Intellectual property (IP) protection is a concern for any foreign manufacturer. With laws and trade regulations differing from country to country, it’s important to understand that what may protect you in the U.S. may not hold the same weight elsewhere. In fact, concerns regarding China’s failure to protect and enforce IP rights have been one of the key issues between the U.S and China for years.
Conversely, IP protection for those manufacturing in Mexico has only strengthened over time, particularly with increased commitments addressed in the USMCA. It’s necessary to recognize how crucial IP is to the U.S. economy. Industries that rely on IP support roughly 45 million jobs and 38 percent of the U.S. gross domestic product. As the economy has increasingly moved towards the digital sphere, recognizing and protecting IP has only continued to grow.
In addition to the USMCA and the 11 other free trade agreements Mexico is part of, the country enforces IP protection through a number of agencies, each owning a specific responsibility when it comes to trademark, copyright, and other IP concerns. These government agencies include:
Both the oversight structure and regulations vary from what’s enforceable in the U.S., and it’s up to companies manufacturing in Mexico to understand the differences. Fortunately, a shelter provider shoulders the responsibilities of trade compliance as part of the many services it offers, allowing foreign manufacturers to stay protected when operating under Mexico’s laws.
When the United States, Mexico, and Canada agreed upon a new trade agreement, they updated regulations to meet what’s needed in today’s landscape. The USMCA recently became enforced in July 2020 and highlights several IP rights and enforcement required throughout all three countries.
Chapter 20 of the USMCA covers intellectual property rights and protection at length, highlighting areas such as copyright, trade secrets, and trademarks. It outlines the terms of each provision, specifics of how to ensure effective protection, and how long each protection period lasts. These protocols are in addition to Mexico’s separate IP protection and enforcement.
Understanding intellectual property rights in Mexico can be a complicated matter. However, with the help of an experienced shelter company like IVEMSA, you can begin to understand how different IP laws affect your operation and rest assured that you’re in compliance.
Sources:
https://www.trade.gov/knowledge-product/mexico-trade-agreements
https://www.trade.gov/country-commercial-guides/mexico-protecting-intellectual-property
Among the many advantages of nearshoring to Mexico, particularly when compared to China, is the respect for intellectual property (IP). Trade policy between the U.S. and China has been notoriously shaky over the years, due to the ongoing trade war and the risk associated with IP theft by Chinese companies. According to a 2019 CNBC CFO survey, nearly one-third of North America-based CFOs say they’ve had their IP stolen from Chinese firms at some point over the past decade.
Meanwhile, favorable trade relations between the U.S. and Mexico have been in place since NAFTA and strengthened through the newly enforced United States-Mexico-Canada Agreement (USMCA) in July 2020. The USMCA has the highest standard of any U.S. trade agreement to protect and enforce IP rights. A few of the key highlights as outlined by the Office of the United States Trade Representative (USTR) include:
Under NAFTA, many of these directives were not in place or explicitly detailed. These changes are included with new mandates regarding online piracy and IP protection within a digital environment, which is essential due to rapid innovations in technology in nearly every major manufacturing sector.
Read more: The evolution of Mexico’s intellectual property laws.
IPC president and CEO stated, “The USMCA promises to spur even greater integration among the North American economies and strengthen the region’s stature as a formidable global manufacturing base.”
According to the USTR, the top export categories from Mexico to the U.S. include machinery, electrical machinery, and vehicles. Global management consulting firm McKinsey & Company predicts automotive electronic and software market growth through 2030, increasing from $238 billion to $469 billion, with power electronics reporting an annual growth rate of 15 percent, sensor segments by 8 percent, and electronic control units by 5 percent.
An executive summary published by IBM, detailing a digital transformation in the automotive industry, highlights two key areas where digital IP protection is crucial for the future: connected vehicles and mobility services. The growing number of consumers that expect digital features, such as navigation, security, multimedia, and service diagnostics, to be part of their personal vehicles will lead to product innovation and partnerships between the automotive industry and software, telecommunications, and electronics manufacturers.
Additionally, the trend of mobility services, which provide in-vehicle innovation through smartphone connectivity and integration, which can be moved from vehicle to vehicle, are part of the operational models that guide the new products needed by the automotive industry. Fortunately, the IP protections in place under the USMCA also coincide with the rules of origin laid out in the agreement as well, which requires 75 percent of automotive content to be produced in North America.
The enforcement of the USMCA further incentivizes manufacturers to include Mexico’s nearshore services as part of their strategy. With ongoing research and development necessary to meet evolving consumer expectations, U.S. manufacturers across all sectors will continue to rely on Mexico for the cost-effectiveness and efficiency of its skilled workforce in order to fulfill their production needs during this dynamic era of growth.
