How the IMMEX Program Allows Manufacturing Companies to Maximize Savings
By Alejandro Lara Cruz | Board Member at American Industries Group®
The IMMEX program can benefit international companies manufacturing in Mexico, but many people have questions about exactly how it works. In this article, we share more details about IMMEX, such as requirements to apply, the types of goods eligible for the program, registration categories, and the easiest way for your company to take advantage of the savings it offers.
What is IMMEX and why is it so important?
The Mexican Manufacturing, Maquila, and Export Services Industry program (IMMEX) was enacted in 2006. It was implemented to attract foreign investors to the country by allowing them to defer (and in many cases waive) the payment of the general import taxes, value-added tax, and any applicable countervailing duties on raw materials and other equipment to be used in the manufacture, transformation, or repair of goods or services destined to be exported. This translates into significant savings for companies manufacturing in Mexico or setting up maquila operations here.
What are the requirements to apply?
Non-resident companies must provide a variety of documentation to prove they are legally operating in the country and are up to date on all tax obligations, along with a detailed description of its processes or services, as well as documents proving legal possession of the facilities where operations will be carried along with and supporting documentation for this. Once this information has been collected, it must then be submitted electronically through the Ministry of Economy’s website. Next, a notary will prepare an affidavit regarding the veracity of the documentation and location of the operations.
What goods are eligible and what are the registration categories?
There are three categories of goods that qualify for import through the IMMEX program:
- Raw materials, parts and components which are to be totally integrated into export goods; fuels, lubricants and other materials for consumption during the production process of export goods; containers and packaging; labeling and leaflets.
- Shipping containers and boxes.
- Machinery, equipment, tools, instruments, molds and spare parts for the production process; equipment and devices for contamination control, research or training, industrial security, telecommunications and computing, laboratory, measurement, product testing and quality control; and those involved in handling materials directly related to export goods and others linked to the production process; and administrative development equipment.
In addition, companies must enroll in one or more of the following categories depending on their operations or business model:
- Industrial: A direct form of registration for manufacturers importing goods for use in an industrial process to produce goods for export.
- Services: Applicable to services rendered in association with goods exported under IMMEX registration. This includes legal entities, software developers, recyclers, and other service companies.
- Holding Company: Applicable to the manufacturing operations of a certified holding company and one or more subsidiaries integrated into the same program.
- Outsourcing or Third-Party: Allows certified companies that do not have the facilities for manufacturing processes to perform production processes through a third party that registers under its program.
What is the easiest way to take advantage of IMMEX?
By far, the easiest way to take advantage of the savings available through the IMMEX program is by registering under the Shelter category. This modality allows foreign companies to work through the legal entity of a certified Shelter provider in Mexico that assumes all legal risk and liability for the manufacturers operating under its IMMEX registration.
Though having a Mexico-based partner is not required to participate in the IMMEX program, there are many benefits. Working with a Shelter company, simplifies the process of launching a manufacturing operation and allows foreign companies to enjoy the savings of the IMMEX program, in addition, it manages the array of administrative tasks related to the operations in Mexico. Companies are then free to focus all their efforts and human resources on the manufacturing side of their business, paving the way for success.
In addition, a Shelter company facilitates the IMMEX process further by handling the considerable amount of paperwork and records that must be kept and filed to maintain IMMEX registration once it has been granted. This can represent a significant regulatory burden for businesses that are unfamiliar with legal processes and import law in Mexico.
In summary, IMMEX is a program that is advantageous for international companies manufacturing in Mexico. When this is added to the savings available under numerous free trade agreements, the affordable labor rates in Mexico, and the ease of logistics, it is a clear competitive advantage.
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