Mongolia’s stock market will reduce the sales income tax rate imposed on foreign investors to 10%, offering them a more flexible investment environment. In addition, 2 amendments were made to the law that will be effective starting in 2024.

• Capital gains tax: Previously, income tax for foreign investors was levied on 20% of total income. However, the change will see a shift to a 10% capital gains tax. This modification ensures that investors are only taxed on the profits accrued from the sale of securities, offering a more nuanced and equitable taxation structure.
• Tax cut: The next amendment brings about a phased reduction in the capital tax of securities issued by enterprises located in Mongolia. A 90% reduction is approved for the years 2024-2026, followed by a 50% reduction from 2027-2029 of the 10% of capital gains tax.  

It's essential to note that these changes exclusively apply to securities issued by enterprises located in Mongolia. This includes entities incorporated in compliance with Mongolian laws or foreign business entities with their governing bodies situated in Mongolia. 

With these amendments, foreign investors and enterprises pay a tax of 1% until 2027 and 5% from 2027 to 2029 on the profit from the sale of securities issued by enterprises located in Mongolia. Also, there are no constraints on the holding period for securities, nor are there limits on applicable discounts, differentiating Mongolia from other countries.

In a broader context, It not only fosters a tax-friendly environment for foreign investors but also marks a significant stride in aligning Mongolian enterprises with global financial markets. This means the prospect of dual listings on international stock exchanges, signals a promising era of collaboration and economic growth.