The official launch of Altanbulag free trade zone (FTZ) in Selenge Province is set to take place on June 24. The FTZ aims to improve cross border trade to diversify the Mongolian economy.
Talk of establishing the FTZ in Mongolia has been under discussion for almost over a decade.
Related officials are organizing the Altanbulag Expo at the zone on June 22 to celebrate the launch, which will start its 24/7 operation.
Altanbulag FTZ will be a direct link to Russian markets and preparation work is currently proceeding. In the first stage, construction materials and auto parts will be the focus of trade. Accordingly, a designated trade center will be built at the zone.
Land permits for businesses in Altanbulag have been allowed by the state in order to fully benefit from the border trade zone, reported the director of Altanbulag FTZ Ch.Chimedsuren. Those with permits will be allowed to construct buildings, as well as open trade and service businesses.
State officials are hoping that support for construction materials and car parts trade will improve trade circulation, and reduce and stabilize housing prices, as well as car prices.
The Altanbulag FTZ working group said that the zone will offer favorable taxes in order to attract entrepreneurs and enhance operations of the FTZ. In detail, entrepreneurs will be exempt from customs tax, VAT, and import tax.
Mongolians can purchase construction goods from Altanbulag worth up to three million MNT without paying taxes on items. According to officials, this is expected to reduce the prices of construction materials and goods.
Currently, Altanbulag FTZ covers approximately 500 hectares, but it is planned to expand to a town which would be home to 15,000 to 20,000 people.
A proposal to build a 25 kilometer road from Altanbulag FTZ to Sukhbaatar Railway Station, a thermal power plant, residential areas, hotel complexes and recycling plants is already under discussion.
The FTZ officials said that since the zone is located very close to the Russian border, residents of nearby cities in Russia can freely trade at the market. The officials highlighted that Russian businesses and individuals have much higher purchasing capacity than Mongolians, and will have access to Mongolian trade with the help of Altanbulag FTZ.