A study of legal issues of Mongolian Investment law : Mining sector as an Example

Abstract

During the rapid development of globalization, the trends in the global investment liberalization have continuously increased. In accordance with economic globalization and investment liberalization with the principles of the investment legal framework and specific regulations have to take an important role in order to improve the legal environment for investment. Mongolia has vast territory with rich mineral resources and this unique feature has become a new competitive field in the global economy.

In the recent years, Mongolia has tightened investment policy, and frequent amendments/major changes to investment law and regulations have increased risks in the mining sector investment as well as doubts brought in. Nowadays, investors emphasize political and legal stability rather than benefiting from its investment.

Since 1992, Mongolia has attracted foreign investment in the country by creating the legal environment, passing "Foreign Investment Law" and the "Mineral Resources Law" respectively. In the past 20 years, foreign investment in Mongolia in terms of sectors, mining sector has attracted the majority of investment. Currently, it plays a significant importance by paying attention to the reform of the legal system of the mining sector.

The scope of this research would focus on legal aspects of the mining sector, main legal documents of investment and legal environment in Mongolia as capital importers’ perspective.

The frame of this study covers Mongolian investment legal environment, the main laws and acts of foreign investment and focuses on aspects of Mongolian mining law.

Chapter 1 covers topic background, theoretical and practical methods. Chapter 2 argues on Mongolian foreign investment policy analysis and introduces specifications of current foreign investment policy and specifically in mining sector, as well as foreign investment situation in general and in mining sector and moreover introduces main laws and acts of mining sector. Chapter 3 analyses aspects of Mongolian mining sector legal system, mainly focusing on Minerals and mining law and testifies legal and other challenges/obstacles/risks of foreign investment in mining sector. Chapter 4 argues on tackling obstacles mentioned in previous chapters and recommend ways to improve the legal environment for foreign investment in Mongolia. Chapter 5 Summary.

It’s beneficial to reducing risks that investors should understand the legal environment where they allocate their investment. This research will help not only to investors to understand legal environment for the investment, but also to help Mongolia policy makers to create a favorable legal environment to attract foreign investment in Mongolia as well as to improve the coordination of Investment and Mining Law.

Keyword: Mongolian Foreign direct investment FDI, Investment Law, Mining Law