By Elena Fehrbach
May 7 – One of the most important laws in Mongolia, a Strategic Foreign Investment Law (SFIL) has been approved by the Government. The amendment is effective from 19 April 2013.
Article 4.7 was amended and now stipulates that the Parliament will be an approval authority for transactions where non- Mongolian State- owned enterprises initiate acquisition of more than 49% of the issued shares of a Mongolian entity. The current amendment no longer includes deals initiated by private investors that since now do not require Parliamentary approval and 100 billion MNT (equivalent to approximately 70 million USD) threshold in its entity.
Deals initiated by private investors still require formal approval by the Cabinet or the Ministry of Economic Development, since the acquisitions are within the scope of the SFIL.
The Regulation to the SFIL has been approved on 2 March 2013 and made officially available for review by the business community in Mongolia on the same date as approved SFIL, 19 April 2013. Though the Law undergone a number of positive amendments since it was first introduced on 17 May 2012, some areas of concern still present in the Law and require further work and clarification. But the overall investment attitude in Mongolia has gradually started to recover hoping to get the legal environment settled providing the encouraging investment opportunities.