THE LAW ON ECONOMIC FREEDOM HAS BEEN ADOPTED

 

At the plenary session of the State Great Khural of Mongolia held on July 3, 2026, the Law on Economic Freedom and the accompanying draft laws were adopted.

The law is aimed at protecting private property rights, freedom of contract, and returns on investment, while creating a fair competitive environment and strengthening legal stability for doing business.

Significant changes have also been introduced in the financial market. In particular, the withholding tax on interest income from loans and debt instruments raised by financial institutions from domestic and foreign sources has been reduced from 20 percent to 5 percent. This is expected to lower financing costs and help ease the interest burden on borrowers.

The law also includes provisions to support a more stable and long term tax environment for financial instruments such as bonds, shares, and units publicly traded on the primary and secondary domestic securities markets. This marks an important step toward strengthening investor confidence.

A favorable tax environment for the capital market, if maintained over the long term, will expand opportunities for businesses to raise financing not only through bank loans, but also through bonds, shares, and other securities.

This legal reform is highly significant for attracting non budgetary funding sources for the capital city’s development projects and programs, as well as for expanding access to long-term financing based on capital market instruments.

UBIM is working to align the capital city’s development projects and programs with capital market opportunities and long term financing solutions.