NFC was a state-owned company listed on the China stock exchange. Before entering into Mongolia it had businesses in Kazakhstan, Iran and Zambia. Most of the earlier projects were turnkey businesses. The joint venture (JV) agreement was signed in 1998.
NFC in Mongolia Case Solutions
Until 2005, it wasn't due to many delays that it finally began running. In mid-2007, the Mongolian parliament notified the JV that its 5-year 0 per cent and 5-year 50 per cent of income tax period (starting from 2005) had been cancelled. Not only would it need to pay total tax beginning from 2007, it had to pay the tax sum that is exempted from 2005 and 2006. Inside the JV, the union wanted another pay raise despite the fact that salaries had been increased 10 per cent just six months ago. Outside the JV, if a transport contract was not signed by the JV with them on their conditions local shipping companies threatened to obstruct the factory gate.
PUBLICATION DATE: June 15, 2009 PRODUCT #: 909M09-PDF-ENG
This is just an excerpt. This case is about INNOVATION & ENTREPRENEURSHIP
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