Easing the Transition to Mexico with Shelter Manufacturing Services

Mexico’s strategic location and cost-effective, skilled workforce have created a successful environment for U.S. and other foreign manufacturers that want to expand their reach. Shelter manufacturing services are available for those new to operating in Mexico as well as those who wish to establish their own legal entity.

When working with a shelter, foreign operators reduce their legal risk and exposure. Plus, there is a reduced learning curve when navigating Mexican laws and regulations. Either way, though, shelter services can be customized to meet the needs of each manufacturer and project.

Here are the main advantages shelter services provide and how they help to ease the transition for foreign companies manufacturing in Mexico.

Reduced Costs

Manufacturers that choose the shelter route save significantly on operating costs, including labor, infrastructure, and permitting and licensing fees. The need for outside consulting is limited as all administrative departments needed to launch production are already in place.

These include HR and payroll, taxes and accounting, and trade compliance services. Passing these responsibilities to a shelter company allows manufacturers to focus fully on operational processes and fully maintain control over intellectual property rights.

Tax Incentives

A shelter company also provides instant tax advantages and trade benefits. Every foreign company manufacturing in Mexico must be approved for the IMMEX program before production can start. The program exempts foreign manufacturers from the 16% value-added tax (VAT).

Through a shelter’s certification, this exemption is automatically applied to all temporarily imported goods, equipment, and materials needed for the manufacturing process. Furthermore, duties are not applied when exporting finished goods to the U.S. and Canada if they are marked as “Made in Mexico.”

Quick Startup

When implementing shelter services in Mexico, manufacturers can expect to launch production in three to four months. This cuts the setup time nearly in half compared to the time it takes to set up a new legal entity. This efficiency saves costs and allows manufacturers to get products to market faster.

Service Flexibility

Shelter manufacturing services are designed for flexibility as manufacturers want to scale. Also, they are set up to support companies that eventually want to “graduate” from the shelter and become their own separate entity. With the constant changes that can occur during production, it’s helpful to have the agility to transition as needed.

History of Success

Manufacturing in Mexico has been a unique advantage for U.S. and other foreign manufacturers for decades, spanning across multiple sectors. For 40+ years, IVEMSA has provided shelter services in Mexico to help manufacturing companies launch and manage their production. With a 15-year average retention rate, there is a reputation and history rooted in success when partnering with clients as they grow their businesses.

Seeking Shelter Service Support

Making the transition to Mexico manufacturing can be challenging without the guidance of a local shelter company to streamline the process. Whether you are expanding production for the first time or seeking the support shelter services provide, our team can help you figure out the best route.

Contact IVEMSA today.