Maquiladoras do not pay taxes or duties for temporarily imported materials for manufacturing. That’s how foreign investment in Mexico works
The maquiladora scheme
An ideal program for foreign companies
To know how the foreign investment in Mexico works, it is necessary to be familiar the concept of maquiladora and how it works in this country.
A maquiladora is a business model born in Mexico. It consists of a foreign company that decides to set up an additional plant in another country to process materials.
To do this, materials from another country are imported to be assembled or manufactured. Once the material is processed, the merchandise is exported.
Guaranteed business model
IMMEX regulates the behavior of any maquiladora
To operate a maquiladora in mexico it, it is necessary to submit an application to the Secretary of Economy. This way, the regulatory decree of maquiladoras (IMMEX) is in charge of deciding if a company has the necessary requirements to enter this model.
The concessions provided by this program are the exemption from the payment of the general import tax and the value added tax. There are times when compensatory dues are also deferred, and it depends on the IMMEX agreement.
Mexico carries out fabrication, assembly and manufacturing processes for foreign companies through maquiladoras
Operating models for manufacturing
There are four basic operation models for manufacturing. Depending on the intervention that a company wishes to manage with respect to its new plant, it must choose the one that most resembles its purpose.
1. Direct ownership: This model allows the investment company to settle in Mexico and manage its financial, legal and administrative operations autonomously, having a total corporate presence in the country.
2. Shelter: This is a form of outsourcing, where the foreign company hires administration and manufacturing services without having to worry about operating, it will simply receive the final manufactured product.
3. Subcontracting: When a company requires manufacturing services, it can assign production to the manufacturing company of its choice.
4. Joint investment: When a company already exists in Mexico, another foreign company can join the operation to create a larger company.
Incentives for investment
Government programs to support the industry
Settling in Tijuana, Mexico, implies additional benefits because the region seeks government collaboration to generate plans and programs to promote foreign investment. Among the local, state and federal efforts, results have been translated into savings for investors.
The state government provides assistance for the initial recruitment of a company.
At Tijuana EDC, we link companies with the three levels of government to motivate dialogue, agreements and participation, in order to drive initiatives that benefit the industry.