IMMEX has become synonymous with Mexican manufacturing. The question is: How exactly does it benefit companies looking to manufacture in Mexico? We break down all of the IMMEX basics you need to know.

How It Started

Formerly known as the maquiladora program, IMMEX was initially established in the 1960s as a way of encouraging investment from foreign companies, strengthening the border economy, and alleviating unemployment issues.

With the approval of the North American Free Trade Agreement in 1994, the program started booming, and in 2006, the Mexican government simplified compliance requirements and gave the program its current name, IMMEX.

How It Works

What Is It?

The program was established to boost the Mexican economy, but what is it, exactly? Simply put, the IMMEX program is a regulatory framework for the export-focused manufacturing industry in Mexico. Under the program, foreign companies can defer taxes on raw materials and components imported into Mexico, as long as the materials are exported as a finished product within a set timeframe.

Who can participate in the program?

To be eligible for the program, companies must meet a specific profile. First, they must be a legal entity residing in Mexico or export service providers. Other requirements include:

• An export value totaling US $500,000 in a one-year period or 10% of the company sales in Mexico
• The export of only approved goods
• The use of goods only for their approved purpose

Click to read a complete list of IMMEX requirements.

How to register for IMMEX

If you’re looking to take advantage of the benefits of manufacturing in Mexico under the IMMEX program, one of the first steps you’ll need to take is deciding on a registration strategy. Mexico offers the following options to foreign manufacturers:

Holding Company IMMEX: A legal Mexican entity, which includes a manufacturing operation and one or more subsidiaries, is registered under IMMEX.

Industrial IMMEX: IMMEX registration is granted to a company that uses imported materials to carry out an industrial process or produce goods for export.

Services IMMEX: Registration is given to companies that offer services that support the production of goods for export.

Shelter IMMEX: An already-registered Mexican company assumes the risk and liability for the foreign manufacturers operating beneath it. Manufacturers can focus on production processes while the Mexican entity takes care of administrative duties.

Third-Party IMMEX: If a registered company doesn’t have the facilities to carry out manufacturing processes, they operate through registered third parties.

How It Benefits Your Business

While any IMMEX approach will give manufacturers an edge over companies located elsewhere around the globe, operating under a shelter company allows you to take full advantage of everything Mexico has to offer manufacturers.

LOWER COSTS

Perhaps the biggest, most well-known advantage of the IMMEX program is the cost savings. Nearshoring to Mexico alone can help manufacturers cut down on transport and labor costs, but with the added import tax and VAT exemptions, foreign companies in Mexico can significantly lower their spending.

LOWER RISK

Companies that choose the shelter route have the added advantage of being able to hand off any legal risk and liability. Rather than trying to operate as a standalone entity, which involves keeping up with complex foreign laws, companies can focus on their production while the shelter company worries about compliance.

FASTER START UP TIMES

Under most IMMEX approaches, receiving your permit can take anywhere from three to six months, sometimes even longer, which is why more and more manufacturers are opting for the shelter model. Because the shelter company is already a legal Mexican entity, you can get your production up and running in a matter of weeks rather than months.

LOCAL EXPERTISE

Moving your company’s operations to Mexico means gaining access to low-cost labor, the world’s largest number of free trade agreements, and existing industry clusters—but you’re still operating in unfamiliar territory. When you work under a shelter company, you get an experienced partner who has the linguistic, cultural, and legal knowledge you need to circumvent the obstacles of manufacturing in a foreign country and ensure a smooth-running operation.

Ready to Get Started?

If you’re ready for a fast, cost-effective way to set up business in Mexico, it’s time to take advantage of NAPS’ shelter services. Under a NAPS shelter company, you get a local expert who’s totally dedicated to your administrative and compliance needs, so you can focus on running and growing your business. What’s more, you maintain full control of all manufacturing processes and company culture.

Contact NAPS to learn more about the benefits of becoming an IMMEX certified company.