La Asociación de empresas Manufactureras de Exportación de San Luis Potosí A.C. (index San Luis Potosí) será representada durante los próximos dos años por el nuevo presidente Jesús Octaviano Aguirre, quien seguirá trabajando para impulsar a las compañías maquiladoras e industria manufacturera y servicios de exportación de la entidad.
“Han hecho muy buen trabajo y yo vengo a tomar un gran reto, lo que vengo a aportar es la experiencia y conocimiento que tengo en el sector, ser un enlace y representar al gremio, así como, las relaciones que ha logrado a nivel industria, gobierno, tanto local, como nacional e internacional”, compartió.
Actualmente, index San Luis Potosí está conformada por más de 30 empresas manufactureras de exportación de talla mundial y cuentan con cerca de 15 alianzas estratégicas con diferentes instituciones y empresas de servicio del sector manufacturero de exportación, así como, convenios de colaboración con gobierno.
“Identificaremos entre todo el equipo cuáles son las oportunidades que tenemos y nos enfocaremos en eso, la intención no es querer hacer algo que cueste mucho esfuerzo y tenga poco resultado, realmente es ser objetivos en lo que se puede lograr, con sus limitaciones y panoramas mundiales, no es el momento más fácil para crecer, pero la asociación tiene oportunidad de hacerlo ante las adversidades, sobre todo, porque somos un porta voz del sector”, aseveró el presidente.
Como parte de los impulsos al sector IMMEX en la entidad, el presidente señaló que es de suma importancia la actualización constante y eventos de capacitación, mismos que han destacado a index San Luis Potosí como el principal proveedor especializado en el programa.
“Lo que queremos primordialmente es crecer el número de socios en un 15% en los próximos dos años y también aumentar los servicios que damos como seminarios, capacitación y entrenamiento”, dijo el ingeniero.
Asimismo, darán seguimiento a proyectos y programas que faciliten la actividad de las empresas y a los acuerdos que se promueven con el propósito de encontrar posibles soluciones a problemas específicos de los socios.
Start a business in Mexico. Incorporating a company is simple with a shelter company.
Incorporating a company from abroad is a complicated task if you do not count with personnel in Mexico with know-how and experience in this process and who can submit all the paperwork required before the authorities. As each country count with different processes and regulations for company incorporation, it is important to learn beforehand about the process to know what to expect.
Mexico allows foreigners to incorporate and operate companies in Mexico without limitation in most cases, some activities in Mexico are restricted for foreigners. The main steps for incorporating a company in Mexico are:
Determining the type of entity. The 3 most frequently used corporations in Mexico are:
Sociedad Anónima (“S.A.”).
Sociedad de Responsabilidad Limitada (“S. de R.L.”)
Sociedad Anónima Promotora de Inversión (“S.A.P.I.”)
Contacting an expert is always important to receive advice on which type of entity is best for your company, in some cases even incorporating a company is not needed for establishing operations in Mexico, therefore it is always important to contact the experts to receive advice on this topic.
Following on determining the type of entity, the company must determine the corporate name of the new entity, which must be authorized by the Ministry of Economy.
Once the name of the new entity is authorized the company shall proceed with the drafting of the bylaws, which must include among others:
Name of the company and its address.
Object of the company: You should include the corporate purpose and the main activities of your business in detail, and every other activity related to the business that you will carry on.
Name and data about shareholders/ partners, including the number and percentage of ownership. Under Mexican law, all three abovementioned entities must have at least a minimum of two shareholders/ partners.
The data that will be requested for the shareholders/ partners is the following:
Date and place of birth
Nationality
Address
Main occupation
Age
RFC and CURP (if applicable)
The partners must appoint the corporation’s management (either a Board of Managers or a Sole Manager).
Name of the Statutory Auditor (Comisario)
Rules on profit distribution
Powers of attorney granted to individuals: When the new company has foreign shareholders/ partners it is important and recommended to appoint someone in Mexico to appear before the public notary and perform other administrative tasks before the authorities. If the power of attorney is granted to a foreigner, it must be apostilled/ legalized in the country of origin. Afterward, it must be translated to Spanish by an official translator and notarized in Mexico.
