Manufacturing Compliance in Mexico: A Guide to IMMEX

Article Takeaways:

• Manufacturing compliance is a complex matter, especially when operating in a foreign country, though enlisting the expert assistance of a shelter can help streamline the process.
• There are basics of what’s necessary to stay compliant, as well as common misconceptions to dispel about manufacturing in Mexico.
• Working with a shelter company reduces the learning curve for manufacturers in Mexico, helping to save time, cost, and stress when moving operations.

Non-compliance can derail timelines and halt projects in an instant. Having an expert resource that can aid in the transition to manufacturing in Mexico is key.

Even if you’ve set up production in Mexico in the past or are familiar with manufacturing in another country, such as China, the specific rules and regulations may be more challenging or ever-changing than originally anticipated.

Here’s a look at what’s necessary for compliance, common misconceptions, and how a shelter can provide clarity and help manufacturers avoid being penalized.

Getting Started with IMMEX

Manufacturers must be well-organized with accurate records when importing supplies and raw materials into Mexico as part of the IMMEX program.

Audits can occur during the setup phase, as well as at impromptu times during production, as authorities are always checking whether imported/exported materials comply.

There are five key factors to have in place:

• Mexican customs broker
• Enrollment in the official register of importers
• Import document known as a pedimento
• Understanding of the Harmonized Tariff Code (HTC) system
• Certificate of Origin

For more detailed information, read 5 Things to Know About Importing Goods to Mexico.

Reasons Why Manufacturers Are Denied IMMEX Approval

The smallest mistake or inaccuracy when filling out the IMMEX application can result in a denial or prolong approval process until it is corrected. The most common reasons for denial are:

• Building isn’t ready and/or hasn’t passed inspections
• Infrastructure that details production and processes isn’t in place
• Customs-related issues regarding goods, materials, and or equipment
• Documentation presented is incomplete and/or inaccurate

Common Misconceptions About Manufacturing in Mexico

Knowing the current state of Mexican trade compliance is necessary as rules that applied years ago may no longer be enforced, and vice-versa. For example:

• Many manufacturers believe the shelter model is limited to a certain time. While this was the case a decade ago, it no longer rings true today.
• There is a false understanding that everything within the shelter model is duty-free. IMMEX program approval and VAT (value-added tax) certification provide manufacturers a 16% VAT savings on temporarily imported goods, materials, and equipment.
• Manufacturing in China is not the same as manufacturing in Mexico. Each country offers unique benefits and challenges, and there are differences in everything from customs to transportation and worker availability to cultural expectations.

Maintaining Compliance Through Mexico Shelter Manufacturing

The IMMEX program has its advantages, but to receive benefits, there are criteria the manufacturer must abide by, including accurately labeling all imports, maintaining specific monitoring software, and creating an administrative infrastructure.

Therefore, most manufacturers choose to work with a shelter company when launching production in Mexico. There are significant time and cost savings that allow manufacturers to get up and running more quickly.

While a manufacturer can apply for the IMMEX program as a standalone entity, there’s a reason why people choose to work with IVEMSA instead.

In addition to the criteria listed above, IVEMSA offers:

• 40+ years of experience, providing manufacturers with all the consulting work necessary for compliance protection.
• Expert knowledge to help manufacturers in areas where they lack experience when transitioning their operations from the U.S. (or another country) to Mexico.
• A template that helps speed up production while also taking a manufacturer’s specific project needs into consideration.
• Assistance with dealing with local authorities regarding ongoing compliance reporting and inspections.

With a complex application process and the need to stay agile and adapt, manufacturing compliance in Mexico can be overwhelming. IVEMSA is here to help.

For questions about the benefits of Mexico shelter manufacturing to determine if it’s the right solution for you, contact our team today.