The Government of Mongolia imposes foreign worker quotas on businesses operating in Mongolia, both foreign-invested and Mongolian-owned companies.  The quota ranges from 5% to 80%, depending on the sector, the amount of investment and the total number of employees a company has.  For all foreign-invested companies the default business activity is “foreign trade,” which carries with it a quota of 5%, meaning a company must employee 20 Mongolian employees for every expat it employees.  Quotas go up from there depending on the sector – for example any company with a mining or exploration license has a quota of 10% while a company that extracts oil or natural gas can employee up to 80% of its workforce as expats.

A Mongolian is considered an “employee” when an employment agreement has been executed between a Mongolian-registered company and the person and the company withholds personal income tax and social health insurance (SHI) contributions.  When a company is applying for a work permit and HG-type visa (the visa type needed to work in Mongolia), in addition to quite a few other documents, a letter issued by the SHI Office is needed.  This letter will show the number of people the company transfers SHI payments on behalf of, which is how the number of a company’s employees is determined.  On the basis of this letter the Labor Office will then decide whether or not to approve the issuance of a work permit.

As long as the company falls within the quota there will not be a problem getting the work permit issued.  Once permission for the work permit has been granted application must then be made at the Immigration office for an entry HG visa.  The consul at the Ministry of Foreign Affairs will then fax the letter to the applicant’s embassy of choice.  After arrival the expat is free to begin working immediately while the long term work permit and visa are being applied for.

As I post this new foreign worker quotas are being considered by Parliament.  There are rumors that the quotas are likely to become more restrictive rather than remain the same or increased.  As opposed to industry-wide quotas, for example a mining company having a flat 10% quota, the list may be broken down into specific jobs within a sector.  Without seeing the actual numbers it is difficult to give too much commentary but hopefully the quotas will not be so restrictive as to affect much-needed foreign investment.  It would seem decreasing the number of foreign workers would be counter-intuitive, especially at this crucial time in Mongolia’s development.  At the moment Mongolia simply does not have a large enough workforce with the experience necessary to run such large projects such as Tavan Tolgoi or Oyu Tolgoi.

I can only hope that Mongolia will take advantage of having foreign workers in country in a more constructive and productive way.  I can understand the government not wanting the country to be overrun with foreign workers, but on the other hand it is an excellent opportunity to exploit the situation.  It could be an easy way to increase the amount of taxes paid and contributions to the Social Insurance fund as expats generally have higher salaries that the average Mongolian.  Additional money could also be raised through fees for employing an expat instead of a Mongolian.  One fee currently charged is a “workplace fee” the Labor Office charges in the amount of MNT216,000 per month per work permit.  The government could also charge a fee if a company wants to bring in a larger number of expats than allowed by law.

I also think Mongolia is missing a golden opportunity to have its workforce trained in the areas that are most crucial to its economy at the moment, free of charge.  Regulations could be imposed that would require a company to train a Mongolian in every position in which an expat currently works.  The expat would simultaneously train Mongolians while effectively working themselves out of a job – thus reducing the future reliance the Mongolian workforce has on foreign knowledge and increasing the number of jobs for Mongolians.

Being from the US, I do not really see an issue with allowing expats in to work.  Granted the situation has changed recently, but America was built on the backs of immigrants who came in, worked hard and helped the US develop in the 19^th and 20^th centuries.   Few countries can completely meet the demands of its labor needs using only its citizens, including the US, the UK or Australia to this day.  Hopefully the government will realize there is nothing wrong with needing outside help and will use this opportunity to the country’s benefit.

Visas – those little bits of paper in our passports that allow us to enter and leave the country.  If you happened to be lucky enough to be born in the US, Europe, Australia or other countries considered the “West” then you can probably travel fairly freely without the worry of getting a visa.  Of course when it comes to employment we all need visas in order to live and work in a foreign country.

While it would seem to make sense that Mongolia would make it relatively easy for people to apply for and be approved for visas, this is not necessarily always the case.  Mongolia, especially during the summer season, actively seeks to increase the number of tourists that visit the country each year.  In a country that has a viable tourist season of only three to four months, one would think applying for a tourist visa would be made as easy as possible.  This, frustratingly for many, is not always the case.  A friend of mine applied for a tourist visa in September at the Mongolian embassy in Vienna to come for a fishing trip.  The embassy required him to present a letter from a Mongolian tourism company confirming he had a hotel reservation.  Luckily I work above a tourism company and this was not much of an issue.  Meanwhile, in London, another person was applying for a tourist visa for the same trip and was not required to provide additional documentation outside of the visa application.  Needless to say, as a company providing visa services this type of discrepancy in policy from one embassy to another makes it extremely difficult to advise clients on visa matters.