Characteristics and organization of annual partners/ shareholders meeting.
A social capital and nationality chapter must be included when the shareholders/ partners are foreigners.
Causes and procedure for dissolution or liquidation.
Bylaws signature
The signature of the by laws must take place in Mexico, in the State where the company has been incorporated. Incorporating shareholders must appear personally or represented by an attorney-in-fact before the Notary to incorporate the company.
The new company must have a physical address in Mexico for incorporations purposes which can be subsequently changed.
Additionally, if it’s the case a copy of organizational documents duly notarized and certified by Apostille or legalized, must be provided.
Registration Before Authorities
Once incorporated, the first step is to register the new company before the Public Registry of Commerce (Registro Público de Comercio).
Afterwards the company must be registered in the Tax Administration Service (SAT) in order to obtain its tax id (RFC).
If the company counts with foreign shareholders/partners shall be registered before the National Registry of Foreign Investments (RNIE)
As most companies hire employees they should register before before the Mexican Institute of Social Security (IMSS) and the Institute of National Housing Fund for Workers (INFONAVIT).
Depending on the business activities of the company it may need to obtain additional registrations before different government agencies.
At Mexcentrix, depending on the nature of your company, we can get your company running in as few as 30 business days with a cost-effective and flexible shared business services plan.
Do you still have doubts? Feel free to contact us, we have helped several foreign companies through out the incorporation process in Mexico to start operations.
Amazon.com Inc AMZN.O said on Thursday it has invested $100 million in opening new warehouses in Mexico, including its first shipping centers outside the populous capital area, in a bid to offer faster deliveries.
The new sites include two so-called fulfillment centers – one near the northern city of Monterrey and another near the central city of Guadalajara – as well as a support building in the State of Mexico, just outside Mexico City.
Amazon also opened 12 delivery stations, bringing its total to 27 across the country, it said.
“The construction of a solid infrastructure network allows the company to stay closer than ever to clients, and thanks to that, it’s possible to offer fast deliveries,” Amazon said in a statement.
Monterrey and Guadalajara are the two biggest metropolitan zones of the country after the sprawling Mexico City area.
The new facilities represent 69,000 square meters (742,710 sq ft) altogether and create 1,500 direct and indirect jobs, Amazon said.
Amazon in total now runs five fulfillment centers, two support buildings and two classification centers in Mexico, where it launched its marketplace in 2015.
Enrique Alfaro, the governor of Jalisco state that is home to Guadalajara, said the new local warehouse would help more small and medium sized businesses ship their products faster and at lower costs.
Amazon is also striving to make inroads in Brazil, where it recently opened its fifth and biggest fulfillment center in the country, with 100,000 square meters (1,076,391 sq ft).
In both countries, which are the biggest economies in Latin America, Amazon is vying with local rivals for shopper loyalty, despite its ranking as the world’s biggest online retailer.
The innovation firm Siemens will invest US$14 million in Mexico between 2020 and 2021, mainly focused on innovation and development, Alejandro Preinfalk, president and CEO of the firm in Mexico, Central America and the Caribbean said in a statement.
Preinfalk stressed that at least a third of said investment will be allocated for research, since Mexico has important programs regarding motors and electrical systems.
“We are also working on automation and digitization systems, as well as manufacturing systems in the cloud,” he said.
For his part, Marco Cosío, vice president of Siemens’ Smart Infrestructure division for Mexico, Central America and the Caribbean, stressed that they will also expand their production capacity in Mexico, adding new product assembly lines that are made outside North America.
“It is to increase the capacity in switches, also to have more digital lines thinking of bringing products that are made abroad (…), for that reason we are expanding our hiring of personnel,” said the manager, noting that 1,500 people have already added in four months.
Cosío added that by 2030 they will be neutral in carbon emissions worldwide; “In Mexico these measures are already being taken, one of them is energy efficiency.”
