Mongolia Company Incorporation
Your comprehensive guide to establishing a legal presence, procedures, and required documentation.
Establishing a Legal Presence
In Mongolia, foreign investors conduct their activities by acquiring new or existing company shares or establishing their legal presence. The most common types of establishments by foreign investors include a foreign-invested limited liability company (LLC), a representative office, or a permanent establishment.
Comparison of Common Legal Establishments
Choosing the right corporate structure is vital. Below is a detailed comparison of the most common types of legal establishments in Mongolia for foreign investors.
| Category | Foreign-invested limited liability company (LLC) | Representative office | Permanent establishment |
|---|---|---|---|
| Governing law for registration | Legal Entities Registration Law | Legal Entities Registration Law | Corporate Income Tax Law |
| Type of corporation | Domestic | Domestic | Foreign |
| Legal status | Legal entity for profit | Not an independent legal entity | Not an independent legal entity |
| Founders | Shareholders | Foreign entity | Foreign entity |
| Company name | Chooses freely depending on availability | Must be identical to that of a parent company | Must be identical to that of a parent company |
| Scope of business activities | If applicable, a license/permit should be obtained after incorporation | Profit making operation is not allowed | Licenses/permits cannot be granted |
| Terms of state registration | Indefinite | 2 years (subject to extension for every 2 years) | Not certain |
| Share capital requirement | USD 100,000 per investor | Not applicable | Not applicable |
| Legal liability | Liability limited | Liability extends to the head company | Liability extends to the head company |
| Loans | Available subject to banks' requirements | Not available | Not available |
| Financial statements and CIT filing | Mandatory | Not applicable | Mandatory |
| Tax benefits | Available subject to requirements | None | Available subject to requirements |
| Sponsoring visas/work permits | Possible | To the limited extent | Not possible |
| Registration authority | Legal Entities Registration Office (LERO) | LERO | Tax authority |
Incorporation Procedure & Timeline
The incorporation of a limited liability company (LLC) in Mongolia must be registered with the Legal Entity Registration Office (LERO). While the LERO registration itself takes 5-10 business days, considering the preparatory stage and post-registration actions, the entire incorporation usually takes about one month.
A name of the company must be verified with the LERO. Name verification can be processed through E-Mongolia (https://e-mongolia.mn/). In general, a company name cannot sound similar to existing names of other legal entities or otherwise cause confusion.
An LLC is required to open temporary bank accounts for the purposes of transferring the share capital contribution. A temporary account should be opened at a local commercial bank by submitting:
- Document certifying the name confirmation letter from the LERO.
- Incorporation decision (founding documents).
- Passport copy of the foreign investor and other founders.
Note: Documents required may vary by bank.
Investors need to wire-transfer the minimum share capital (USD 100,000 per foreign investor) to the temporary account of the local commercial bank in Mongolia.
The LERO processes the application for incorporation usually within 5 to 10 business days. The incorporation application is traditionally filed in person at the LERO. However, it is expected that the E-Business platform will provide full scope registration services once it becomes fully operational.
The LLC arranges for the production of its corporate seal, indicating its name, location, and registration requisites.
Required Documents
Below is the comprehensive list of documents required for establishing an LLC in Mongolia. Use this interactive checklist to track your progress.
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Apostille Requirements
If the required documents are executed in a foreign country, they must be apostilled. In the case of non-signatory nations to the convention, a legalization of documents at the Mongolian diplomatic mission abroad is strictly required.
Signatory Countries to the Hague Convention (Apostille Treaty)
Albania, Andorra, Antigua, Argentina, Armenia, Australia, Austria, Azerbaijan, Bahamas, Bahrain, Barbados, Belarus, Belgium, Belize, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, Brunei Darussalam, Bulgaria, Burundi.
Cape Verde, Chile, China (Hong Kong/Macao), Colombia, Cook Islands, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark, Dominica, Dominican Republic, Ecuador, El Salvador, Estonia, Fiji, Finland, France, FYR of Macedonia.
Italian Republic, Republic of Latvia, Republic of Lithuania, Principality of Liechtenstein, Kazakhstan, Korea (South), Kosovo, Kyrgyzstan, Latvia, Lesotho, Liberia, Liechtenstein, Lithuania, Luxembourg.
Malawi, Malta, Marshall Islands, Mauritius, Mexico, Monaco, Mongolia, Montenegro, Morocco, Namibia, Netherlands, New Zealand, Nicaragua, Niue, Norway, Oman, Panama, Paraguay, Peru, The Philippines, Poland, Portugal, Republic of Moldova, Romania, Russian Federation.
Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, San Marino, Sao Tome and Principe, Serbia, Seychelles, Singapore, Slovakia, Slovenia, South Africa, Spain, Suriname, Swaziland, Sweden, Switzerland, Tajikistan, Tonga, Trinidad and Tobago, Tunisia, Turkey, Ukraine, United Kingdom, United States of America, Uruguay, Uzbekistan, Vanuatu, Venezuela.
Post-Registration & Corporate Changes
After incorporating a foreign-invested company, it is mandatory to register with the respective tax and social insurance offices. Required documents include:
- An official request
- A copy of the state registration certificate and charter
- A passport copy of an executive director
- A power of attorney (authorizing an authorized representative to apply)
Changes Related to the Registration
Companies in all forms are required to notify and register changes of certain corporate information with the LERO within 15 business days from the date of the relevant decision. Examples include:
- Where share capital amount is changed by transfer of equity shares by an investor or capital reduction.
- Where the company name, business activity, and company address are changed.
- Where the ultimate beneficial owner information is changed.
- Where the shareholder is changed.