Foreign direct investment (FDI) is an essential component in economic development, in particular for smaller transition economies like Mongolia. For this impact to be realised, the conditions to attract and retain FDI must be created. Despite its isolation and distance from export markets, FDI in Mongolia has been relatively dynamic, aided both by rich natural resources and by the pro-active policies pursued by the Mongolian government. All sectors of the Mongolian economy are open to foreign investors and foreign investment is protected from nationalisation or expropriation. Investment is promoted via a "one-stop shop" which provides a first point of contact and support for foreign investors. The operating environment in Mongolia is evolving to accommodate the requirements of modern businesses. Labour, raw materials and operating costs are competitive and the key legislative acts are in place. Work is progressing to modernise the tax administration. This Investment Guide, published by the OECD’s Centre for Co-operation with Non-Members, provides an overview of the conditions for foreign direct investment in Mongolia. Policy recommendations are made to enhance the attractiveness of the country as an investment venue, including strengthening the legal framework for foreign investment, restructuring the banking system and reinforcing the rule of law.