If you’re a business based in the United States considering nearshoring some manufacturing operations to Mexican territory, you will not only want to understand the Mexican business culture itself but how Mexico’s Value Added Tax (VAT) may impact your operations. What is the VAT Tax? Locally referred to as the impuesto al valor agregado tax (IVA tax), the VAT is traditionally applied to all goods imported to Mexico, with some [...]

Mexican business culture is distinct from business culture in the United States, which has the potential to present challenges during negotiations. Though there is probably more common ground between business cultures than you realize, it is important to understand the differences as well. Whether you are operating under a Mexico shelter company, or looking to do business in Mexico, it’s important for US companies in Mexico to recognize and understand [...]

If you’re considering nearshoring to Mexico, you’ll want to do so with a firm understanding of how intellectual property rights are registered, protected, and enforced. The protection of intellectual property (IP) is critical in the modern world, and carries with it particular importance for companies based in the United States but who are manufacturing in Mexico. The most basic fact to understand is that intellectual property rights are handled a [...]

Content was updated for accuracy and relevancy on March 29, 2021. Many companies are recognizing the substantial benefits associated with nearshoring their operations. Seen as an increasingly promising alternative to offshoring, some of the benefits of nearshoring in a nearby country like Mexico include a shorter supply chain, duty-free imports, and robust intellectual property rights (IPR) protection.  To help you understand whether nearshoring is right for you, let’s take a [...]

Updated for relevancy: October 3, 2024 The landmark United States-Mexico-Canada Agreement (USMCA) took effect on July 1st, 2020. Having been ratified by all three nations, the USMCA replaced the former North American Free Trade Agreement (NAFTA), which had been in effect since 1994. The transition marked a significant shift in North America’s trade policy landscape. Many have called the USMCA a new NAFTA, or NAFTA 2.0—and for good reason. Like [...]

Manufacturers of all sizes are always looking for ways to optimize efficiency. If your operation is currently based in the U.S., you know firsthand that industrial space is extraordinarily expensive.  Rather than looking for cost-cutting measures elsewhere, one of the most beneficial ways to maximize your bottom line is reconsidering where your warehouses are stationed. For businesses across the U.S., your best option is to move your manufacturing to Mexico. [...]

The global pandemic began due to the initial outbreak of the coronavirus epidemic in Wuhan, China. With no new deaths in the Hubei province for several days, one might assume that manufacturing in China will soon return to business-as-usual, ending the disruptions to the global supply chain that have affected companies in the U.S. and around the world.  However, to the contrary, much of China remains on lockdown. Open factories [...]

Over the last two decades, Mexico has become an attractive nearshoring destination for many American businesses. The growing popularity of establishing manufacturing operations south of the border is due much in part to the IMMEX Decree, which provided significant incentives, exemptions, and economic benefits to IMMEX-registered businesses. But how does the IMMEX program work? What are its characteristics, procedures, and requirements? Read on to learn more about the IMMEX decree.     [...]

Is your business seeking to take advantage of the maquiladora system and IMMEX program by expanding manufacturing operations into Mexico? If so, your success will depend upon your ability to cooperate with the local communities, organizations, and the government. In particular, building relationships with the labor unions—organizations that help employers create healthy work environments and who push for employee rights—is a crucial aspect of running a good maquiladora system. Below, [...]