what-is-a-maquiladora-business-model-and-how-does-it-work
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What is a maquiladora business model and how does it work?

Around the world, big companies are usually maquiladoras. Although the concept is not used outside Mexico, the concept is very similar to a factory, but not any kind of factory. If you want to know what is a maquiladora business model, let us explain it.

The concept of “maquiladora”

Generally speaking, a maquiladora is a factory operated by a foreign company that settles in Mexico to process material and export it to that company’s country. That’s the proper concept of a maquiladora, but in reality it includes many more aspects that benefit a company.

It is relevant to mention that this model was born in Mexico and it’s exclusive of this country. It started decades ago and it has been regulated to allow the development of industrial capacity and the growth of the Mexican economy.

Exemption of taxes

The real advantage of maquiladora companies is that they do not pay taxes or duties for temporarily imported materials that are assembled or manufactured. Once the process is finished, the products or merchandise are exported to the country of origin.

Some of the benefits of running a maquiladora include:

  • Exemption from the payment of the general import tax
  • Exemption from payment of value added tax
  • No tariff rates
  • Agreements with the Ministry of Economy
  • Possibility of modification of program and modality
  • Total control over the operations of the maquiladora

How to operate a maquiladora in Mexico

what-is-a-maquiladora-business-model-and-how-does-it-work

As mentioned before, the maquiladora business model is regulated, and this is done by the regulatory decree of maquiladoras (IMMEX), as well as the Mexican Secretary of Economy. To run one, it is necessary to submit an application and gather all the appropriate requirements.

Setting up a business in Mexico is a smart decision for companies. Nonetheless, they have to be well advised if they want to be successful. There are many aspects that only experts in the field can carry out easily and in the best way.

If you’re considering Mexico to operate a maquiladora, contact us. We are a business consulting organization that will guide you through the process of settling in Mexico and running a maquiladora.