As companies decide their best options for expansion, IP protection serves as another factor that pushes Mexico ahead of China in terms of trade relations with the U.S. Although the automotive industry is one of the largest sectors benefiting from the advantages of nearshoring to Mexico, it’s not the only one, since IP protection is essential to all industries, including aerospace, electronics, and medical devices, as technology is developed.
Sources:
https://ustr.gov/sites/default/files/files/Press/fs/USMCA/USMCA_IP.pdf
https://www.ipc.org/news-release/electronics-industry-joins-call-passage-usmca
https://ustr.gov/countries-regions/americas/mexico
https://www.ibm.com/downloads/cas/LVDZDXOA
https://www.trade.gov/knowledge-product/mexico-e-automotive-parts-and-supplies
Beginning in the early-to-mid ‘90s, the Law of Industrial Property and Federal Copyright Law have covered intellectual property (IP) protection in Mexico. Additionally, U.S. manufacturers have held IP protection under NAFTA with regards to trade with Mexico. Companies will soon experience improvements to these protections through the signed and revised U.S.-Mexico-Canada Agreement or USMCA set to be enforced this year.
When first established, provisions of Mexico’s IP laws initially focused on property rights for inventors. These have now evolved to include the protection of patents, trademarks, trade names, trade secrets, slogans, industrial design, origin identification, and trade names with an emphasis on industrial use cases. As of 2018, Mexico issued updates to its current IP laws to offer even greater protection to businesses.
Among these changes included expanded definitions of design registration law and trademark verbiage to be inclusive of non-visual trademarks. These align with the language of the USMCA trade deal that was signed by all three countries in November of last year and revised the month following.
Entities starting the trademark registration process should expect a timeline of approximately six to eight months in order for the application to be reviewed and accepted under compliance with the country’s set regulations. Approved trademarks in Mexico are valid for ten years from the filing date and can be renewed.
IP protection laws have been modernized to include language and laws protecting digital content and trademarks. As technology and international trade relations continue to expand and evolve, the security of these protections become even more important for all industrial businesses.
When enacted, the USMCA will recognize IP enforcement protocol to include digital property to safeguard data transferred across borders. There are also standards set forth with regards to internet service provider (ISP) protections and updates to trademarks and trade secret provisions.
The revised agreement also sets a new standard for protecting the pirating of digital media, including music, books, and movies. Generally speaking, the USMCA recognizes the importance of specific IP enforcement protocols for copyright or trademark infringements as it pertains to modern classifications of provisions previously outlined.
Mexico’s ever-expanding attention to IP protection, especially in accordance with the trade agreement with the U.S. and Canada, has continued to make it a favorable choice over manufacturing in China where such IP protections do not apply. This advantage, in addition to the ongoing trade war between the U.S. and China, has caused manufacturers to consider moving or at least diversifying their operations to focus on Mexico manufacturing solutions in the near future.
With the enactment of modern laws to include digital protection, new procedures are established to ensure companies have their intellectual property safeguarded. Mexico remains steadfast in enforcing IP protection and limiting infringement through several of the country’s organizations. The Office of the General Attorney, the National Institute of Copyright, and the IMPI (Mexican Institute of Industrial Property) are all agencies that pursue disciplinary action against IP violations.
For many businesses, their intellectual property is among their most important assets, and it is critical to protect this property, especially when nearshoring in Mexico or manufacturing in other foreign countries. National laws in Mexico are designed to enforce the protection of intellectual property and other technical or proprietary knowledge.
NAFTA and the new USMCA dictate minimum requirements for intellectual property protection, but the US, Mexico, and Canada have their own laws that exceed these requirements. Mexico’s legal framework, for example, offers express protection for industrial secrets, heavy piracy penalties, and the ability to patent pharmaceuticals.
Here are some basic terms to know about Mexico’s intellectual property laws, as well as the steps businesses can take to protect their intellectual property when manufacturing in Mexico:
A patent can cover any invention, industrial design, or model of an invention and guarantees their exclusive use. Patents in Mexico are authorized by the Patent and Trademark Office and are granted for a set period of time.
The registry is similar to patents but applies directly to utility models or industrial designs.
Mexico’s IP laws don’t strictly define what an invention is, but they do specify things that are not considered inventions, including:
A utility model is an object, tool, device, or utensil that arises from the modification of an existing item. The new object must have more purposes or uses than the original.
