The advantages of manufacturing in Mexico are many: lower labor costs, open trade agreements, and access to a skilled workforce. Mexico’s manufacturing industries, especially in aerospace, automotive, electronics, and medical devices, are known not just for the lower costs, but the quality of production as well.
Many companies save 40-50% on labor alone when they move operations to Mexico. They also save money on overhead costs like real estate and utilities, and thanks to Mexico’s IMMEX / Maquiladora program, see significant tax savings. By operating under a shelter, they also save on outside consulting fees and administrative costs.
The shelter program is a huge reason why Mexico manufacturing is so enticing. By operating under a shelter, companies are able to operate in Mexico with virtually no legal risk. The shelter provider is responsible for getting and maintaining all the permits and licenses and ensuring that the company is in compliance with Mexican laws.
Over 110,000 engineers graduate from Mexican universities and technical schools each year. Companies are able to do much more than simple manufacturing or basic assembly—many conduct R&D and design new products and systems in Mexico.
Mexico manufacturing has become known for producing quality goods in highly technical industries. The country also has some of the world’s most active border crossings and international transportation options. Many companies choose to manufacture in border cities like Tijuana, Tecate, Mexicali, Nogales, Ciudad Juarez, Chihuahua, and Monterrey to ensure fast delivery of finished products.
Aside from cost savings, one of the main advantages of manufacturing in Mexico is its proximity to the U.S. It’s easy to fly (or even drive) in to visit facilities. Communication is simpler since the Mexican facility is in the same time zone as corporate headquarters (or at most three hours difference).
Mexico maintains 13 free trade agreements with 50 countries, including the USCMA. These facilitate trade with international markets, helping to reduce or eliminate tariffs on certain products for sectors including automotive, aerospace, and medical device manufacturing, among others.
Global leaders in manufacturing have relied on Mexico for decades to propel production and maintain their continuous growth. As a result, there are established sectors and supply chains throughout Mexico with state-of-the-art industrial facilities equipped with the infrastructure and technology necessary to keep pace with an ever-changing market.
Mexico has the infrastructure to evoke confidence in new companies manufacturing in Mexico, as well as those wanting to expand current production to larger facilities. The automotive, aerospace, and medical device sectors, in particular, have an advantage as there are strong supply chains and industrial hubs in place to provide the necessary support to these sectors.
The shelter program in Mexico is designed to reduce risk and liability for foreign companies. Instead of setting up your own legal entity in Mexico, you can run your manufacturing under one owned by IVEMSA. We’ll handle all the permits and licenses, lease your facility, and take care of administrative responsibilities like HR and accounting. You get to focus solely on manufacturing and will maintain complete control over your processes and production.
There are several unique solutions when manufacturing in Mexico. Each is designed to create a seamless transition for foreign companies setting up production, whether it’s for the first time or when expanding their international portfolio.
Implementing the right type of support makes all the difference in order to maximize manufacturing benefits and optimize costs. Whether it’s implementing the full scope of shelter services or assistance with setting up a standalone entity, there is a solution that’s already been proven to work.
Working with a shelter services company is a unique benefit of manufacturing in Mexico. A shelter company allows manufacturers to set up production more quickly and efficiently by handling all administrative responsibilities. It is the favored route for companies because it limits legal risk and liability while reducing the costs of launching production.
By offering a full scope of administrative services, a shelter company allows manufacturers to fully focus on their production and processes while maintaining complete ownership and control. With a team of experienced professionals in place, manufacturers can delegate responsibilities, including HR, payroll, and trade compliance, and customize services as needed.
The IMMEX program was established in the mid-1960s to incentivize foreign direct investment into Mexico. It sparked global manufacturing and offers benefits that are still in place today. IMMEX program certification and VAT licensing exempt manufacturers from the 16% VAT applied to temporarily imported products, materials, and machinery.
For nearly 40 years, IVEMSA has provided shelter services and support for U.S. and other foreign manufacturers in Mexico. With established networks and flexible solutions in place, companies feel confident in executing their growth strategies, knowing they have the experience and expertise of IVEMSA to guide them.
Get checklists to guide you through the process of setting up a shelter or stand-alone entity in Mexico, covering everything from the initial set-up to finding a site to preparing for trade compliance. Our Quick Guide will give you an idea of the differences between setting up a shelter vs. a stand-alone entity.
GET THE GUIDE >Contact us today and see how we can help you take advantage of all the benefits of manufacturing in Mexico - without the hassle.
