How a Foreign Legal Entity Can Establish a Representative Office in Mongolia

This guide provides a brief overview of how a foreign legal entity can establish a branch or representative office in Mongolia and conduct business legally.

Opening a branch or representative office in another country allows international businesses to expand their market presence. In Mongolia, this activity is regulated by the Law on State Registration of Legal Entities, and the registration process is handled by General Authority for State Registration. [2][5]

A branch of a legal entity is a distinct unit located outside the entity’s main place of business and conducts all or part of the legal entity’s core functions. Under Mongolian law, a branch may register with tax authorities, hire employees, enter into contracts, and generate income. [3]

A representative office, on the other hand, is responsible for protecting the legal interests of the parent organization or carrying out legal transactions on its behalf. It does not conduct business or earn income. Instead, it focuses on building relationships, promoting the company, and conducting market research. [1][3]

It is important to note that a representative office of a foreign legal entity is not a separate legal entity in Mongolia. It operates solely as an extension of the parent organization. As such, any actions or obligations incurred by the representative office are ultimately the responsibility of the parent company. [1][3]

According to the Civil Code and the Law on Company of Mongolia, a legal entity may establish a branch or representative office. However, under the Law on State Registration of Legal Entity, Mongolia does not provide a legal framework for the registration of foreign branches—only for representative offices.

To register a representative office, a foreign legal entity must submit a formal application to the General State Registration Office, along with the following documents:

• A copy of the foreign legal entity’s certificate of incorporation;

• The charter of the foreign legal entity;

• A resolution or meeting minutes authorizing the establishment;

• The internal regulations of the representative office (2 copies);

• Proof of the office address in Mongolia;

• A completed application form (Form UB-04);

• Proof of payment of the state stamp duty. [2][3][4][5]

  
  

If any of these documents are issued abroad, they must be notarized and legalized through an Apostille (if applicable), or certified by the relevant consulate or diplomatic mission.

Once all required documents are submitted, the registration authority will review the application within five working days. If the application meets the legal requirements, the representative office will be registered in the state register. From that point, it will hold legal status in Mongolia and may commence operations. [2][4]

For foreign legal entities looking to invest, explore partnerships, or expand their operations in Mongolia, establishing a representative office is a strategic move. Understanding the legal framework, required documentation, and registration procedures is essential for ensuring a successful and compliant start.

Sources:

[1] Sections 29.2, 29.3, 29.6 Civil Code of Mongolia (2002)

[2] Articles 6, 7, 9 Law on State Registration of Legal Entities (2011)

[3] Article 7 Law on Companies (2011)

[4] Sections 2.1, 2.2, 2.3, 3.1, 4 General Procedures for Establishing Branches and Representative Offices of Legal Entities (2023)

[5] Electronic Information System of the General State Registration Department

Disclaimer: This article is intended for general informational purposes only and have been prepared in accordance with the laws in effect at the time of writing. For legal advice, please consult a professional attorney.