Choosing Between Mexico vs China for Manufacturing
The manufacturing industry has been growing exponentially, therefore, lately, companies within this sector seek to move or expand their production to other locations, looking for a more cost-effective location, taking into account, among others: labor costs, supplier network, logistics. In order to find the location that best supports their growth strategy. Let’s compare the manufacturing in Mexico vs China.
China and Mexico are considered low-cost manufacturing countries, therefore they are most of the time considered as an option for nearshoring or offshoring. So which country could be the best option for your company to settle in?
In this document, we will focus highly on the best option for US manufacturing companies. According to a PwC study, currently, US manufacturers have been considering transferring their production to Mexico, moving it from China, as they can reduce operating costs, on average, by an additional 23% (PWC, 2020).
According to this same study, PWC taking into account the operating cost of a hypothetical product, estimated producing it in China was 27% less expensive than producing in the US, and as in Mexico logistics and tariff and fees costs are much lower companies could save the additional 23% before mentioned.
Source: PWC. (2020, July). Beyond China:US Manufacturers are sizing up new and more diversified cost- efficient global footprints. . Retrieved from PWC: https://www.pwc.com/us/en/library/fit-for-growth/assets/ffg-industrial-supply-chain-footprint.pdf
Main factors that could impact the operating costs in manufacturing in Mexico vs China.
Mexico vs China: Labor cost
Within the most important factors taken into account when performing analysis for expansion of operations is the labor cost. One of the main competitive advantages of Mexico and China is their low labor cost. Which according to Statista the average manufacturing labor cost per hour in China is 6.5 USD per hour with an increase of 13% from the previous year. While in Mexico it is 4.82 USD per hour, with an increase of only 4% from 2019 (Statista, 2020). Which shows a trend of a higher increase in wages in China compared to Mexico.
The above mentioned year per year increase has also been impacted by the MXN – USD exchange rate, the devaluation of the MXN peso against the USD in the last years have reduced the effective labor rate inflation.
Source: Statista. (2020). Manufacturing labor costs per hour: China, Vietnam, Mexico 2016-2020 Published by Erin Duffin, Aug 9, 2019 In 2018, manufacturing labor costs in China were estimated to be 5.51 U.S. dollars per hour. This is compared to an estimated 4.45 U.S. dollars per. Retrieved from Statista: https://www.statista.com/statistics/744071/manufacturing-labor-costs-per-hour-china-vietnam-mexico/
It is important to take into account that the manufacturing labor costs for both countries are just an average as a means of providing insight, as labor costs will vary per region, workforce skills, and level requirements, among others.
Furthermore, the minimum wage in Mexico is $123.22 MXN per day in almost all regions of the country, except in the Northern Border which is $185.56 MXN per day with an average minimum wage per month of $220.9 USD compared to $368.5 USD in China.
Lastly, Mexico is considered to have greater productivity with 48 hours work week compared to a generally 40-hour workweek, in which after this overtime must be paid.
Mexico vs China: Tariffs and taxes
Due to the US-China trade war, the US has imposed tariffs on more than $360 billion of Chinese goods. Although this year a tariff agreement was signed, and the U.S. agreed to lower tariffs on $120 billion of Chinese goods to 7.5%, tariffs are still higher than in Mexico, and it is also important to take into account that some of the most challenging issues weren’t solved.
On the other side, the United States- Mexico- Canada Agreement (USMCA), allows goods to be exported and imported between the US and Mexico free of tariffs under specific conditions.
Furthermore, Mexico counts with foreign trade incentive programs such as IMMEX, VAT and IEPS Certification, PROSEC, Rule 8th. One of the most common is the IMMEX Program which is an instrument that allows the temporary import of goods that are used in an industrial process or service, to produce, transform or repair foreign goods imported temporarily for subsequent export, without paying VAT and countervailing duties, and deferring or not paying General Import Tax.
Mexico vs China: Logistics
One of the most known competitive advantages is Mexico’s favorable geographic location, due to its proximity to the United States and its access to the Atlantic and Pacific. In regard to goods being shipped to the United States, according to Mexico Business, Mexico counts with an 80% logistics time advantage due to its proximity to the U.S., and 75% logistics cost advantage over China. Thus making Mexico a better option when deciding manufacturing in Mexico vs China.