An industrial design is any element that is newly created and significantly improves the way of doing any activity. Industrial designs can be drawings or models that are to scale and three-dimensional representations of the new elements.
For businesses looking to obtain patents or register their intellectual property, the process is straightforward. However, it’s important to keep records of all your documentation and be patient.
The IMPI will review all submitted materials and make a determination in about six months.
If you have questions or concerns about protecting your intellectual property in Mexico, working with a shelter provider in Mexico is a great option. Our team can answer all your questions and walk you through the steps needed to register or obtain patents so you can run your manufacturing operations in Mexico with peace of mind. Contact us today to learn more.
Article Overview: There are several do’s and don’ts to consider when manufacturing in Mexico as a U.S. or other foreign company. From production costs and industrial talent accessibility to understanding current regulations and setup timelines, here are a few need-to-know tips that will help streamline the process.
Manufacturing in Mexico is a complex endeavor, with many moving parts, such as site selection, hiring industrial talent, securing permits, and more.
To ease the learning curve for U.S. and other foreign manufacturers seeking to expand production to Mexico for the first time, it’s helpful to review these simple do’s and don’ts.
Always perform comprehensive research before any production takes place. This involves choosing the right location, assessing regional lease availability, and recruiting local labor.
Even in this early stage of exploration, it’s productive to work with a Mexico shelter company, as information specific to your production goals won’t be easily found online.
A shelter company can provide a cost analysis of all manufacturing-related expenses, such as industrial leasing prices and cost-competitive salaries based on your project needs.
Seeing a side-by-side comparison with local insight and research helps make decision-making easier, so manufacturers are well-informed as they move forward with the production setup.
A plant manager cannot handle the entirety of setting up production in Mexico alone. It takes a team of trusted experts, sharing their respective knowledge and experience, to streamline setup and ensure its effectiveness.
To save time, money, and stress, most manufacturers choose to work with the expertise of a shelter company.
It alleviates the risk of compromising sensitive information, slowing down production launch, and trusting unreliable sources and consulting individuals who are unable to handle the setup or scale of projects.
There are several misconceptions about manufacturing in Mexico. For instance, IMMEX is not a duty-free program as many assume.
To qualify for VAT exemption, it requires IMMEX program approval and VAT certification, both of which can take several months to secure. Additionally, in order for materials to qualify for the 16% VAT exemption, the accuracy and organization of the Bill of Materials is essential to meet customs approval.
This can be a timely and costly process when done incorrectly, and calls for the expertise of a team that knows what’s needed and can identify incomplete or inaccurate information more quickly.
Changes to the IMMEX program, tariffs, and other factors involved in Mexico manufacturing occur regularly.
In the past decade alone, there has been a significant uptick in production demand and competitiveness, as well as updates to the free trade agreement between the U.S., Mexico, and Canada that affect origin rules, intellectual property protections, and more.
Even if a manufacturer has operated in Mexico in the past, it’s important to perform due diligence before investing in a project to have a clear understanding of the current compliance rules, regulations, and costs.
For companies already successfully manufacturing elsewhere in the world, it makes sense to replicate these efforts in Mexico rather than relying on contract manufacturing.
On the other hand, when outsourcing production, it’s typically better to engage in contract manufacturing in Mexico versus working with a shelter company or establishing a standalone entity. Consider which setup method is best based on individual project needs and goals.
Compared to years past, the IMMEX approval process entails more regulations than before to check software, components, and data. Additionally, there has been an increase in the number of audits, removing companies from the IMMEX program that aren’t in full compliance.
To reap the financial and operational benefits of the IMMEX program more quickly, partner with a shelter company to make sure you comply. Also, as a shelter company completes documentation for IMMEX approval, other setup activities are simultaneously underway to make progress on a project and tremendously reduce the rejection rate.
Manufacturing in Mexico takes time, experience, and access to local networks. Though there are multiple ways to set up production, the shelter model continues to be the fastest and most cost-competitive option.
A Mexico shelter company has an extended team made up of U.S. and Mexico customs brokers, labor law-related experts, environmental consultants, specialized departments for customs, legal, and tax disputes – essentially, everything that’s needed to handle any administrative tasks.
IVEMSA has over 40 years of experience providing clients with flexible solutions to reach their production goals and prolong their manufacturing success.
If you’re considering making the move to Mexico, start the conversation with one of our team members today.
Key Takeaways:
Medical device manufacturing in Mexico has increased over the past decade, as companies adapt to the emergence of innovative technologies and demand for new medical equipment and devices.
As of 2024, Mexico ranks sixth in medical device exports, equaling US$19.3B, with the U.S. being its top destination.
