How to Set Up an Entity in Mongolia

Setting up a legal entity in Mongolia allows businesses to operate formally, engage in contracts, hire staff, and participate in the economy between Russia and China—a strategic market with rich natural resources. Mongolia’s legal framework for business formation is evolving, and foreign investors are permitted to own 100% of a company, though entities with significant foreign investment may face specific capital thresholds.

While the incorporation process is generally manageable, it can involve multiple registration steps, document translation requirements, and coordination with tax and social authorities. Common challenges include navigating Mongolian-language filings, understanding capital or investment requirements for foreign participation, and maintaining ongoing compliance after registration. However, establishing an entity in Mongolia provides legal recognition, regulatory clarity, and a defined framework for conducting commercial activities under local law.

Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult official sources before acting.

What does “opening an entity” mean in Mongolia?

Opening an entity in Mongolia means legally incorporating a business through the national registry to gain a recognized legal identity, tax status, and the right to conduct commercial activity. This involves choosing a business structure and registering it with the state authority.

Entity overview in Mongolia

Here is a summary of the key features of company formation in Mongolia:

Step-by-step guide: How to open an entity in Mongolia

Step 1: Choose the right structure

The two main choices are a Private Limited Liability Company (LLC)—ideal for most small to medium operations with limited liability and simpler governance—and a Joint Stock Company (JSC)—better for larger ventures that may issue shares publicly or require broad capital raising. Partnerships and representative offices are possible alternatives, but are less typical for foreign investors seeking full operations.

Step 2: Verify business name availability

Reserve a unique business name with the GASR using their online or in-person service. The name must not duplicate existing entities and must conform to local naming conventions. Once approved, the reservation is usually held for a defined period during which you must submit incorporation documents.

Step 3: Prepare incorporation documents

Key required documents generally include:

• Application form for company registration (provided by GASR)
• Company charter/articles of association describing governance and capital
• Resolution of founders/shareholders
• Passport copies of founders and directors, with notarized Mongolian translations
• Lease agreement for the registered office address

Step 4: Register with the General Authority for State Registration

Submit the prepared documents to GASR for incorporation. Upon approval—generally within about 10 business days—GASR issues a Certificate of Registration and a unique registration number. You may also need to obtain a company seal (common in Mongolia).

Step 5: Register for tax and social security

Once registered, apply for a tax identification number and VAT (if applicable) with the Mongolian Tax Administration. Employer registration for social insurance is also required, with monthly payroll tax filings.

Step 6: Open a corporate bank account

Open a local bank account in Mongolia’s currency. Banks may require certified incorporation documents, identity documents of directors and signatories, and the company seal before account activation. Banking timelines vary by institution.

Step 7: Set up payroll and employment compliance

To legally hire employees, register with social insurance authorities, and comply with Mongolian labor regulations, including employment contracts, payroll withholding for income tax, and social security contributions.

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Post-registration obligations

After incorporation, companies in Mongolia must:

• Tax and financial reporting: Submit corporate income tax returns annually and VAT returns as required, and prepare financial statements under applicable accounting standards
• Corporate registers: Maintain accurate records of directors, shareholders, and beneficial owners
• Compliance tracking: Monitor tax deadlines, licensing requirements, and reporting obligations
• Licenses and renewals: Apply for or renew industry-specific permits where necessary
• Recordkeeping: Retain accounting, payroll, and transaction records per local law
• Employment law compliance: Ensure payroll and labor law compliance across reporting and contribution schedules

Taxes and financial considerations

You will be responsible for:

• Corporate income tax: Progressive (1% up to MNT 300 million, 10% up to MNT 6 billion, 25% beyond)
• VAT: Standard rate of 10% on goods and services
• Payroll/social contributions: Employers withhold personal income tax and contribute to social insurance monthly
• Accounting standards: Companies typically follow IFRS or applicable local financial reporting standards

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Expand internationally with Deel

Whether you’re hiring through an EOR or establishing your own local entity, Deel’s all-in-one platform gives you everything you need to expand into the United Kingdom—quickly, compliantly, and with confidence. From market entry to ongoing operations, Deel helps you hire, onboard, and manage teams seamlessly from day one.

With Deel, you can:

• Test new regions using Deel’s local entities through our Employer of Record service—hire employees compliantly, delegate payroll and taxes, and access localized employment contracts.
• Open entities with Deel Entity Setup, where our team manages everything—from incorporation and tax registration to coordination with local experts.
• Centralize your compliance and records with Deel Entity Management, including automated filings, calendar reminders, and visibility across all entities.
• Integrate with Deel Payroll and Deel HR for compliant payments, benefits, and workforce oversight—all in one platform.

For companies transitioning from the EOR model to owned entities, Deel ensures a smooth handover and consistent compliance every step of the way. Enter new markets, onboard talent, and manage your global workforce—all through one unified platform.

FAQs

How long does it take to open an entity in Mongolia?
It typically takes about 2–4 weeks from name reservation to full registration and tax setup. Find out how long setup takes with our Entity Setup Calculator.

What is the minimum capital required?
Locally owned entities generally have no mandatory minimum capital. Foreign-owned entities often require an effective investment of around $100,000 USD per foreign shareholder.

Can foreign companies own 100% of an entity in Mongolia?
Yes, foreign companies can own 100% of a Mongolian entity.

Do I need a local director or representative?
There are no specific residency requirements for directors for most entities.

How much does it cost to register an entity?
Registration fees vary, with lower fees for locally owned entities and higher fees for foreign investment companies. Notary and translation costs should also be considered. Find out the setup cost with our Entity Setup Calculator.

Can I hire employees before the entity is fully registered?
Typically, no. However, Deel’s Employer of Record (EOR) lets you hire and pay talent immediately while your entity setup is in progress.

Can Deel help me open an entity in Mongolia?
Yes. Deel Entity Setup manages the end-to-end process — from registration to payroll compliance—in over 100 countries. Deel’s local experts handle documentation, filings, and legal requirements on your behalf.

Does Deel offer ongoing compliance and payroll support?
Yes. Deel offers both managed services and self-service tools to help you stay compliant.

If you’re using Deel Entity Management, Maintenance, EOR, or Payroll, our team handles payroll, benefits, filings, and compliance obligations on your behalf.

For teams managing their own entities, Deel Compliance Hub makes staying compliant simple by providing real-time regulatory updates, risk alerts, and workforce insights across 150+ countries. Proactively manage compliance with our Compliance Monitor, Workforce Insights, and an AI-powered Worker Classifier, staying ahead of changing employment laws.

Can I switch from Deel EOR to my own entity later?
Yes. Deel supports seamless transitions when you’re ready.