The 16th Trade and Economic Forum of the Chambers of Commerce of Mongolia, China, and Russia is being held on June 8-9.
D. Oyunkhorol, Administrator, a representative of the government, participated in this conference and presented the planning of Khushig Valley Free Economic Zone and New Zuunmod City.
Here is the full introduction
Greetings to all the guests who attended the "The 16th Trade and Economic Forum of the Chambers of Commerce of Mongolia, China, and Russia"
We would like to express our gratitude to our strategic partners and our eternal neighbors, businessmen and investors from Russia and China, and to the staff of the Chambers of Commerce and Industry of Mongolia for successfully organizing this conference.
As of 2020, there are more than 900 Russian-invested enterprises and more than 7,500 Chinese enterprises registered in Mongolia, accounting for about 60% of foreign-invested enterprises and about 20% of foreign direct investment.
Within the framework of the "New Recovery Policy" approved to expand the economic base of Mongolia, to effectively implement the long-term development policy of Mongolia "Vision-2050", and to improve the productivity of the state, 31 thousand hectares of land in Khushig Valley will be "Free Economic Zone, Industrialization, It is planned to build a city for 150,000 people with a transportation and logistics zone.
Within the implementation of the above policy and development:
In 2021, by the resolution of the Government of Mongolia, the "Administration of Khushig Valley Development" was established in 2021 in order to provide a unified organization and management of the legal, infrastructure, and creation of a favorable investment environment for the establishment of a new city and free zone in the Khushig Valley.
In 2022, the Government of Mongolia decided to establish the "National Committee of Khushig Valley Development" in order to intensify development and ensure inter-sector coordination through unified management.
The Khushig valley, where the construction of the new Zuunmod city will take place, is located in the southwest of Bogdhan mountain, the Sergelen sum area of the Tuv Aimag. The new settlement will be directly connected to China and Russia, the world's leading markets, by railways and international highways, as well as direct flights to 100 cities in 23 countries.
Mongolia will provide tax and non-tax support based on legislation and international agreements to create favorable investment conditions for investment in the construction of the city of "New Recovery Point - New Zuunmod City".
In addition to the Mongolian market, when doing business in New Zuunmod City
- Within 1700 км (2 hours flight distance), 304 million people,
- Within 3300 km(4 hours flight distance), 1,7 billion people,
- Within 5000 km(6 hours flight distance), half of the world population – 3,2 billion people.
The Government of Mongolia has funded the first round of infrastructure work with 63 billion MNT and has started construction. This is the main development that the government is carrying out in 2023 with state budget investment.
With the financing of 100 million US dollars provided by ADB, we are working to intensify the construction of the first round of infrastructure.
Also, a research project is being carried out by the Japan International Cooperation Agency (JICA) to create a favorable legal environment for investment within 2 years..
The tax on the income equal to 50 percent of the investment of more than 500.0 thousand US dollars invested in infrastructure development can be reduced by the Law on Investments.
In the first phase of the construction of the new city, the Free Economic Zone is comprehensively planned in combination with recreation, tourism, trade services, cultural entertainment services, health services, and an international financial center.
According to this planning
- 23 thousand jobs will be created.
- 3 million tourists in a year.
- It is estimated that the income of the free zone will be about 10 trillion MNT by 2040.
Investments and business activities in free economic zones are exempted from export tax, import tax, VAT, real estate tax, and workplace fees.
Also, the land tax will be exempt for the first 5 years and 50% for the next 3 years for enterprises that own the land for up to 60 years and engage in trade, tourism, and hotel services.
Taking advantage of its geographical location, it is planned to have an integrated cargo terminal and a transport logistics zone, which is the special significance of New City.
The transport logistics zone will be located on an area of 400 hectares and will centralize the railway terminals of Ulaanbaatar. In terms of capacity, in 2040, it will be planned and developed into a dry port as an integrated warehouse and customs inspection complex that can handle up to 7 million tons of cargo per year.
In the industrial zone food technology factories, construction materials and mixed industries are planned to replace export-oriented imports.
The area is:
- 520,000 m2 factory and warehouse building,
- 5,000 jobs will be created,
- 4 trillion MNT worth of products will be produced annually.
Wholesale trade area:
- on an area of 370,000 m2,
- 34.000 jobs will be created,
- It will serve 1.5 million people a year,
- 4.7 million tons of goods were sold,
- A preliminary estimate for sales of 5.9 trillion MNT has been made.
Tax and non-tax support can be provided in accordance with the laws of Mongolia for doing business and investing in this region.
The transport logistics zone is planned 350 km to the border of Russia and 650 km to the border of China. It is also possible to fly directly to 100 cities in 23 countries.
As part of the Asia-Pacific trade agreement, more than 10,000 goods can be introduced to the market of member countries with up to 100 percent tax relief. Also, within the framework of the Economic Partnership Agreement, more than 7,200 products can be exported to the European Union market and 9,300 products to the Japanese market with tax benefits, which creates a transport and logistics market.
6,000 people will live in the 564 ha area of the public business zone. Multipurpose business offices, workplaces and shopping malls are planned in the area. We aim to create a pleasant living environment and environment-friendly planning that provides the convenience of trade and services and working environment.
In order not to create an unfavorable situation for investors due to tax fluctuations, the tax environment will be stabilized by signing an agreement to stabilize the rate and amount of taxes or an investment agreement.
The Nano Biotechnology Center of New Zuunmod City will be organized as a high technology development cluster. A total of 420,000 square meters of buildings will be built and 6,200 jobs will be created.
Нано, био болон инновацийн технологи агуулсан бүтээгдэхүүний үйлдвэр барих тохиолдолд импортолсон техник, тоног төхөөрөмжийг албан татвар болон нэмэгдсэн өртгийн албан татвараас чөлөөлөх боломжтой.
As part of the comprehensive decentralization plan of Ulaanbaatar, a complex with a campus and a R&D centers are planned in the new city.
We offer you the world's leading market space, diverse business opportunities, favorable investment and tax environment.
Thank you.