Currently, there are 250+ companies in Mexico that manufacture medical devices, and foreign direct investment in the sector isn’t slowing down anytime soon.
Mexico’s ability to consistently generate specialized labor, coupled with competitive production costs, has attracted numerous multinational corporations that are seeking scalable medical device manufacturing solutions.
Some of the companies in the industry with an established presence in Mexico include:
Medical device manufacturers must meet Mexico’s official standards (Normas Oficiales Mexicanas or NOMs), which are technical regulations, including label200ing requirements, issued by government agencies and secretariats.
This includes an equivalence procedure, which requires basic essential characteristics of a medical device to be identical to those of the medical device authorized by the Reference Regulatory Authorities (RRA) and the World Health Organization.
It also involves proving product origin under the USMCA to receive preferential tariff treatment, among other regulatory standards. U.S. and other foreign manufacturers are tasked with familiarizing themselves with the law and amended regulations in full to ensure that any products manufactured comply with state and federal law.
Global manufacturers, particularly those headquartered in the U.S., choose Mexico as a place to expand production due to the many advantages it provides, such as:
As other countries, including the U.S., face a shortage in industrial labor availability, Mexico continuously fills the labor pool with technical talent that manufacturers need for production demand.
Additionally, many U.S. companies partner with universities in Mexico and create specific training programs to ensure recruiting and hiring for highly specialized roles, including those required for medical device manufacturing, is possible.
One of the many advantages of medical device manufacturing in Mexico is the clusters set up throughout the country that are equipped with steady supply chains, local labor, and favorable transportation routes. These areas include:
Mexico maintains 13 free trade agreements with 50 countries, including the USMCA. Intellectual property protection under the USMCA strongly enforces trademarks, copyrights, and trade secrets, in addition to digital production, with provisions for industrial design terms and enhanced pharmaceutical patent protections.
Mexico has some of the most active border crossings and transportation options in the world. There are also multiple options to choose from in moving commercial goods in and out of Mexico:
Mexico’s shelter program is considered the safest, most cost-competitive way to operate. It alleviates the administrative setup necessary to launch production and allows companies to stay nimble as needs shift when scaling production up or down.
Most U.S. manufacturers choose this mode of entry when setting up production, as it minimizes risk and liability, creates a quicker startup time, and gives companies full control over processes and intellectual property rights.
As the medical device industry in Mexico grows, U.S. and other foreign manufacturers are looking to the support of a shelter company when setting up production. It remains a go-to strategy for initiating a seamless transition to Mexico manufacturing.
Manufacturers benefit from the services, expertise, and experience that a shelter partner provides while saving costs and setup time. From providing a site selection analysis to helping manufacturers navigate compliance complexities, it’s a partnership that has benefited global companies across various sectors for decades.
Whether you’re in medical device manufacturing or another industry, Mexico continues to be a good place for growth. Learn why shelter services may be the right fit for you. Contact IVEMSA today.
Sources:
https://kpmg.com/us/en/articles/2023/medical-devices-2030.html
https://oec.world/en/profile/bilateral-product/medical-instruments/reporter/mex
https://tijuanaedc.org/medtronic-in-tijuana-success-in-medical-manufacturing/
https://mexico-now.com/becton-dickinson-invests-us80-million-in-juarez/
https://tijuanaedc.org/stryker-in-tijuana-world-class-medical-manufacturing/
https://www.trade.gov/country-commercial-guides/mexico-trade-standards
Key Takeaways:
For decades, U.S. and other foreign companies have benefited from the advantages that Mexico manufacturing provides. However, the setup process is complex and requires local knowledge and expertise to ensure compliance and the most favorable route for a company’s production goals.
Whether it’s a first-time expansion or a return after many years away, here’s a look at the different modes of entry, factors to consider when making a decision, and tips to help make your project a success.
The option of contract manufacturing involves initiating a third-party manufacturer to take charge of all production and processes.
When outsourcing, the contractor typically takes on the legal risk and compliance obligations. Manufacturers give up control over production quality, which isn’t recommended for companies that have highly technical components and processes.
Setting up a new entity in Mexico provides manufacturers with full ownership and control of their organization and production. For this mode of entry, the entity maintains the risk of operating in a foreign country and is responsible for meeting all compliance regulations.
It is also often more time-consuming than contract manufacturing due to the several steps it takes to launch production, including site selection, hiring labor, and establishing IMMEX program approval, VAT certification, and other various administrative departments needed to operate.
