Tax Guide for Expats Moving to Mongolia

Moving to Mongolia? Where is Ulaanbaatar?

You would think that moving to Outer Mongolia sounds like a place you’d be banished to, but Mongolia is becoming more popular for expats looking for new challenges.

ulaanbataar-mongolia

Ulaanbataar from above

Where is Mongolia? Mongolia is wedged between China in the South and Russia in the North. You can see a Mongolia map here. The weather in Mongolia is damn cold with Mongolian weather in Ulaanbaatar near freezing most of the year round. Fortunately, they have just built a new ski slope a few years ago, so if you are working here, there are sporting options despite the weather. Cycling in Mongolia is also popular along with horse riding.

Are there any Expats in Ulaanbataar?

There are now an increasing number of foreigners in Mongolia due to the mining industry in Mongolia.

How many expats live in Mongolia? Whilst there are no actual statistics available, it is estimated it will attract over 50,000 foreigners to work in Mongolia in mining and engineering in the next few years.

The IMF has guessed that Mongolia will easily grow its GDP in the double digits for the next few years, so get a flight to Mongolia if you are seeking new investment opportunities.
Ulaanbaatar is the capital of Mongolia. If you are looking for jobs in UB or jobs in Mongolia, the main jobs are in engineering, mining, finance, infrastructure projects, etc.
As a foreigner, will I be able to eat Mongolian food?

Mongolians mainly eat meat and milk. There are also now many expat restaurants and bars in Mongolia, so no worries for expats moving to Mongolia. If you move to Mongolia, you can easily stay in upmarket hotels and apartments and the adventurous can stay in a Mongolian Ger. For parents moving to Mongolia and worried about their children’s education, don’t worry – they have an excellent British school in Mongolia.

What language do they speak in Mongolia?

The population of Mongolia is only around 2.8 million people, but over 5.7 million people speak Mongolian if you include Inner Mongolia as well.

Mongolians speak a number of dialects and languages with multiple ethnicities. Many can speak Russian with mainly the younger generation speaking some English. English is looking to replace Russian as the second language now though. There is also some interest in Korean and Chinese due to Mongolians working abroad.

What is the Mongolian currency?

The Mongolian currency is the Mongolian Tugrik. Around 1,800 Mongolian Tugrik = 1 US Dollar. It is also known as the Mongolian Togrog (MNT).

Here are the Mongolian exchange rates for foreign currency for Aug 26th, 2014.

USD 1,829.01
EUR 2,413.01
JPY 17.60
CHF 1,997.28
SEK 263.70
GBP 3,032.50

If you are moving to Mongolia, you should consider sending some of your cash into a Mongolian bank and keep the bulk of your money in US Dollars.

As you can see from the chart below, the US Dollar has risen rapidly against the

Mongolian Turgik as mining operations have slowed and debts in Mongolia have increased. Simply by holding your money in US Dollars, you would have had a fantastic return.

Foreign Banks in Mongolia

Are there any Banks for Expats in Mongolia?

The most popular Mongolia bank accounts for expats include:
Bank of Mongolia
TDB Bank Mongolia whose full name is the Trade and Development Bank of Mongolia.
Golomt Bank Mongolia

There are no foreign banks as such in Mongolia s yet. It is easy to open a bank account in Mongolia with just your passport and a proof of your tenancy if you are staying for 90 days.
If you run into any problems whilst you are working in Mongolia, you can always seek refuge in the British embassy in Ulaanbaatar.

Advice for British Expats Retiring in Mongolia

British expats moving to Mongolia and thinking of retiring in Mongolia should consider moving their existing UK pensions offshore to USD.

If you transfer your UK pension to Mongolia, you can avoid fifty five per cent tax upon death and all UK income taxes. Furthermore, you can hold your pension in multiple currencies, such as GBP and US Dollars. This should make your pension last longer and you can take advantage of the volatile exchange rates.

You can also hold any investments you like. Normally, you can protect yourself by holding UK stocks and bonds, but you can invest in most mutual funds, bonds or ETF’s via a Qualifying Recognized Overseas Pension Scheme.

Mongolia Income Tax for Expats

Mongolian income taxes are 10% for any income up to 3 billion MNT, with any amount above this taxed at a flat rate of 25%. Mongolian residents are taxed on worldwide income; non-residents only on income sourced in Mongolia.

You are a resident of Mongolia if you have stay in Mongolia for more than 183 days in a tax year or if you own a home in Mongolia.

We can help expats in Mongolia with regards to avoiding taxes and help them set up offshore bank accounts and offshore corporate accounts. Please email us with your questions.