Manufacturing in Mexico: What You Need to Know About Mexican Customs
By Claudia Rivera | Customs Manager at American Industries Group®
Mexico is a key player in global trade, with a robust manufacturing sector that attracts businesses from around the world. With the growing trend of nearshoring, even more companies are looking to Mexico to establish operations. If you are considering manufacturing in Mexico, it’s essential to be familiar with Mexico’s customs entities and functions and how they control and regulate the flow of goods in and out of the country. In this article, we will take an in-depth look at Mexico’s customs, including the public agencies in charge of regulating customs and their main functions. In addition, we will discuss the benefits of working with a provider of shelter services and how they facilitate the seamless flow of goods for companies manufacturing in Mexico.
Main functions of customs
Customs entities worldwide play a critical role in regulating and facilitating trade, acting as gatekeepers of each country’s borders. They are responsible for overseeing the movement of goods, collecting duties and taxes, and ensuring compliance with import and export regulations.
In Mexico, this is no different. The primary function of the country’s customs offices is to carry out the fiscal and regulatory control of goods entering and leaving Mexican territory. This involves verifying that goods comply with customs regulations, such as proper tariff classification, valuation, compliance with import and export restrictions, and other applicable laws.
Customs officers are in charge of assessing the value of goods and applying the appropriate tariffs and taxes based on the Harmonized System (HS) classification, an internationally recognized system for classifying goods for customs purposes.
Customs in Mexico also play a critical role in ensuring compliance with trade agreements and international conventions. Mexico has always been open to trade and is a party to 13 free trade agreements with 50 countries, including the United States-Mexico-Canada Agreement (USMCA). Customs officers verify that goods meet the requirements of these agreements, such as rules of origin, and issue certificates of origin and other relevant documents.
Moreover, customs in Mexico is responsible for facilitating trade and reducing trade barriers. It streamlines customs procedures, implements trade facilitation measures, and provides information and guidance to importers, exporters, and other stakeholders.
Single Window for Foreign Trade (VUCEM)
One way Mexico has streamlined its procedures is by implementing the Single Window for Foreign Trade (VUCEM). Launched in 2011, this electronic platform allows users to complete and submit all the necessary paperwork related to imports, exports, and transit of goods. By using an advanced electronic signature, they can request and receive their documents through the portal in just 24 hours. It is centrally managed so that authorities and government agencies can access information, coordinate controls and calculate and collect corresponding fees, tariffs, and taxes.
The VUCEM also promotes the incorporation of small and medium-sized enterprises into the export business and strengthens the country’s business development.
The public agency responsible for regulating foreign trade operations is the National Customs Agency of Mexico (ANAM). This entity, which operates under the Ministry of Finance, came into existence on January 1, 2022. The ANAM took over customs-related functions from the General Administration for Customs, one of the units of the Tax Administration Service (SAT). As part of Mexico’s efforts to strengthen its public institutions, ANAM was given technical, operational, administrative, budget, and management autonomy. With the launch of an anti-corruption initiative and a focus on tax evasion, by the end of 2021 ANAM collected a record of nearly $49 billion in revenue. The agency is also rolling out measures to modernize processes, invest in infrastructure, develop skills and knowledge programs, and create mechanisms for technological innovation to maximize results.
The SAT, or Mexico’s Tax Administration Service, is the other entity involved in customs and is responsible for collecting and inspecting taxes, including income tax (ISR), VAT, IEPS (Special Tax on Products and Services), and conducting revision of foreign trade operations outside of customs to check for compliance with tax laws. Additionally, the SAT provides interpretation criteria on taxation laws and general rules of international trade. For companies manufacturing in Mexico it is important to note that the SAT is in charge of issuing VAT and IEPS certification and granting status as Authorized Economic Operator.
Mexico’s National Agency of Administration and Customs (ANAM) recently opened their 50th customs office at the Felipe Angeles International Airport in Mexico City, which began operating on March 21, 2022. These 50 offices, which represent one of Mexico’s vital roles in international supply chains, are located at strategic points across the country, with 19 on the northern border with the United States, 2 on the southern border, 17 at maritime ports, and 12 at inland ports.
How working with a shelter provider streamlines customs processes
Though the government has been making efforts to simplify customs processes, a provider of shelter services can help further streamline customs processes and reduce costs and processing times. Customs and import-export administration services are just one aspect of shelter package that can help companies looking to start manufacturing in Mexico set up in the country quickly and worry-free. With an experienced shelter partner, there is no need to learn the process of doing business or how customs processes are handled. They will take care of all paperwork and record-keeping, as well as optimize import duties and help with the transfer of goods between businesses. As a result, businesses won’t have to worry about compliance, liabilities, or if their tax or customs documentation is accurate.
Mexico’s customs play a vital role in supporting the country’s industry, specifically its manufacturing sector, which has become a key driver of its economy. Customs facilitates the import and export of goods, provides trade data and statistics, and enforces customs laws and regulations, all of which are crucial for manufacturing in Mexico. There are many regulations, and the process can be slow and bureaucratic, meaning it can be a challenge for manufacturers to learn to navigate this system. However, working with a shelter provider can eliminate the learning curve and allow manufacturers to start operating from day one, knowing they are in compliance and getting the maximum savings possible.
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