Though less popular than other modes of entry, some foreign manufacturers decide it’s best to work with a company in Mexico to combine resources, costs, and management.
This option can take time to find the right partner that has the same goals and process, though the advantage is the expertise and experience in place that may help launch production faster.
The majority of U.S. and other foreign manufacturers choose to partner with a shelter company when manufacturing in Mexico. This mode of entry streamlines the setup process while saving time and costs.
The Mexico shelter company handles all administrative responsibilities needed to launch production, including site selection, recruiting and hiring labor, HR, taxes, and customs compliance.
Therefore, manufacturers can focus solely on production while maintaining complete control and ownership. It also eases the burden of exposure to legal authorities, minimizes risk, and reduces the learning curve.
There are benefits to each business model, but here are factors to consider as you decide what best fits your company’s needs.
1. Costs – The investment is always the first factor considered. In addition to setup costs, consider ongoing operating expenses as well as what it would take to scale. Unlike other modes of entry, manufacturers operating under a shelter save on infrastructure, compliance software, administrative departments, and key suppliers for their operation, such as transportation, customs brokers, building improvements, etc.
2. Legal Liability – The shelter model is also the safest way to do business when manufacturing in Mexico, plus companies do not lose control over the processes or relinquish ownership over equipment, materials, or intellectual property. There’s more legal exposure when operating as a standalone entity or outsourcing production.
3. Timeline – Setting up a standalone entity without the help of a shelter partner takes eight to nine months, or longer, to get up and running. For companies wanting a quicker start time, working with the resources and experience of a shelter company cuts the time in half. Alternatively, a joint venture or contract manufacturing can take time to find the right fit.
1. Assess Specific Needs – Each manufacturer has its own specific goals. For example, a small business with fewer than 50 employees may find it more feasible to outsource production rather than working with a shelter company.
2. Determine Costs – A shelter company solution continues to be the most cost-effective solution for medium-sized operations; it depends on how many employees are necessary and the type of production being performed.
3. Perform Due Diligence – Not all contractor manufacturers or shelter companies are the same. It’s important to research and ask questions about the process for any mode of entry considered. IVEMSA provides cost transparency and regular check-ins throughout every step of the process.
4. Look for Proven Solutions – Regardless of whether it’s a joint venture, a contract manufacturing solution, or a shelter model, seek out experienced partners that understand the industry and show a history of success.
For standalone entities and companies operating under the shelter model, setting up production in Mexico involves:
Though contract manufacturing doesn’t require the same setup process, it doesn’t provide companies with consistent production or quality assurance. However, the trade-off may be a good solution that requires predictable runs of specific products rather than specialization and easier scalability.
The majority of manufacturers choose IVEMSA as a shelter services solution to streamline production setup and save costs. Shelter services can also be tailored to those who choose to set up a standalone entity as well.
When manufacturing in Mexico, consider the benefits of each mode of entry and which type best fits your needs. IVEMSA offers flexible solutions to help you scale up or down as needed.
Additionally, there are no surprise fees for site selection assistance or supporting you through the setup process of your operation, as is often found with other companies. Plus, U.S. and other foreign manufacturers benefit from the reputation IVEMSA maintains and the established connections and networks that it uses to identify building availability, recruit employees, source suppliers, and more.
Talk to our team about your production goals, and we can help guide you in the right direction.
Key Takeaways:
2025 left U.S. manufacturers constantly reprioritizing and restrategizing production goals. Tariff uncertainty was the main cause for pause as many waited to see how the year would unfold, and at what cost manufacturing in Mexico (and other areas around the globe) would be.
Heading into 2026, changes are still expected, though there are trends showing why moving forward with expanding manufacturing to Mexico is strategically advantageous.
Here are the top Mexico manufacturing trends leaders face in 2026 and how they may impact behavior.
Last year, the vacancy average for industrial buildings in Mexico was approximately 4-5%. However, manufacturers remained in a holding pattern without many decisions being made about whether or not to expand production.
Therefore, entering 2026, there is a greater market for industrial leases with an increase in viable building options in and around Tijuana, Mexicali, and Monterrey, which have double or triple the offerings than usual.
U.S. manufacturers have historically relied on comparatively lower Mexico labor rates and the availability of qualified workers to meet production demands.
Because there was a pause in new production in 2025 as manufacturers waited to see how tariffs and other economic shifts would pan out, employee availability in Mexico increased and will benefit manufacturers moving forward with production investments and opportunities in 2026.
It’ll be easier to recruit skilled talent and resources to support manufacturing efforts, which counteracts the continuous strain on recruiting qualified labor for industrial roles in the U.S.
