20.10.2011 foreign direct investment framework of mongolia and tuv province, mr ochirkhuyag
TRANSCRIPT
TUV PROVINCE INVESTORS FORUM 2011
FOREIGN DIRECT INVESTMENT FRAMEWORK OF MONGOLIA AND TOV PROVINCE
2011.10.20 Mr . Ochirkhuyag G.
Vice-Chairman
Foreign Investment and Foreign Trade Agency
Government of Mongolia
Content
• Economic prospects and current
development of Foreign Direct Investment
(FDI) in Mongolia
• Mongolian priority economic sectors
• Mining and mineral resources
• Food, agriculture and light industry
• Tourism
• Top priority investment projects
Tuv province’s some prospects
3.7
4.5
6.0 6.0
8.2
0
1
2
3
4
5
6
7
8
9
2006 2007 2008 2009 2010
(National Statistical Office, 2011)
GDP growth in 2010 is
6.1% reaching 8.25 trillion
MNT (6.6B USD) at
current prices.
GDP growth was mainly
due to 23.4% increase in
services and trade, 11.3%
increase in processing
industry and 6.3% in
mining.
Gross Domestic Product /trillion MNT/
Export and Imports /billion USD/
Total trade
turnover increased
by 2.15 billion
USD or
53.5%, total export
increased by
1.013 billion or
53.8% and total
import increased
by 1.14 billion
USD or 53.3%.
2.97
4.00
5.77
4.02
6.17
1.541.94
2.53
1.88
2.89
1.43
2.06
3.24
2.13
3.27
0
1
2
3
4
5
6
7
2006 2007 2008 2009 2010
Total turnover Export Import
(National Statistical Office, 2011)
Foreign Direct Investment 2010
366.50
499.90
708.90801.10
1,025.90
0.00
200.00
400.00
600.00
800.00
1,000.00
1,200.00
2006 2007 2008 2009 2010
(million USD)
( Foreign Investment and Foreign Trade Agency, 2011)
Top 3rd level for Economic Freedom Country /ranked by Transparency International, 2009/
Lowest tax rates country in Asia Pacific region / Corporate tax-10%, 25%/
73rd country of Doing Business 2011 inquiry
7200 items can be exported to the EU markets on GSP+ scheme with zero import tariff
Attractive targets for FDI
SME production equipment and utilities are exempted from the customs tariff and VAT
• Government Resolution No.316 approved on 14th of October of 2009
The Parliament of Mongolia approved the Policy of High Technology Industry and it has enabled the legal base of granting tax exemption, and credit guarantee for business entities those are running business in high technology sector
• June 2010
Tax exemptions and Incentives
Law on Concessions of Mongolia (PPP) approved on 28
January, 2010.
puts state and local properties into economic utilization
vast business opportunities for investors
the list of concession items is approved by the state and local
administrative bodies
decisions shall be made whether to finance from state
fund, to make a guarantee, to organize a tender or to
conclude a direct agreement
Foreign legal entities or their consortiums may submit an
unsolicited proposal to enter into a concession agreement
Law of Mongolia on Concessions
Investor’s Protection in Mongolia
Investors in
Mongolia
WTO member since 1997
Member of Multilateral Investment Guarantee
Agency (MIGA)
General agreement on
trade and economy with 24
countries
Washington Convention on
Investment Dispute
Settlement,
1996
Seoul Convention
on Investment Insurance,
1999
Agreement on Avoidance of
Double Taxation with 34 countries
Agreement on Mutual
Protection and Promotion of Investment
with 44 countries
Foreign Direct Investment – by Sector
65.3%
18.9% 2.7%
13.1%15.8%
Mining & Mineral exploration
Service & Trade
Bank
Others
( Foreign Investment and Foreign Trade Agency, 2011)
Mining and quarring /billion MNT/
www.themegallery.com
193.2
422.8
1104.8987.9
107.5162.0 209.2 209.2
1533.31417.4
1774.91648.4
48.3 40.9 65.6 51.9
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2008 2009 2010 of which: abroad
Mining of coal and lignite, extraction of peat
Extraction of crude petroleum and natural gas
Mining of metal ores
Other mining and quarrying