Mexico vs China: Supply Chain
All the mentioned factors affect the supply chain cost structure. Therefore, it is important to take into account when analyzing supply chain sourcing. According to the before-mentioned PwC study, through an analysis taking into account labor content and Product Value density, based on $450 billion of manufactured goods imported from China to the US in 2019, 20% of those goods could achieve cost efficiencies if nearshore to Mexico (18%). (PWC, 2020).
Comparison table Mexico vs China
As a summary from the above-mentioned discussed factors, pleased find below a comparison table of manufacturing in Mexico vs China:
Are you thinking of moving or installing your manufacturing to Mexico?
Mexcentrix offers high-value, cost-effective and flexible shelter services and outsourcing that will get your operation in Mexico highly functional at a lower cost and successfully producing within a shorter timeframe than you can achieve on your own—all while significantly reducing the risks associated with a start-up. Contact Mexcentrix for a feasibility study or cost estimation today!
Rail equipment manufacturer FreightCar America will shift all manufacturing to Mexico as part of moves announced Monday. The company has completed purchase of its partner’s 50% interest and now is sole owner of its new Castanos, Mexico, plant where it all railcar manufacturing will be based by February 2021. The company will close two U.S. plants. It secured a $40 million loan with a global investment firm, and will add a member of that firm as one of two new members of its board of directors. The other new member will be Jesus Gil, general manager of the Castanos facility and a veteran of the railcar industry who has managed operations for two of FreightCar America’s primary competitors. It will hold an online special meeting of stockholders to complete the loan funding by late November. “We exit a prolonged period when our business was hampered by high costs, sustained losses and a generally challenged competitive position,” company president and CEO Jim Meyer said in a press releas “We now enter a new chapter, where our business will be supported by a single new production facility designed specific to our needs, a highly experienced and cost competitive workforce, and a significantly enhanced competitive profile that includes a $25 million reduction in annual fixed costs achieved through the closures of our two facilities in Cherokee, Ala. (‘Shoals’), and Roanoke, Va
Auto component major Motherson Sumi Systems on Tuesday has signed an agreement to acquire the activities of Electrical Wiring Interconnection Systems (EWIS) performed at Bombardier Transportation’s manufacturing site in Huehuetoca, Mexico (BT Ensambles México).
MRS is part of the Motherson Rolling Stock Division which designs and manufactures electrical cabinets, power packs and electrical distribution systems for leading rolling stock manufacturers.
The transaction includes the transfer of assets, employees and inventories, on a debt-free and cash-free basis and is valued at around US $ 10 million approx, the auto component maker said in a release. The transaction is subject to customary closing events and expected to complete in Q4 FY20-21, it added.
Vivek Chaand Sehgal, Chairman, MSSL said, “Our focus is always on adding value to our customers’ supply chain and catering to their requirements. This is another step forward in that direction. We are further strengthening the relationship with Bombardier under the global partnership agreement and our collective strength will position us as a preferred solutions provider to our customers in the rolling stock business.”
“The acquisition of the business will enable us to be a truly global partner to our customers as we get the opportunity to serve them in the North American market”, said Andre Gerstner, President, Rolling Stock Division, PKC Group.
According to Jim Vounassis, Chief Operating Officer, Bombardier Transportation “Bombardier Transportation aims to enhance its adaptability and agility to changing market conditions, in order to continue to increase its competitiveness and improve its global footprint. This divestiture is in alignment with our global transformation strategy of reducing the activities to our core- and integrating competencies.”
Dachser Mexico, a subsidiary of global logistics provider Dachser, announces it is expanding its bonded warehouse facility located in Parque el Marqués at Querétaro, one of Mexico’s key manufacturing hubs. Addressing the growing needs of the market, this new state-of-the-art facility launched October 1.