I know of several other cases involving work permits and visa issues.  In one case an expat was working as a teacher for a school here in UB.  When the owner of the school began to make teaching there unpleasant he decided to leave, as most people would.  Well, it turns out the owner is the wife of a powerful figure in Mongolia and she was able to single-handedly persuade the Mongolian Immigration Department as well as the Labor Office to deny him a work visa and work permit.  This denial was not based on any actual infraction or breaking of Immigration rules, but was simply imposed on the back of a letter to these agencies.  At a time when Mongolia could use well-trained teachers, of any nationality, she was able to make life very difficult for this teacher because of a grudge.

Another case I am aware of is of an expat worker who was also here teaching.  He had a multi-year visa that was nowhere near expiring and ended up taking another job on that visa but neither he nor the company registered this with Immigration.  When he tried to leave he found out the hard way that somewhere along the way the rules had been broken.  He spoke with the head of Immigration, who ended up fining the company for not properly registering him and telling the expat that there would be no problem for him in the future.

Well, you guessed it.  He subsequently tried to return to work for a company here in Mongolia but was told he had violated not one but two Immigration laws.  He went back and spoke with the same person at Immigration, who feigned not remembering the situation although it had taken place just a few months before, who said there was nothing he could do, even though he is the head of the Immigration Department.

So at a time when Mongolia should probably be actively seeking to increase tourism numbers and the amount of foreign investment, and thus expat workers, it seems to be doing just the opposite by making a visa more difficult to obtain.  While I fully understand and support a country’s right to give visas to anyone it pleases, I also see a need for Mongolia to have exposure to international best practice in any number of sectors of the economy.  A great way to get this exposure is to allow foreign employees to work in Mongolia and pass knowledge and skills on to Mongolian workers.  Mongolia already practices a foreign worker quota system, so there is little fear that foreign employees are going to overrun the country.

This blog has morphed into a different beast than originally intended, but the moral of the story is to always follow the rules.  The Mongolian authorities will definitely seize an opportunity to deny a visa, registration or some other application.  At the end of the day, as tempting and easy as it may be, it is better to follow the letter of the law.  It may take a bit longer, but following the law is going to be your best defense against future problems.

Visas are the bane of travelers everywhere, except possibly diplomats, especially if you are a business traveler. W hen you are traveling you may spend as much time queuing for a visa as actually enjoying your trip.  Visas to visit, live, or work in Mongolia are somewhat readily available but advanced planning is definitely necessary.

The visa and immigration system of Mongolia is covered by the Law of Mongolia on the Legal Status of Foreign Citizens. This law covers everything from diplomatic immunity to the deportation of foreign citizens and everything in between. The English language translation of the law is a short 9 ½ pages, so needless to say the Mongolian Immigration system is quite basic at the moment, which is actually nice in many ways.

When applying for a visa to Mongolia the simplicity of the system will keep you from going crazy trying to figure out the Immigration Office’s rules and regulations. On the other hand when a situation arises that is outside of the scope of the Immigration Law, things get a little bit stickier, although the simplicity does make my job of dispensing visa advice that much easier.

Most visitors will really only have the need for four visa types – a J (tourist), B (business), HG (work) or T (Investor’s) visa.  In the following, text, we will cover these visas as well as some common Mongolian visa issues.

Tourist visa – J

Let’s start with the run-of-the-mill tourist visa. It pretty much does what it says on the tin. If you are coming just to travel then this is all that you will need. A J visa is generally issued for 30 days with the possibility of extending for another 30 days. Unfortunately the Mongolian embassies/consuls like to play by their own rules so there is no overriding procedure for how to apply for a J visa. I know that the London embassy will issue a J visa very easily, with little or no supporting documentation from a tourist agency in Mongolia. On the other hand a friend recently applied for the same visa in Vienna and I had to get him a letter from a Mongolian travel agency stating he had a hotel reservation booked. Go figure.

If you are lucky enough to be a US passport holder then you get 90 days, visa-free, to roam around the country. I presume it is still as easy as it once was for a US citizen to enter Mongolia without a visa. I know when I arrived two years ago I passed through Immigration no questions asked. Of course now I have a visa and long-term residency permit, so it is no longer an issue.

As the name implies, the J visa is for tourism purposes only. A J visa holder is not allowed to engage in any type of work or business activities while in Mongolia.

Business visa – B visa

A B visa is intended for very specific purposes when visiting Mongolia, including attending business meetings, negotiations, exchange programs, conferences, seminars, congresses and workshops on trade and economic questions and auctions, exhibitions, shows and other events commercial in nature.

B visas should be applied for before entering the country at any consul or embassy of Mongolia. The applicant must have a Mongolian company apply on his/her behalf at the Immigration Office here in Mongolia. If Immigration approves the request it will send an approval letter to the Ministry of Foreign Affairs, which will then fax it to the relevant consul. The applicant can apply for the visa at any consul, not just the consul in their home country.

