Recommendations From The International Conference “Investment Climate: Stability”

MONGOLIA BUSINESS NEWS 22 November 2019 Hits: 2617

The international conference “Investment Climate: Stability” brought together the Government of Mongolia; Bank of Mongolia; World Bank; finance organizations; foreign ambassadors to Mongolia; Mongolian National Chamber of Commerce and Industry; Business Council of Mongolia; Mongolian National Construction Association; entrepreneurs from all sectors; investors; researchers; and media representatives to discuss the current state of investment, things to pay attention to in the future, and steps for implementation. Based on the presentations, discussions, and ideas exchanged at the conference, the following RECOMMENDATIONS have been produced:

Create a favorable environment for investment and ensure legal and regulatory stability:

Maintain stability in the tax environment, especially in sectors where returns and benefits are reaped over the long-term and where there is high dependence on foreign markets. Laws and regulatory frameworks concerning taxation of such sectors need to be stable.
Approve and begin implementation as soon as possible of the prepared bill for updating the system for resolving insolvency, by way of re-financing insolvent legal entities through restructuring and reorganization, and by clarifying the duties and roles of organizations that provide such professional services.
Erase the bureaucracy faced in activities related to exports and imports, and create a favorable foreign trade regulatory environment. Quickly introduce a unified database and an electronic all-in-one service.
Digitize government services, increase usage of digital signatures, and especially make transparent and digitize the procedure for obtaining permits as a first step.
Create an incentives system to reward companies that attract foreign investment, such as by offering certain discounts on taxes and license obtainment.
Translate Mongolia’s key legal documents pertaining to investment and taxation into the official languages of the United Nations, and promote them internationally.
Erase conflicts among laws governing relations pertaining to land, foreign currency, work force, bankruptcy, and licensing, and make it so there are comprehensive regulations, guidelines, and rules for implementation of a law before said law takes effect. Cease the habits of laws not being produced on time and laws being explained and used at one’s own discretion or liking.
Create a diverse and unified database for research, reports, and briefings related to business and investment produced by international organizations, research and scientific organizations, NGOs, private researchers, and the private sector; and make the Economic Standing Committee of Parliament and the Investor Protection Council responsible for determining and coordinating the method of implementation as well as the person or entity responsible for implementing recommendations and ideas reflected in the database.

Protect investment and strengthen trust:
- Certify through law the status of the Investor Protection Council. Complete the mechanism for resolving investors’ disputes, and inform, introduce, and enable them to use it.
- Produce a consolidated list of clauses in laws and regulations that hinder private investment, and conduct a review on whether to amend or annul them. Create regulations that protect property from being “indirectly” seized or confiscated.
- Ensure coherence between the central government and rural administrations in their works.
- Continuously utilize a public-private consultation mechanism to facilitate things such as the private sector and its representative organizations leading and participating more proactively in improving the business environment and implementing on oversight to ensure laws and resolutions are followed by all simultaneously.
When it comes to determining short and medium term principles of the Government to abide by in terms of investment and increasing domestic economic benefits of investment:
- Continue to attract foreign direct investment in the mining sector, and support private investment for processing manufacturing and infrastructure geared towards increasing domestic value-added production.
- Based on prudent grounds determining which sectors to expand to enhance economic diversification, produce and implement plans and policies to attract investment in these sectors and acclimate them to Mongolia. In particular, pay attention to export-oriented production, agriculture, e-commerce, and tourism.
- Foster public-private cooperation in order to produce policies and programs to train, develop, boost the capacity of, and promote domestic producers and suppliers in order to foster stable, beneficial partnerships with foreign-invested entities.
Establish and ensure the stable operation of independent organizations tasked with supporting investment, protecting investors’ interests, and also addresses issues concerning foreign trade.