A Typical Timeline for Moving Manufacturing to Mexico
08.26.22
“As soon as possible” is typically the generalized timeline for any production. However, launching a new operation in a foreign country takes expert logistics coordination and industry experience to guide the process.
The fastest way to begin manufacturing in Mexico is by partnering with a shelter service provider. A shelter can launch production in three to four months, compared to the six or seven months it takes to establish a new legal entity.
Though every project is different, here’s what you can typically expect when it comes to setup.
Site Selection Is the First Priority
Establishing an IMMEX-approved building is the first milestone in the production timeline. Once a site is chosen, companies manufacturing in Mexico must meet IMMEX program requirements, deeming the building ready to use before permits are granted. Essentially, the building must be ready to perform the process the manufacturer is requesting for the chosen location.
The site selection and IMMEX approval process takes approximately 30 days before importing equipment and materials for the manufacturing process can begin. Then, the remaining 2 ½-3 months include all the other administrative tasks needed to get the operation up and running. These managed services include customs and trade compliance, taxes and accounting, and HR and recruiting.
By working with a shelter program like IVEMSA, U.S. and other foreign manufacturers benefit from using the IMMEX certification and permits already in place, which allows the process to move faster than operating as a standalone entity. A shelter partnership also means manufacturers are exempt from the 16% VAT on all temporarily imported goods, materials, and equipment, resulting in significant cost savings from day one.
Coordinating Operational Logistics and Optimizing the Timeline
IVEMSA follows a 70+-step checklist and schedules weekly calls outlining what’s needed from every administrative department to ensure nothing is missed and everything runs as smoothly as possible. It includes everything from building selection and improvements to the final steps before the operation is ready to officially launch. The process increases efficiency and can quickly identify potential areas which could cause delays.
The most common setback is caused by being unable to find a building. With an active market, there are typically multiple companies interested in the same location, which means manufacturers must be decisive when it comes to site selection. Otherwise, there’s a waiting period until the next building comes available.
A lack of decision-making regarding building improvements, layout changes, hiring employees, and adding new production can also push the timeline back. However, having a shelter solution in place gives manufacturers an established infrastructure to help them focus and stay on track.
Shelter or Standalone: What’s Faster?
A shelter provider can also help manufacturers set up a standalone entity, if preferred, but it can take double or triple the time. Making the choice between a standalone and a shelter depends on what’s best for the company and project, though usually, manufacturers are seeking the “ASAP timeline,” so they choose the shelter route.
Either way, IVEMSA makes the transition to Mexico manufacturing streamlined and efficient. By taking care of all the administrative setup, companies can dedicate their time solely to production.