Ulaanbaatar
Virtual Zone Established to Support Information Technology Production
Politics
Ulaanbaatar, September 17, 2025 /MONTSAME/. During its regular session on September 17, 2025, the Cabinet resolved to establish a virtual zone and approved the “Regulations on the Operation of the Virtual Zone for Supporting Information Technology Production” and the “Regulations on Providing Tax and Non-Tax Incentives to Legal Entities Registered in the Virtual Zone.”
Enterprises registered in the zone will be eligible for the following forms of support. In accordance with the Law on Corporate Income Tax, enterprises operating in the zone will benefit from tax exemptions. Companies that provide financial assistance or support to legal entities as part of their corporate social responsibility will also enjoy tax relief. In addition, nine types of support stipulated under the Law on Supporting Information Technology Production will be extended to technology companies, including:
- Grants for patenting expenses;
- Grants to finance international quality and standards certification costs;
- Compensation for social insurance contributions;
- Grants covering up to 40 percent of the total cost of artificial intelligence projects;
- Awards and incentives for patent holders;
- Support covering up to 70 percent of research and development costs for start-ups;
- Loan guarantees;
- Financing of a portion of the loan interest payments;
- Accelerated depreciation of fixed assets.
The establishment of the virtual zone is expected to localize international best practices and accelerate technological development. It is viewed as a major step toward producing export-oriented products and services based on intellectual property, thereby reducing dependence on the mining sector.
Currently, most information technology companies in Mongolia remain at the start-up stage compared to their counterparts abroad. Due to limited investment opportunities, insufficient government support, and inadequate financing, Mongolian IT start-ups face the risk of joining foreign accelerator programmes, relocating abroad, or conducting production outside Mongolia. In June 2024, the State Great Khural of Mongolia adopted the Law on Supporting Information Technology Production. The “Virtual Zone for Supporting Information Technology Production” serves as the fundamental infrastructure for the implementation of this law.
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