The digital transformation continues to gain traction and propel certain sectors forward with ongoing demand. For example, the increase in electric vehicle production, as well as semiconductors and robotics, fuels growth in the automotive, aerospace, medical device, and electronics sectors.
Additionally, industries with more visibility typically feel more comfortable moving forward with investments, even during times of uncertainty, and look to the solid infrastructure manufacturing in Mexico provides to save costs, meet tight deadlines, and uphold production quality necessary to stay competitive.
One of the long-standing advantages of Mexico manufacturing is the bi-national link between education and training institutes.
These are well-developed relationships that have been in place for decades, with manufacturing companies providing the building and infrastructure, certain materials and equipment, and training programs designed to teach workers in Mexico technical skills.
The tariff trend from last year is expected to remain the same, with unexpected shifts always a possibility, but also benefits for U.S. manufacturers with materials and components that are USMCA-compliant.
Because of the tariff shakeup in 2025, manufacturers will be even more diligent about researching their goods and ensuring they meet the requirements when presenting their Bill of Materials.
Most will still favor the support of a Mexico shelter company that assists with this technical and complex trade compliance process to help avoid additional costs, fines, and/or production delays.
For the past few years, manufacturers have evaluated their supply chain stability and have diversified their production as a result, with many deciding to reshore operations closer to home.
For years, there’s been a heavy reliance by the U.S. on China for outsourcing production for cost-saving purposes. However, the constant tariff battle between countries and the supply chain unreliability during and immediately following the 2020 pandemic have caused U.S. manufacturers to look at localizing their production by manufacturing in Mexico.
Sustainability takes center stage both from an environmental perspective and an operational one. Manufacturing companies seek opportunities to implement eco-friendly practices that benefit their production and meet green requirements.
Additionally, an expansion strategy that focuses on cost-effective scalability gives manufacturers confidence to grow and make new investments. While the two interpretations of sustainability are different, they complement each other when planning for Mexico manufacturing in the future.
The demand for semiconductors and other high-technology manufactured goods is set for exponential growth, and manufacturers must answer the call in a cost-friendly and efficient way. Thus, despite uncertainties and setbacks in 2025, Mexico manufacturing investments will be on the rise.
There are specific benefits Mexico manufacturing offers U.S. companies that other regions can’t compete with, such as geographical proximity and preferential USMCA accessibility. Furthermore, Mexico’s ability to keep pace with innovation and operational efficiency as part of its infrastructure has illustrated its capabilities of supporting a sophisticated global supply chain.
Manufacturing trends come and go, but business leaders can always rely on the support of shelter services in Mexico to help them fulfill their production goals.
The infrastructure a shelter company provides has already proven to be a successful business strategy for manufacturers setting up production in Mexico for the first time. Implementing shelter services:
Having a local, reliable industry resource when manufacturing in Mexico is a marker of success, and manufacturers who implement shelter services save significant time, money, and stress.
For companies considering making the move to Mexico for the first time or re-entering the space after several years, contact IVEMSA to discuss whether a shelter services solution is right for you.
Sources:
Summary Overview: Tariffs continue to challenge the manufacturing industry, though Mexico provides several advantages that may help lessen the impact on business. With U.S. and other foreign companies already seeking alternatives to manufacturing in China, eyes are on Mexico to provide some much-needed solutions.
Tariffs continue to be top of mind, with a flurry of changes causing waves of uncertainty for global companies manufacturing in Mexico. Industry leaders are no strangers to unexpected shifts, yet seek clarity on whether their production efforts will be impacted long-term.
Ongoing negotiations are in effect, but here is what to know about current tariff policies, which goods are exempt, and how a Mexico shelter company can help you navigate potential disruptions to your business.
Tariffs and counter-tariffs have affected multiple countries that trade with the U.S. For Mexico, in particular, the U.S. has enacted tariffs on certain Mexican imports, primarily focused on automotive components and electronics.
Initially, the Trump administration imposed 25% tariffs on steel and aluminum imports from all countries and then doubled these duties to 50%. Mexico is not exempt from these tariffs, although goods compliant with the USMCA are.
Qualifying goods under USMCA provisions lessens the impact, though it requires accurate management and detailed product descriptions to compare to the rules of origin.
The origin of raw materials and the amount of processing affect whether or not they will qualify for exemption from tariffs. Materials must have undergone a substantial transformation from the raw materials before being exported.
Having the expertise of a Mexico shelter company that works closely with U.S. customs brokers plays a vital role in reviewing a manufacturer’s Bill of Materials (BOM) and Harmonized Tariff Schedule (HTS) codes to confirm which goods qualify.
