Corporate Law at Mongolia
Certainly! Here’s an overview of Corporate Law in Mongolia:
🇲🇳 Corporate Law in Mongolia
Mongolia’s corporate legal framework is primarily governed by the Company Law of Mongolia (2006, amended several times), which regulates company formation, operation, and governance. Mongolia has been working to modernize its business laws to attract foreign investment and improve corporate governance.
📜 Key Legislation
Company Law (2006, amended)
Law on Foreign Investment (1993, amended)
Civil Code
Law on Securities Market
Taxation Laws and related regulations
🏢 Types of Companies
Limited Liability Company (LLC)
Most common company form.
Can have 1 or more shareholders.
Shareholders are liable only to the extent of their capital contribution.
Suitable for small to medium enterprises.
Joint Stock Company (JSC)
Can be open (public) or closed (private).
Requires at least 5 shareholders.
Shares can be publicly traded if a public company.
Subject to more stringent disclosure and governance rules.
Branch or Representative Office
Foreign companies may establish a branch or representative office for business operations.
Representative offices have limited activities (no commercial operations).
📋 Incorporation Process
Name Reservation: Register company name with the General Authority for State Registration.
Preparation of Charter Documents: Charter and founding documents according to the Company Law.
Filing and Registration: Submit documents to the State Registration Office.
Obtain Business License: Certain activities require sector-specific licenses.
Tax Registration: Register with the Tax Authority for tax identification number.
Opening Bank Account: For capital deposit and operations.
🧑⚖️ Corporate Governance
Management: LLCs are managed by one or more managers; JSCs have a Board of Directors.
Shareholders: Hold annual general meetings to approve major decisions.
Directors: Owe fiduciary duties to the company.
Disclosure: JSCs must disclose financial statements and hold more formal meetings.
💼 Foreign Investment
Foreign investors can own 100% of companies, except in restricted sectors.
The Law on Foreign Investment offers protections and incentives such as tax exemptions.
Investments in mining and strategic sectors may require government approval.
💰 Capital Requirements
LLC: No minimum capital requirement by law, but practically capital is needed to start operations.
JSC: Minimum charter capital requirement (amount may vary by type of JSC).
⚖️ Regulatory Authorities
General Authority for State Registration — company registration.
Tax Authority — tax compliance.
Financial Regulatory Commission — securities market regulation.
Ministry of Foreign Affairs and sector ministries — approvals for foreign investments.
📌 Important Considerations
Mongolia has been improving transparency and corporate governance in line with international standards.
Foreign companies must comply with local labor and tax laws.
The legal environment is evolving, so legal advice is important.
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