(National Statistical Office, 2011)
Strategically important largest
deposits of MongoliaNo
Name of Strategically
Important DepositLocation (Province, County) Reserve Amount
1 Tavan Tolgoi Umnugobi, Tsogtsetsii 4.3 bln tons, coal
2 Nariin Suhait Umnugobi, Gurvantes 90.79 mln tons, coal
3 Baganuur , Baganuur 512.8 mln tons, coal
4 Shivee Ovoo Gobisumber, Shiveegobi 564 mln tons, coal
5 Mardai Dornod, Bayandun 1104 tons, uranium
6 Dornod Dornod, Dashbalbar 58933 tons, uranium
7 Gurvanbileg Dornod, Bayandun 16073 tons, uranium
8 Tumurtei Selenge, Huder 229.3 mln tons, iron ore
9 Oyu Tolgoi Umnugobi, Khanbogd 16.39 mln tons, copper; 623.3 tons, gold
10 Tsagaan Suvarga Dornogobi, Mandakh
1.28 mln tons, copper; 43.6 thousand tons
molybdenum
11 Erdenet Orkhon, Erdenet
3.2 mln tons, copper; 90 thousand tons,
molybdenum
12 Burenkhaan Khuvsgul, Alag-Erdene 40.5 mln tons of phosphorit
13 Boroo Selenge, Bayangol 22 tons of gold
14 Tumurtein Ovoo Sukhbaatar, Sukhbaatar 820 thousand tons of zinc
15 Asgat Bayan-Ulgii, Nogoonnuur 2247 tons of silver
Mineral elements that exist in Mongolia
Yellow parts are elements of the Periodic Table of
Mendeleev that exist in Mongolia
69 elements or 62% of the total 111 elements of the
Periodic Table have been discovered and studied in Mongolia
One of the Economic priority sector
of Mongolia
60.4%
40.9%
10%
• of manpower works in this sector
• of GDP
• of export revenue
Shibu lijack
Agriculture sector
Shibu lijack
80%
20%
Animal Husbandry sector products
Light industry & SMEs produce
Food & Agriculture in 2010
2.1 million tons of cereals, potatoes and
vegetables harvested from 541.4 thousand hectare.
100% domestic
needs of meat and potato
50-97% of vegetables
and celeries
Livestock reached 32.7 million
20% of milk and dairy products
23.2 % of total FDI
Mongolian Tourism sector in a glance
Mongolian tourism sector was almost fully private-sector based in the last decade and a business-friendly legal environment has been
effectively sustained in this sector.
420 tour operator
companies
360 tourist camps, of which
74 are high standard camps
340 hotels, of which 63 are
star-rated
• Law of Tourism /2000/
• About 10 regulation and standards of tourism organization, camps, hotels etc.
• Discharge to VAT & tax credit shall be granted for certain percent of investment of construction of high class hotels, tourist complex
• International cooperation in tourism sector is widening these years and 16 intergovernmental agreements have been made
Legal environment of Tourism
In 2010, Government of Mongolia elaborated General
Development Plan for Main Tourism Regions
“Kharakhorum 13th Century” tourist complex
Top priority projects
• Oyutolgoi, Tavantolgoi, Black metallurgical complex, Copper smelting plant, Coking coal plant, Construction materials plant
Mining, Energy & Heavy Industry
Total amount 10.2 billion USD
• Supporting the development of irrigation fields
• High-tech industrial complex & science parks
Agriculture & Light Industry
Total amount650 million USD
• Project to build houses, roads, railways and to construct power station & factory for generation from biomass
Infrastructure sector
Total amount240 million USD
Tourism, Environment & Information technology
sector
• Total amount 1.1 billion USD
Tuv province’s some prospects
Infrastructure development
Road construction
Electricity network development
Tourism development
SME’s development
Agriculture processing
Geological survey and mining
Tourism
Investment opportunities
Energy and Mineral
Resources
Road, Urban development
Trade & service
Light industry Food
Agriculture
ICT and Human
Development
Shibu lijack
THANK YOU FOR YOUR
KIND ATTENTION
Address: FIFTA, Sambuu Str.11, Government Bld.11,
Ulaanbaatar 211238, Mongolia
Email: [email protected]
Website: www.investmongolia.com