Is a Mexico Shelter Solution Ideal for My Company?

Article Summary: Evaluating which qualifications, questions, and advantages to consider to decide if partnering with a shelter company makes sense for your production goals when nearshoring to Mexico.

When manufacturing in Mexico, U.S. and other foreign companies can choose to either set up as a standalone entity or partner with a shelter company. Though the majority decide on the latter, it’s important to evaluate whether your specific project and goals are a good fit.

In general, companies in an optimal position to partner with a Mexico shelter company include manufacturers that are:

• Ready to expand and maintain ownership over production versus hiring a third-party operator (as with contract manufacturing)
• Wanting to maintain intellectual property protection and quality oversight
• Needing local, expert assistance with administrative responsibilities for a quick and streamlined setup

Other questions to consider are:

1. Can I handle setting up production on my own?

Even if a manufacturing company has been successful in the U.S. for years, expanding production in a foreign country is a whole other challenge.

There are separate rules and regulations, cultural norms, and labor trends, all of which differ from what a U.S. or other manufacturer may typically experience.

For those manufacturing in Mexico for the first time, working with a team of industry experts can save time, money, and stress on everything from site selection to hiring industrial labor to maintaining compliance.

However, if you decide that creating a standalone entity is your preferred route, shelter services in Mexico are still applicable in any capacity needed.

2. Do I want to maintain quality control over my products?

Many manufacturers explore contract manufacturing as a solution. While this may be a convenient route, it may not be the most desirable.

Contract manufacturing is typically best suited for companies that don’t require operational oversight or intellectual property protection. This solution is often reserved for companies with low-mix, high-volume products.

Alternatively, manufacturers in the aerospace, automotive, and medical device sectors, and the like, often require customized parts and specialized components, making a Mexico shelter services solution the more ideal fit.

A shelter company handles all the risk, liability, and administrative responsibilities required for production, though the manufacturer maintains full oversight and ownership over processes, intellectual property, and equipment.

3. What are the advantages of working with a shelter company in Mexico?

• Access to U.S. and Mexico trade and compliance experts to keep current with changing regulations to avoid penalties and setbacks
• Compatible technology and local expertise necessary to operate and scale production
• Lower overhead on administrative functions such as HR, payroll, taxes, and accounting
• Tax advantages through the IMMEX program model
• Quicker setup times compared to operating a standalone entity
• Reduced legal risk and liability in Mexico

Characteristics to Look for in a Shelter Company in Mexico

Long History of Success

IVEMSA has nearly 40 years of experience consulting with U.S. and other foreign manufacturers and delivering a full suite of shelter services.

Strong Reputation

IVEMSA also maintains a 15-year average customer retention rate, speaking to the success of the shelter-client relationship.

Flexible Solutions

Whether a foreign manufacturer in Mexico needs five employees or 5,000, a shelter company that can customize administrative services to scale up or down quickly is advantageous to achieve production goals.

Trust & Transparency

There is a learning curve when manufacturing in Mexico. Seek a shelter company like IVEMSA that acts as a trusted guide to walk you through every part of the process and provide you with all the information you need, including detailed reports, invoices, permits, and more.

We’re Here to Help

Still not sure if a Mexico shelter company is right for you?

Contact IVEMSA today to get the conversation started – we’ll answer your questions and help you evaluate whether or not it’s an optimal solution.