Tariff shifts lead to other costly impacts, including disruption to supply chains and an increase in expenses for certain components. Ultimately, this affects profit margins and investment decisions.
However, companies manufacturing in Mexico have certain benefits those manufacturing in other parts of the world, such as China, do not.
Geographical Proximity: The proximity between the U.S. and Mexico reduces transportation costs and timeline delays typically experienced in trade with China.
Cost-Effective, Industrially Skilled Labor: Mexico continues to invest in its industrial workforce through education and training programs to meet diverse, technical demands. Furthermore, the cost-effectiveness and availability of qualified labor compared to the U.S. have driven continuous opportunities for expansion.
Established Infrastructure: Mexico manufacturing solutions include industrial clusters well-equipped with access to multiple transportation networks and supply chains to fulfill growing production needs.
Favorable Trade Agreement: In addition to tariff exemptions allowed through the USMCA, there are additional incentives and intellectual property protections for original content for U.S. manufacturers.
Shelter Company Expertise: Partnering with a Mexico shelter company provides a unique advantage for U.S. and other foreign manufacturers. It’s the safest way to do business and reduces the learning curve of operating in a foreign country. Despite tariff uncertainty, implementing shelter services helps make the transition to manufacturing in Mexico more seamless.
No country is immune to the effects of tariffs. However, manufacturing in Mexico has thrived for decades and maintains a solid infrastructure that companies can rely on as an alternative to China when they want to diversify or expand their production.
Mexico manufacturing solutions ease tariff uncertainty for U.S. manufacturers due to specific tariff exemptions, geographical and cost-saving advantages, and the industry support of a shelter company.
Additionally, there is setup support available through shelter services to streamline efforts and save on production costs.
Contact IVEMSA to learn how this solution can benefit you.
Source:
Key Takeaways:
The semiconductor industry has always been a sub-sector under electronics manufacturing, but has started to emerge as a force all its own. 
Though still in its early stages of development, manufacturing in Mexico is keeping pace with the growth of this evolution and serves as an ideal fit for those looking to fulfill the more labor-intensive part of the process, including tests, packaging, and assembly.
Manufacturing in Mexico has been an integral part of the continuous growth of the aerospace, automotive, and electronics industries, among other sectors.
With advantages like steady supply chains, cost-effective, highly skilled labor, and close proximity to a U.S. audience, global manufacturers have relied on industrial hubs in states throughout Mexico for decades.
Semiconductor manufacturing in Mexico can build upon this proven history of success and offer industrial support in assembly, testing, and packaging (ATP), supply chain operations, and intellectual property (IP) protection.
Assembly, Testing, and Packaging (ATP):
Skyworks Solutions, Texas Instruments, Infineon, and Qualcomm are all major international players with a strong presence already benefiting from the advantages of semiconductor manufacturing in Mexico.
As this growth continues, other semiconductor companies can rely on existing capabilities in these processes to accommodate these specialized needs.
Supply Chain Operations
Mexico is primed to increase its involvement in the semiconductor supply chain through its strategic access to materials necessary for production that typically come from Europe and Asia.
The industry also has the appropriate infrastructure in place and meets logistical demands, particularly favorable for companies headquartered and/or with a target audience in the U.S.
IP Protection
Due to continuous IP protection challenges with China regarding sensitive technology, including semiconductors, manufacturers are looking for an alternative.
Manufacturing in Mexico provides a bi-national solution where certain roles, like research and development, can remain in the U.S. while the more technically focused processes can be completed in Mexico on a larger scale and lower cost.
Border regions part of semiconductor manufacturing in Mexico include San Diego/Tijuana and Mexicali/Phoenix. Additionally, Jalisco, Chihuahua, Querétaro, and Aguascalientes have already emerged as key leaders in semiconductor manufacturing and are expanding participation in ATP and supply chain needs.
Other advantages of a two-country initiative between the U.S. and Mexico that’s proven effective with traditional manufacturing include:
CHIPS ITSI
This initiative enhances ATP capabilities in key partner countries beginning with Mexico, Panama, and Costa Rica.
The collaborative effort is a commitment to sustainable economic development to strengthen regional capabilities for growth and technological advancement in the semiconductor sector.
Geographic Proximity
The proximity between the U.S. and Mexico also provides a significant geographic advantage, resulting in less costly transportation and logistical convenience.
This has been one of the major benefits other sectors have considered when moving manufacturing from China to Mexico and/or expanding their presence beyond the U.S.
