Skip IMMEX Permit Delays by Implementing Shelter Services in Mexico
04.17.24Time is of the essence when making the transition to manufacturing in Mexico. It typically takes a standalone entity six to seven months to launch production after they’ve secured a building site.
During this time, the manufacturer is required to secure all permits and certifications, which is a process that can hold up production, namely when it comes to IMMEX approval. To expedite the approval timeline and save on certification and permitting costs, it’s beneficial to work with a Mexico shelter company.
Here’s how shelter services can help U.S. and other foreign manufacturers avoid setup delays and make moving operations to Mexico more seamless.
Increased Wait Time for IMMEX Program Approval
Mexico’s IMMEX program allows foreign manufacturers to temporarily import raw materials, goods, and equipment as part of the production process duty-free, as long as the finished products are exported.
Moreover, the added VAT certification exempts manufacturers from the 16% value-added tax, which results in significant savings. However, without the IMMEX permit, manufacturers cannot receive the VAT certification, and therefore, must pay the full costs of duties and taxes applied.
Due to administrative changes, manufacturers have experienced delays with permit processing in recent months. These delays have extended 30 to 90 days past the previous approval time, which was already several weeks. And, in some cases, the waiting period has extended beyond 10 months.
Secure Permits in Advance with a Shelter Company
Since production cannot begin until compliance is in place, this can serve as a huge setback for foreign manufacturers on tight timelines. Thankfully manufacturers can circumvent these challenges by working with a Mexico shelter company.
A shelter company already has the necessary permits and certifications in place. Since it serves as the legal entity, U.S. and other foreign manufacturers working under this model can take advantage of these benefits from day one. This can keep startup time on track with a timeline closer to three to four months.
However, even if a company decides not to work under a shelter, shelter services can still apply, which includes assistance with permitting and certification to ensure companies have all they need to get applications processed more timely.
Shelter Services Offer a Flexible Solution
The shelter model is a strategic way to do business. Foreign manufacturers that are nearshoring to Mexico can get up and running quicker and with the support of local expertise. It also minimizes the risk and liability of manufacturers establishing their own entity and reduces the cost of operations while still allowing them to maintain complete production control.
Shelter services include all the administrative tasks and responsibilities necessary to launch production. These include HR and payroll, taxes and accounting, and trade compliance, among others. These services are customized to fit a company’s unique needs and designed to eventually allow them to operate with their own IMMEX permit, should they choose.
Although IVEMSA maintains a 15-year average customer retention rate, our goal is to help manufacturers grow and/or graduate from the shelter program as they see fit. If you’re considering nearshoring to Mexico, consider how shelter services may benefit you.