What Does the IMMEX Program Offer American Manufacturers?

Article Overview:

Since cost savings is a priority when expanding production, Mexico shelter manufacturing has played a crucial role. This is partly due to the tax-saving advantages the IMMEX program provides. Working with a shelter company expedites the approval process and helps manufacturers start saving from day one.

Mexico’s IMMEX program, originally known as the maquiladora program, began in the 1960s as a way to boost industrialization in Mexico.

Its purpose was to make it easier and more cost-effective for U.S. and other foreign manufacturers to carry out production. For decades, it’s served as a significant tax-saving advantage, increasing foreign direct investment year over year, and has become a central part of Mexico shelter manufacturing.

IMMEX Program Offering – 16% VAT Exemption

Foreign manufacturers approved under the IMMEX program receive 16% VAT exemption on all temporarily imported goods, materials, and equipment that qualify for production. In addition to IMMEX program approval, they must also secure value-added tax (VAT) certification.

Though foreign manufacturers can apply for certification on their own, the process can take several weeks, if not several months, before approval is granted. This can greatly derail production efforts and cause timeline setbacks that will be more costly in the long run.

How a Mexico Shelter Company Helps Manufacturers Save Faster

Partnering with a Mexico shelter company means manufacturers can benefit from the VAT exemption much sooner.

Since a shelter already maintains IMMEX program approval and VAT certification, it only requires applying for these licenses to be extended to any new buildings being leased (by new manufacturers).

However, it’s not tax savings alone that a shelter company delivers. There are additional cost savings and benefits that manufacturers receive.

Cost Savings in Addition to IMMEX

Shelter services cover all the administrative tasks required to launch production in Mexico. This eliminates the need to hire for individual departments, such as HR, accounting, trade compliance, and payroll.

Additionally, through the site selection process, a Mexico shelter company can provide a cost analysis comparing well-matched facilities based on a manufacturer’s specific production needs and goals. Plus, hiring qualified employees is faster and more cost-effective than in the U.S.

Benefits of Mexico Shelter Services

The majority of manufacturers choose to work with a shelter company when launching production in Mexico. This partnership offers:

• Minimized risk and liability
• Reduced learning curve
• Reduced administrative costs
• Full production control
• Quicker startup time
• Flexible solutions

Finding the Right Manufacturing Solution

IVEMSA supports manufacturers needing full shelter services, as well as standalone entities that may need partial assistance as well.

Either way, the IMMEX program is open to any U.S. and foreign manufacturer whose products qualify, so they can reap the tax-saving benefits.

There’s an optimal manufacturing solution for everyone, and our team will help you decide which business model is right for you. Contact IVEMSA today.