Maximizing Shelter Services in Mexico: 4 Keys to Manufacturing Success

Shelter services in Mexico have become a strategic advantage for U.S. and other foreign manufacturers wanting to leverage the full potential of nearshoring to Mexico. It’s encouraged global brands from various sectors – including automotive, aerospace, and medical device manufacturing – to continue increasing their foreign direct investment, making the U.S. the largest trading partner of Mexico.

Mexico’s shelter program allows foreign companies to conduct business without the risk and liability of setting up their own entity. Therefore, with the support of a shelter company, manufacturers can seamlessly navigate Mexico manufacturing, enabling them to get their production up and running faster.

Additionally, there are several incentives, including tax benefits and duty-free zones, that a shelter company can help manufacturers secure. The availability of shelter services in Mexico has encouraged manufacturing growth over the years and continues to set up U.S. and other foreign manufacturers for success.

Here are key areas where shelter services in Mexico provide the most value:

Recruiting Industrial Labor

Mexico wisely invests in its educational institutions and training programs to sustain a steady pool of technical, well-trained talent. This makes it an attractive option for U.S. and other foreign manufacturers seeking to fulfill various roles for production at a lower cost.

One of the primary benefits of implementing shelter services in Mexico is gaining the expertise and networking accessibility for recruiting and retaining industrial labor. Furthermore, manufacturers save on administrative costs necessary for the recruiting process, including HR, payroll, and accounting rather than having to hire these departments separately.

Site Selection for Strategic Locations

Mexico’s proximity to the U.S. market also makes it a strategic location for production. In addition to recruiting industrial labor, site selection is an essential part of shelter services in Mexico.

A shelter company like IVEMSA creates a site selection matrix which narrows down viable facilities and compares costs between locations. This helps manufacturers secure competitive space and continue with the next steps for production. IVEMSA is then responsible for leasing the facility and all necessary permits and licenses. This helps to expedite setup and achieve a production launch date in as little as three to four months.

Streamlined Regulatory Compliance

Implementing shelter services in Mexico also reduces the learning curve for U.S. and other foreign manufacturers when navigating the complexity of Mexico’s laws and regulations. Plus, a shelter company helps manufacturers benefit from the unique tax advantages offered under Mexico’s IMMEX program.

Approval into the IMMEX program grants manufacturers a 16% VAT exemption for all temporarily imported materials needed for production. Since a shelter company maintains all required permits and licenses, including IMMEX certification, manufacturers working with a shelter automatically receive this benefit, resulting in significant cost savings.

Maintain Production Control

A shelter company handles all administrative responsibilities, which include HR, accounting, daily trade operations, and payroll. Therefore, manufacturers can fully focus on production while also maintaining complete control and ownership over all processes and intellectual property rights.

Moreover, shelter services allow for flexibility to scale up or stop production as needed. Though IVEMSA maintains a 15-year average customer retention rate, manufacturers are free to establish a standalone entity at any time.

Operating in a foreign country comes with its own set of challenges. Therefore, working with a shelter company is the most popular option for U.S. manufacturers new to setting up operations in Mexico.

Learn how our shelter services can benefit you. Contact IVEMSA today.