Considered the crown jewel of the Bajio manufacturing region, Querétaro’s main manufacturing industries include automotive assembly, auto parts, aerospace and household appliances. The region touts a highly skilled manufacturing workforce of more than 176,000 people employed by over 1,300 companies in the region. Querétaro’s central location gives it access to more than 45 million people within a 350-kilometer radius.
“As Mexico’s manufacturing sector continues to grow, we are elevating our investment in the market to ensure supply chain fluidity in the region. Our goal is to help our customers maximize the potential Mexico has to offer,” said Edgardo Hamon, Managing Director, Dachser Mexico. “This newly expanded bonded warehouse facility in Querétaro will provide a competitive advantage to companies of all sizes and demonstrates Dachser Mexico’s continued commitment to the growth of this vital economic region.”
Utilizing Mikado, Dachser’s proprietary global warehouse management system, this expanded best-in-class bonded warehouse facility is equipped to support the manufacturing sector as well as other industries. It will offer 4,000 square meters of total warehouse space with an electrical sub-station on premises. It will also provide a wide variety of enhanced service capabilities as well as a competitive end-to-end solutions portfolio.
Some of these enhanced services include vendor managed inventory (VMI) system capabilities that enable customers to quickly replenish inventory without disruption. Also, safe storage is a top priority, as the site is also outfitted for the storage and handling of dangerous goods in accordance with compliance regulations. It is equipped with state-of-the-art fire alarm systems to ensure safe storage conditions.
Further, container yard services offer customers flexible storage solutions along with full and transparent access. Other services include UVA labeling with pick-and-pack outbound shipment services, process optimization from sender-to-buyer with extended distribution cut-off times and warehouse pick-up times. Moreover, the facility will be able to assist customers in meeting the dynamic challenges faced in their supply chains by providing flexible response times caused by seasonal and irregular demands.
“These investments are needed not only to boost support for our customers, but to also provide speed, reliability and simplicity in the supply chain to this economically important region,” added Mr. Hamon. “Leveraging Dachser’s global footprint and extensive network, Dachser Mexico will continue to invest in warehouse and distribution solutions that support seamless logistics benefitting our customers while reducing complexity.”
With more than 170 warehouses worldwide and over two million pallet spaces, Dachser offers its customers comprehensive supply chain solutions throughout the globe. As Dachser Mexico increases its presence in the area, businesses will have greater ability to reach more of their customers and markets.
Optimize your company’s processes and costs with by outsourcing in Mexico
Do you know what outsourcing is and what its direct benefits are? We are sure you have heard this term before. However, for many people, it can cause confusion. In our article, we will talk about what outsourcing in Mexico involves, and the benefits for the companies or businesses that make use of this strategy.
What is outsourcing?
Talking about outsourcing is often a controversial topic. Outsourcing is nothing more than the subcontracting of employees or the subrogation of the workforce. Many companies, such as Telmex in Mexico, make use of subcontracted employees to perform the installation of their equipment in many homes.
This is done to pay a little their employees less, who are not directly hired within the company. By additionally focusing on the tasks of workers than have a contract. Subcontracted employees are not unionized and do not generate seniority. However, this does not mean that the company is exempt from responsibilities.
According to information on the website occ.com.mx, the SAT in 2018 made changes in the way subcontracting should be carried out. This was with the intention of protecting employees of companies that were not regularized. Additionally, in this update, the process to comply with all the rules by the companies was made known.
Companies can reduce quite a few costs with this contracting model. Imagine that as an entrepreneur, you want to hire 10 professionals to perform inspection tasks that your area of supervision cannot afford to perform. These 10 employees will not be hired directly by you, so the labor can be paid cheaper. Usually, the staff is part of another company, which is in charge of fulfilling all the safety conditions of these employees.
Apart from all this, expenses are minimized by the human resources areas by not depending on them with a fixed salary.
By outsourcing, we avoid fines from the SAT
We already mentioned this, but it’s worth repeating. For the last two years, the SAT has made an emphasis on the strick regulations for companies that subcontract the services of personnel for different tasks. Just think about this: You are an entrepreneur who is going to hire 5 people to install modems and for each installation, you are going to pay 25 USD.