Skilled Workforce
The availability of a well-trained workforce has been an incentive for manufacturing in Mexico.
With the decline of qualified industrial workers in the U.S., expanding efforts to Mexico has been a cost-saving way to meet growing demand.
All eyes are on the semiconductor industry as it continues to emerge as a larger sector, and partnering with a Mexico shelter company like IVEMSA is beneficial if you are entering expansion for the first time.
A shelter company provides the infrastructure, industry experience, and local expertise to support companies across major sectors in launching production in as little as three to four months.
It’s part of a strategy that U.S. and other foreign manufacturers have benefited from for decades. It’s a way to minimize risk and liability, lower production costs, and reduce the learning curve when operating in a foreign country.
Learn how shelter services can be customized to benefit your specific goals. Contact IVEMSA today to get the conversation started.
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Key Takeaways:
In 2025, Mexico reached a record high of USD $21.4 billion in foreign direct investment in the first quarter. This reflects an upward trend over the past four years, which can be attributed to several factors.
Pandemic recovery, trade conflicts with China, and U.S. incentives through the USMCA and other programs have caused many manufacturers to revisit nearshoring to Mexico as a strategy.
And although nearshoring itself may not be an entirely new concept, partnering with a Mexico shelter company may be.
The shelter model is unique to Mexico, allowing U.S. and other foreign manufacturers to limit their risk and liability when launching production while reaping all the benefits.
Though contract manufacturing and setting up production as a standalone entity are available alternatives, most foreign companies choose Mexico shelter manufacturing as their preferred strategy.
In addition to the lowered risk of manufacturing in a foreign country, other main benefits of shelter services include:
Shelter services cover everything manufacturers need for production in Mexico including:
By partnering with Mexico shelter companies, manufacturers maintain full control over their equipment, processes, and intellectual property.
Whereas, those implementing contract manufacturing relinquish oversight and quality control over their production. It’s up to each company to decide what its manufacturing goals require.
Manufacturers new to nearshoring to Mexico may not know exactly where to start. The advantage of working with a shelter company is there’s already local experience and expertise in place to guide the process.
From site selection to hiring qualified industrial workers, a Mexico shelter company handles all administrative responsibilities necessary to launch production. This leaves manufacturers to focus on what they do best.
If you’re considering nearshoring to Mexico, let’s discuss whether shelter services make sense for your business. Our team is here to help you make a seamless transition.
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https://mexiconewsdaily.com/business/foreign-investment-mexico-2025/
Key Takeaways:
Manufacturing in Mexico has been part of an integrated strategy for U.S. and other foreign manufacturers for decades. Its logistically convenient cost-effectiveness has led to USD $36.87 billion in foreign direct investment in 2024, with over half going to the manufacturing sector.
A significant part of what’s factored into this continuous growth is a partnership with a Mexico shelter company. This is particularly true for smaller and medium-sized companies setting up production in Mexico for the first time. They benefit the most from having the local expertise and experience that a shelter company provides.
However, regardless of whether a manufacturer is large or small, shelter services may still be applicable. Key benefits include:
Operating in a foreign country comes with expected challenges. Understanding location-specific rules and regulations and labor laws, as well as navigating cultural differences, can create a steep learning curve.
Mexico shelter companies provide flexible solutions and create a seamless transition for foreign manufacturers setting up production. Their knowledge and insight help manufacturers avoid penalties and find the best facilities, suppliers, and workers to support their production goals.
Mexico shelter manufacturing requires several moving parts, which all must simultaneously be completed in order for production to begin. This includes hiring administrative personnel, applying for permits and certifications, finding a facility, and recruiting qualified industrial labor.
Any of these responsibilities on their own takes several months to complete. However, shelter services cover all of these administrative tasks to get production up and running in three to four months, versus the seven to eight months it typically takes as a standalone entity.
Depending on the nature of production, some manufacturing companies choose contract manufacturing versus working with a Mexico shelter company. The advantage of the shelter solution is manufacturers retain complete control over all their personnel, processes, and intellectual property rights.
Additionally, the shelter model is designed to prepare manufacturers to eventually “graduate” from the program and operate as their own standalone entity if they choose. They receive what they need to get started, and always have the option to stop production or scale as the situation calls for.
In addition to these key benefits, a shelter company also helps manufacturers save on labor, infrastructure, permits, and license fees needed to launch production.
IVEMSA has partnered with manufacturers for the past 40 years, helping them to launch production in Mexico and continue to grow their business.
For information on how to get started with a Mexico shelter company and see if it’s the right fit for your project goals, contact IVEMSA today.
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