Business entities in Mongolia in 2023
In Mongolia, most of our Clients prefer the limited liability company (LLC). However, if our Clients wish, Healy Consultants will also assist with setting up the joint stock company (JSC) or the representative office. For more details, kindly refer to the information and table below:
Limited liability company
- This Mongolia business setup can be can be registered by 1 shareholder, who may be a non-resident foreign individual or company. The company must also appoint 1 individual as its director. Like the shareholder, this individual may or may not be Mongolian resident or a Mongolian national;
- It is mandatory for a shareholder (holding at least 25% stake in the company) to deposit at least US$100,000 into a Mongolian bank account prior to company setup.
Joint stock company
- A JSC can be setup with at least 2 shareholders, who can be non-resident individuals or entities. Like an LLC, every foreign shareholder, with 25% stake will contribute US$100,000 to the company. A JSC must also appoint a board of directors, comprising of at least 9 members;
- This Mongolia business setup is preferred when our Client plans to issue shares to the public. However, it is possible for a JSC to be operate as private entity and not list on the stock exchange.
Representative office
If our Client does not plan to carry out income generating activities in Mongolia, they may choose to register a representative office for their entity. However, our Client will be required to appoint an authorized agent who will act on behalf of the entity in Mongolia.
| Summary at a Glance | LLC | JSC | Rep Office |
|---|---|---|---|
| How long to set the company up? | 6 weeks | 8 weeks | 6 weeks |
| How long to open company bank account? | 4 weeks | 4 weeks | 4 weeks |
| Minimum share capital required at incorporation | US$100,000 | US$200,000 | N/A |
| Allowed to sign sales contracts with local Clients? | Yes | Yes | No |
| Allowed to invoice Mongolian Clients? | Yes | Yes | No |
| Allowed to invoice Mongolian Clients? | Yes | Yes | No |
| Corporate tax payable in Mongolia | 25% | 25% | N/A |
| Corporate bank account | Khan Bank | Xac Bank | Trade & Development Bank |
| Can rent office in Mongolia? | Yes | Yes | Yes |
| Tenancy agreement required before incorporation? | No | No | No |
| Allowed to import raw materials? | Yes | Yes | No |
| Allowed to export goods? | Yes | Yes | No |
| Can the entity hire expatriate staff in Mongolia? | Yes | Yes | Yes |
| Do you visit Mongolia for company incorporation? | No | No | No |
| Resident director/manager required? | No | No | N/A |
| Resident shareholder required? | No | No | Yes |
| Minimum number of directors | 1 | 9 | N/A |
| Minimum number of shareholders | 1 | 2 | N/A |
| Individual shareholders allowed? | Yes | Yes | N/A |
| Corporate shareholders allowed? | Yes | Yes | N/A |
| Corporate director(s) allowed? | No | No | N/A |
| Public register of shareholders and directors | Yes | Yes | Yes |
| Statutory audit required? | Yes | Yes | Yes |
| Annual tax return to be submitted? | Yes | Yes | Yes |
| Total business setup costs in Year 1 | US$20,750 | US$16,600 | US$14,050 |
| Subsequent annual costs (incl. accounting & tax) | US$6,985 | US$8,460 | US$6,460 |
| Draft invoice | View invoice PDF | View invoice PDF | View invoice PDF |
