According to a report from the Oxford Business Group Mongolia is taking steps to boost foreign direct investment. In a move aimed at reviving flagging FDI levels Mongolian parliament has approved legislation it hopes will remove uncertainty over investor rights and facilitates the flow of overseas capital into key sectors of the economy Investment officials see the legislation as the most important advance in facilitating foreign direct investment.

FDI inflows fell sharply in 2013, weighed down by investor caution heightened by previous legal changes introduced last year. However, while regulatory reforms under the new legislation should bring greater clarity regarding tax rates on foreign-owned enterprises, slowing global demand for commodities and ongoing investor wariness could lengthen the time it takes for FDI to regain momentum. Chris MacDougall, managing director of Mongolian Investment Banking Group, views the legislation, approved in early October, as the most important advance to be introduced in the past five years. He says that tax stabilization measures and provisions that will help to prevent future changes to the legislation should provide investors with the confidence that they need to return to the market. Analysts have suggested that the legislative changes could pave the way for investment across more of Mongolia’s economy. Lee Cashell, chief executive of Asia Pacific Investment Partners, which is involved in property development and cement production in the Mongolian market, described the law as “very good news”. He commented that it was clear the government realized this was an urgent situation that needed to be taken care of.