These payments can be made via deposit and justified as an extra expense but without the need to withhold taxes for the SAT, since these external suppliers do not belong to your company, but to another. In this case, the people who receive the profists are responsible to account to the tax authorities.
Continuous growth of your business
Many companies use this business model to consistently grow their business. If we assume that a business invests 10,000 USD in the payments of workers hired through outsourcing, but obtains profits of 75%; it will be able to reinvest the profits in hiring more personnel, progressing in a scalable way.
Let’s see it with an example: The first month, the company invests those 10,000 USD in labor that can be provided by an external supplier; from which it receives 75% in profits (after taxes). By the second month, the company will have 17,500 USD to invest in labor, which will give them a profit of 13,125 USD and will have 30,625 USD by the third month. Businesses can easily be scaled by outsourcing in Mexico.
Companies can look like specialists, without really being one
One of the biggest advantages of contracting external suppliers is that startups or established companies can offer services of which they may not be experts in. Company “A” may be able to offer its digital marketing services to thousands of clients, but the ones who will really take care of executing these tasks will be the external providers, or company “B”. This way company “A” will gain prestige as an expert in digital marketing, when in fact they may or may not be experts in that area.
Minimize expenses and investment in innovative equipment
Another great benefit of outsourcing is the fact that you don’t have to invest in buying big! No need to buy equipment to manufacture or offer innovative products to your customers. Why buy an expensive machine when many companies already have one?
In the case that you need to manufacture some industrial or artisan pieces; you can subcontract this service to a company that has the necessary machinery to take care of this. Of course, providing the quality and efficiency in the service that your clients expect.
It is not superfluous to tell you that you should pay special attention to the fact that your suppliers deliver quality and in the agreed times. You must also make a financial allocation to project the expected after-tax profits.
Why hire the services of an outsourcing company in Mexico?
Now that you know the benefits of outsourcing, perhaps you are wondering where to find specialized personnel. Mexcentrix’s team will be happy to guide you through more information. Wehave all the know-how and the profiles you need to carry out the process of outsourcing personnel in Mexico.
In case you need to hire a specialist, you will not depend on interviewing thousands of candidates; our outsourcing company will be able to do this for you.
But that’s not all. Did you know that there are outsourcing companies that can even help you set up your own company in Mexico? Or, instead , send machining directly from abroad to Mexico, where labor is much cheaper?
Hiring an outsourcing company will allow you this and much more. Scale your business quickly with the help of specialists, innovating, focusing on your responsibilities, and saving money.
We invite you to think about outsourcing as an alternative to your company or startup. We are sure that it will be very helpful to you.
The maquiladora industry of medical devices in the state of Baja California could close the year with a generation of 85,000 jobs, since this sector, despite the contingency derived from COVID-19, has grown in labor, said the Ministry of Sustainable Economy and Tourism (SEST) of the state of Baja California.
“This sector started the year with 71 (new) jobs and despite the pandemic, we are going to close the year with more than 85,000 jobs, which speaks of the confidence there is to invest in Baja California”, explained the head of the SEST, Mario Escobedo Carignan.
The official said this within the framework of the delivery of 10,000 surgical masks to the General Hospital of Tijuana, donated by the Availmed company, derived from the efforts of the Maquiladora Industry and Export Manufacturing Association (INDEX) Zona Costa.
Availmed is a manufacturer of single-use disposable medical articles, which produces for major brands in the global market, is part of the industrial giant Flextronics and has a workforce of 3,100 employees in Tijuana.
Among other products it manufactures are catheters, devices for the treatment of vision, syringes, plastic parts, medical instruments and feeding bags for pathological treatments.
Escobedo Carignan previously reported that Medline Industries, another manufacturer in the medical sector, will expand in Mexicali. It has two manufacturing plants for its sterile surgical tray and Centurion divisions, where it will employ 2,200 employees. Likewise, the minister explained that the economic reactivation has been developed in a responsible manner, which has placed the entity as a leader in the economic reactivation of the country as well as in the generation of new jobs.