A B visa is good for 30 days with the possibility of extending up to another 30 days. Multiple-entry 6 or 12 month B visas can be applied for once the person has entered Mongolia. These are also good for 30 days per entry with the possibility of extending an additional 30 days perhaps once during the 12 month period. Any further extension attempts and the Mongolian Immigration officials become suspicious that the B visa holder is actually here working.

While a B visa can technically be applied for upon arrival (through the same procedure as above, except Immigration will send its letter to the airport, not fax it to a consul) I do not suggest it. In my experience Immigration Officials are too fickle to risk waiting until the airport to apply for a visa.

US citizens do not need to apply for a B visa if they will be here less than 90 days. Please check the visa requirements for your country.

HG Visa – Required for Work

There are actually three components required for an expat who has an HG visa to work – a work permit from the Labor Office, an HG visa and a long-term residency permit.

Before arrival the expat’s Mongolian company will need to obtain approval from the Labor Office first and the Immigration will then issue an approval letter to be faxed by the Ministry of Foreign Affairs, like the B visa.  The  Mongolian company should allow 3-4 weeks for this stage.  The expat will then apply for the visa at the consul, enter Mongolia and will need to be registered within seven (7) days of arrival in Mongolia, including weekends, with Immigration.

Once they have arrived the work permit will need to be applied for from the Labor Office. Once this has been issued the yearlong HG visa will be applied for from Immigration, at the same time applying for the expat’s long-term residency permit as well.  This stage may take another 2-3 weeks, but the expat can begin working immediately after arrival.

HG visas will be issued for as long as the work permit has been issued, up to a maximum of 12 months, with the possibility to extend each year. A work permit must be obtained for any foreign worker who is coming to Mongolia to work (with the exception of an investor or executive director – more on that below). Expat workers are also liable for Mongolian income tax and social insurance contributions on any income earned while working in Mongolia, subject to double taxation treaties your country may have with Mongolia.

There is also a foreign-worker quota in Mongolia that is issued annually by the Government of Mongolia. While the quotas do vary, generally 5-20% of a company’s workforce can be foreign, with the default quota being 5%.

In conjunction with an HG visa H visas can be issued for dependents of an employee. They can be applied for at the same time as the HG visa. Please note original birth certificates/marriage licenses will be required by the Immigration Office in Mongolia to issue long-term H visas to dependents.

T visa – Investor’s visa

A T visa is a special visa given to either an investor or a foreign executive director of a foreign invested company. A maximum of three may be issued per company, two for individual investors in a company and one for the executive director of the company.

First the investor or ED will need to apply for an Investor’s Card from the Foreign Investment and Foreign Trade Agency (FIFTA) in Mongolia. Once this has been issued a T visa is applied for in the same way as other visas. First permission must be obtained from the Immigration Office and the approval letter will be faxed to the person’s consul of choice. While procedures do vary from consul to consul the employee will most likely be issued a single-entry T visa which will need to be converted to a yearlong T visa upon arrival. At the same time the long-term residency permit will be applied for at Immigration. Like an HG visa holder, a T visa holder will need to register with Immigration within seven days of arrival or face stiff penalty.

T visas are good for a year and can be renewed annually. The advantage to a T visa is that the holder does not need to have a work permit to work (or pay the associated workplace fee) and the T visa holder does not count against a company’s quota of foreign workers.

If the foreign-invested Mongolian company has a corporate shareholder that company is limited to a single T visa for the ED.

Visa issues

Of course the flip side to the Mongolian Immigration system being fairly simple means that there is little room to maneuver within the system for any outliers, such as consultants or non-married partners of expat employees.

In the case of short-term consultants it makes little sense to apply for an HG visa and work permit as the entire process takes several weeks, although to legally work in Mongolia a work permit is necessary. While it is often tempting for companies to try to get away with a consultant on a B visa, that is technically breaking Immigration law in Mongolia. In addition to needing a work permit any expat employee who works in Mongolia is liable for income tax and social insurance contributions on any amount earned in Mongolia, even if the employee only works for a day. The Immigration system is fairly rigid on this, which makes it difficult for consultants or other short-term contractors who may be coming to work in Mongolia.

Another area that is unaddressed is a visa for an expat employee’s unmarried partner. Basically the partner is going to be out of luck without either a job in Mongolia or a marriage license showing s/he is married to the employee. There are options that can be explored, but without a job here themselves the partner is going to have a difficult time securing a visa in order to stay in Mongolia for the long term.

In our experience the Immigration Office can be one of the more difficult agencies to deal with, like bureaucracy everywhere, I suppose. At the end of the day it is necessary to deal with them at some point for most foreign visitors to Mongolia and their bark is usually worse then their bite.