.
Mining commodities, especially mining products and minerals are the main imports for neighboring China, South Korea, and Japan. For instance, China is importing minerals, oil, distillation products of $316,836.7 Million, 16% of total imports. South Korea is importing minerals, oil, distillation products of $175,719.6 Million, 33% of total imports.
Japan is importing minerals, oil, distillation products of $262,066.2 Million, 32% of total imports.
Also, Mongolia has Economic Partnership Agreement /EPA/ with Japan enabling the close and easy foreign trade relation between two countries.
2. Abundant natural resources and minerals
Mongolia has substantial natural resources and minerals, which promise an unprecedented growth potential. Mongolia as a one of the world's leading mineral resources has over 8,000 occurrences and 80 types of minerals and metals in the 1170 minefield and high prospective for copper, base metals, gold, coal and uranium.
Mongolian Government has issued 2771 active licenses which is only 4.7% of the whole territory /by Feb 2020/. It consists of 1673 Mining licenses, 1% of the territory and 1098 Exploration licenses, 3.7% of the territory.
The mining sector accounted for 24% of the country's GDP, 72% of the gross industrial output, 89% of the total exports and 70% of the foreign direct investment respectively which clearly demonstrates the mining sector's vast contributions to the socio-economic development of Mongolia.
The Central and Eastern parts of the country is relatively well studied while western part is untapped which we are aiming to unlock its mineral wealth by cooperating with our investors.
3. Potential and organic agricultural sector
Apart from mining resources, we have also broad opportunity to develop traditional agricultural sector and a great potential for exports of high value added industrial products.
The sector is one of the priority sectors to the country's economy which is the second sectors to have attracted most foreign direct investment. 73.6% of Mongolian land consists of the agricultural land.
Over $600 million agricultural products have been exported to the last year to China, Russia, Korea and Japan.
Animal husbandry
Mongolia has a traditional nomadic livestock industry which is 100% grass feeding livestock 66.4 million Livestock /30.55 million sheep, 27.1 million goat, 4.4 million cattle, 3.9 million horse, 0.46 million camel/
Crop production
We have totally 114.9 million ha fertile land which is 5 times larger total South Korean land mass and 50 year crop production history with no use of chemicals and pesticides. 60% of Mongolian cultivated area is low in nitrogen and potassium which is easy to use in plants and 34.7% is low in phosphorus concentrations.
Food production
Best potential to product and to export on milk, meat, flour, ferment factories and products made by natural berries
Animal originated production
Mongolia provides 40% of world's cashmere supply after China provides 48%. Currently, we 2.2 million pieces of end production are produced from the possibility of 19.7 million pieces. Therefore, wide cooperation opportunities are open for investors in this field of knitting, weaving, end-production and opening sales channel.
4. A young growing and well educated smart people
Mongolia has relatively high percentage of young population (up to 30 year olds constitute 61% of all population) and more than 60% working force.
Higher education has experienced the most rapid enrollment expansion of any level of education in Mongolia over the past 4 years. We have great young generation that has studied and still studying abroad in the top 50 universities in the world such as Harvard, Oxford, Stanford etc.
The majority of the workforce is multilingual, especially 2/3 is speaking English, Russian, Chinese, German, and Japanese at certain level.
Mongolians possess high IQ skills. Each year, Mongolian young pupils attend to the international memory sports and break the world record. So far, we have set the world record over 10 disciplines.
Nomadic tradition makes us highly adaptable, fast learner and high EQ capable.
Also, the average salary is significantly lower compared to other Asian countries. /$2.6 per hour/.
5. Flexible regulations relating to foreign investors
Mongolia has established Foreign Investment Protection and Promotion Agreement with 43 countries and Double Taxation treaties with 26 countries. Mongolia is the member of the Seoul Convention establishing the Multilateral Investment Guarantee Agency and Washington convention on the Settlement of Investment Disputes.
Mongolian Government has been taking an active policy to attract inward foreign direct investment and persistently conducting the policy that stabilizes the legal environment of foreign investment and providing more favorable condition for the investment procedures and regulations including
The new Investment law /2013/
it enables as open as possible investment environment for investors focusing on no approval to enter into market and buy local company, no discrimination between foreign and local company, fast registration process, stability guarantees /provision of tax stabilization certificate etc./ and flexibility and friendly conditions for investors.
Investment Protection Council /IPC, 2016/
IPC has been established in order to protect the rights of the investors, restore investor's IPC has been established in order to protect the rights of the investors, restore investor's complaints and grievances before it becomes dispute at court or arbitration within the framework of the international agreement, laws and regulations. The Council has received and resolved around 160 requests and grievances in the past and created positive expectation among the investors.
Public-Private Consultative Committee /PPCC, 2017/
PPCC was established under the Investor protection council with the purpose of ensuring equal participation of both public and private sector by reflecting their suggestions and recommendations in policymaking process related to investment and business environment. The members of the Committee consist of the representatives of related ministries and the representatives of the private sector.
6. The lowest utility cost in the region
Mongolia has significantly low price for its water, electricity and mobile.
Attractive cost positions
