Working with a Mexico Shelter Company Under the IMMEX Decree
07.24.20
For decades, Mexico’s IMMEX program has offered tax benefits to U.S. manufacturers. Companies operating under the program can apply for a VAT certification that allows them to forgo paying import taxes on temporary imports, such as machinery, tools, and other industrial goods, so long as they are exported as finished products within the regulated time frame.
In 2006, the Secretariat of Economy introduced the IMMEX Decree with a goal of “increasing the competitiveness of the Mexican export sector” and “allowing companies to adopt new ways of operating and doing business; reduce logistics and administrative costs; and modernize, streamline and reduce procedures.”
The decree integrates the Temporary Import Programs to Produce Export Goods (PITEX) and the Development and Operation of the Maquila Export Industry. Companies supported by these programs jointly represent 85 percent of Mexico’s manufactured exports. In addition to the tax benefits, other advantages of the IMMEX program include:
- Access to a highly skilled and educated workforce
- Cost-effective labor
- Lower shipping costs
- More efficient delivery times
- Improved quality assurance
Since its introduction, the IMMEX program has been viewed as strong competition to manufacturing in China. A growing number of U.S. manufacturers continue to move all or part of their foreign operations from China to Mexico, due to the benefits set forth by the IMMEX program, as well other general benefits of operating in Mexico, such as logistics and favorable trade relations.
There are five holder categories outlined by the IMMEX Decree. Of the options available, U.S. manufacturers most commonly choose to work with a Mexico shelter company, such as IVEMSA. This allows them to operate under the shelter’s established IMMEX registration and helps to expedite setup.
Value of Mexico Shelter Services
In addition to IMMEX registration, part of the value of Mexico shelter services includes liability protection, compliance guidance, and a wealth of knowledge and experience in various areas. IVEMSA takes care of identifying sites and facilities, securing permits and licenses, and implementing accounting and HR procedures, among other logistics required for operational setup. Alternatively, IVEMSA can help companies create and manage a new IMMEX license when operating as a standalone entity.
An IMMEX program remains valid as long as the holder continues to maintain the requirements and obligations established in the decree. To secure the benefits offered through the IMMEX program, manufacturers must commit to:
- Annual export sales of at least $500,000 or the equivalent in pesos
- Maintaining an automated inventory control system
- Exporting finished goods within the authorized entry period
- Submitting annual electronic reports on total sales and exports
- Contributing monthly data and information for statistical purposes
Manufacturing in Mexico requires accurate record keeping and diligent processes. Working with a Mexico shelter company like IVEMSA delivers a broad knowledge of the organizations, certificates, and regulations involved and how to navigate each. It also allows manufacturers to maintain full control over their operations, while getting their project up and running as smoothly and efficiently as possible.