Position Paper on Amendments to the Investment Law
The Investment Law was enacted in 2013 and was relatively progressive, offering several incentives to investors. However, numerous challenges in its implementation have created burdens for investors, including the inconsistency of provisions related to tax incentives offered by the law and tax law and a capital requirement of 1 00,000 USD for each investor. The long-awaited amendments were drafted by the newly established Ministry of Economy and Development (MED). It is commendable that the ministry, under the personal leadership of its minister, convened a series of inclusive and participatory consultations, provided English and Mongolian versions of the draft, and responded with detailed feedback to comments from stakeholders. The draft has several progressive features, including removing the 100,000 USD capital requirement and using arbitration as a dispute resolution mechanism. However, the amendments removed all tax-related incentives, stating that tax laws should deal with these matters. The Ministry of Finance does not plan to draft any amendments soon, so the Investment Law amendments may be a declarative piece of legislation. AmCham Mongolia submitted about 80 comments on the amendments, highlighting its top 10 comments, and stressed the importance of comprehensive business environment and investment climate reforms through comprehensive legislation, the enforcement of court decisions, and expedited tax and investor dispute mechanisms. The MED included most of AmCham's recommendations in the amendments.