Maximizing the Benefits of the PROSEC Program: A Guide for Businesses

Mexico’s Sectorial Promotion Program (PROSEC) offers manufacturers valuable incentives that boost their competitiveness in both domestic and international markets. Through preferential tariff reductions on imported production inputs, businesses can lower costs and improve efficiency. This article explores the benefits of the PROSEC program, the key sectors involved, the registration process, and how shelter services can help simplify access to these advantages.

What is the PROSEC Program?

PROSEC helps manufacturers reduce costs by offering tariff reductions on imported goods essential for production. This initiative enables companies to access preferential tariffs, ranging from zero to five percent, regardless of whether the finished products are intended for domestic or export markets. These reductions allow businesses to stay competitive and efficient while optimizing their manufacturing processes.

What are the benefits of PROSEC?

One of the key benefits of the PROSEC program for manufacturers is a reduction in tariffs for imported inputs required for production. By lowering the ad-valorem tariffs for goods listed under Article 5 of the PROSEC Decree, the program helps manufacturers significantly cut production costs. These reduced costs are particularly valuable in sectors like electronics, automotive, textiles, and pharmaceuticals, which rely heavily on imported materials.

Each industry benefits from PROSEC through tailored tariff reductions that apply exclusively to inputs directly related to their sector. However, companies can also apply for inclusion in additional sectors if they expand their production to cover goods in those sectors, further increasing their cost-saving potential.

What is Rule 8?

Rule 8 is an import permit issued by Mexico's Ministry of Economy that offers preferential tariffs on the importation of machinery and inputs used in the production and assembly of goods. These materials must fall under one of the 25 tariff classifications in section 98.02.

What sectors can take advantage of the benefits of PROSEC?

The PROSEC program is available to manufacturing companies across 24 industrial sectors in Mexico. These sectors include critical industries such as electrical, electronics, mining and metallurgy, agricultural machinery, and pharmaceutical products, including medical equipment.

The benefits of PROSEC are particularly significant for industries like manufacturing, automotive parts, other industrial manufacturers, and sectors such as the energy and textile industries. This broad range of eligible sectors allows manufacturers to reduce operational costs through tariff advantages, making PROSEC a crucial tool for companies looking to strengthen their competitiveness in Mexico's industrial landscape.

Requirements for Registering in the PROSEC Program

To participate in Mexico’s PROSEC program, companies must meet several requirements that allow them to access preferential tariffs on imported production inputs. The process begins with submitting a formal request, which includes certified documents proving ownership of both the production facilities and the machinery used. Companies must also provide legal employment contracts for their workforce, certified blueprints, and photographs of the facilities. A positive tax compliance opinion is required to confirm the company’s adherence to tax regulations, and an affidavit must be submitted to verify the accuracy of all provided information.

The registration process is free of charge and typically takes around 15 business days to complete. Once approved, registration is valid for one year, enabling manufacturers to benefit from tariff reductions while ensuring compliance with Mexico's trade regulations.

How shelter services facilitate access to PROSEC

American Industries offers manufacturers an efficient way to immediately access the PROSEC program benefits. By operating under our legal entity, companies can skip the registration process and begin receiving tariff reductions and other incentives right away. This allows businesses to concentrate on production and growth while fully complying with Mexican regulations. Contact American Industries today to learn how our shelter services can help streamline your operations from day one.