Paulina Aguirre

29Jul

Extension of deadlines regarding subcontracting

julio 29, 2021 Paulina Aguirre

In ordinary session of July 23, 2021, the Technical Council of the Institute authorized to extend the 90 calendar days established in Articles 5, 6 and 7 Transitory of the “Decree by which various provisions are amended, added and repealed of the Federal Labor Law; of the Social Security Law; the Law of the Institute of the National Housing Fund for Workers; of the Fiscal Code of the Federation; of the Income Tax Law; of the Value Added Tax Law; of the Federal Law of Workers in the Service of the State, regulating section B) of article 123 of the Constitution; of the Regulatory Law of Section XIII Bis of Section B, and of Article 123 of the Political Constitution of the United Mexican States, regarding Labor Subcontracting ”, published in the DOF on April 23 of this year.

The authorization of the Council responds to the legislative process underway within Congress regarding the Initiative to reform the Decree on labor subcontracting, with the purpose of extending terms, published in the Senate Gazette LXIV / 3SPR-21/119360 of the Republic on July 21.

As far as IMSS is concerned, the 90 calendar days established in articles 5, 6 and 7 of the Decree on labor subcontracting are extended until it is approved and enters into force, by means of a new decree that the Federal Executive issue, for this purpose, the expansion proposed in said initiative or the one that the Congress of the Union finally decides to approve.
This decision makes it possible to safeguard the rights of workers and their families, as well as to support employers or obligated subjects in complying with their social security obligations.

Clic for consulting official publication.

26Jul

GIS invests US$30 million in San Luis Potosí

julio 26, 2021 Paulina Aguirre

GIS announces a US$30 million investment for the capacity expansion of its auto parts foundry at its Draxton business in San Luis Potosi to begin operations during the last quarter of 2022.

Draxton, dedicated to the casting and machining of critical auto parts for brake, engine and chassis systems for the global auto parts industry, has operations in six countries on three continents: Europe, Asia and in North America with plants strategically located in central and northern Mexico.

Through a statement, the company announced the construction and expansion of a new nodular iron smelting line at its San Luis Potosí production plant, which will allow it to increase its installed capacity by 30,000 tons per year to reach a global annual smelting capacity of close to 620,000 tons.

The new casting line will focus on the production of calipers and brackets, critical and safety-critical brake system parts that are 100% compatible with hybrid and electric vehicles, allowing Draxton to participate in the electrification of the global automotive industry.

“GIS’s financial strength allows us to finance this expansion of Draxton with our own resources and thus be ready to take advantage of the business opportunities presented by the USMCA agreement for the automotive industry,” said Jorge Rada, Chief Operating Officer of GIS.

GIS also reported that it refinanced the loan contracted for its Evercast foundry and machining business with a cost reduction and a term extension to 2026.

Source: MEXICONOW

15Jul

Creation of the National Customs Agency of Mexico

julio 15, 2021 Paulina Aguirre

On July 14, 2021, the “DECREE creating the National Customs Agency of Mexico (ANAM) as a decentralized administrative body of the Ministry of Finance and Public Credit was published in the Official Gazette of the Federation.”

ANAM will be the new tax and customs authority, in charge of organizing and directing customs and inspection services, to apply and ensure compliance with the legal provisions that regulate the entry and exit of goods from the national territory and the collection of taxes. and uses applicable to foreign trade operations.

In order to comply with the foregoing, ANAM will be endowed with technical, operational, administrative and management autonomy, and will have the following powers:

Collect the contributions and benefits applicable to foreign trade operations and their accessories in accordance with the applicable legislation and in accordance with the international treaties to which Mexico is a party.

Manage the registers of importers, importers of specific sectors and sectoral exporters;

Represent the interest of the Federation in fiscal and customs disputes, related to the entry, transit or exit of merchandise from or in the national territory;

Determine and settle the contributions and benefits applicable to foreign trade operations and their accessories;

Monitor and ensure due compliance with tax and customs provisions related to the entry, transit or exit of goods from or into the national territory and, where appropriate, exercise the powers of verification provided for in said provisions; Y

Direct customs and inspection services; carry out operations corresponding to the verification of the legal stay of goods in national territory and of goods in transport, including their verification of origin; seize or insure merchandise whose legal stay in the country is not proven and safeguard them as depositary.

It is important to mention that the aforementioned faculties are not the only ones that ANAM will have, however, they are the ones that we consider most relevant.

ANAM will be headed by a Holder, who will be freely appointed and removed by the President of the Republic, at the proposal of the Secretary of Finance and Public Credit.

Finally, it is important to mention that the Decree in question will enter into force as of the date on which the legal reforms that grant the jurisdiction that the Tax Administration Service currently has in tax and customs matters to ANAM begin.

Click here for the official publication in the Official Gazette of the Federation (DOF) for your consultation.

For more information about this release, please contact jfrocha@mexcentrix.com and / or paguirre@mexcentrix.com

This communication was created solely for disclosure purposes and, therefore, constitutes an opinion that may be used and / or quoted without our prior written authorization

08Ene

How to Start Manufacturing Operations in Mexico?

enero 8, 2021 Paulina Aguirre

One of the main challenges for foreign companies to establish in Mexico, is they think that some aspects can be done similarly to how it is done in their country of origin or assume it can be done in a specific way without consulting with the experts. This is where a shelter company in Mexico becomes very useful.

It is very important to note each country counts with different laws, regulations, and procedures. Therefore, starting and running operations in Mexico is not complicated, but it is different, and for this reason it is important to be informed beforehand, get help from the experts, and understand what and how it must be done.
Below you will find some main steps you must consider for starting manufacturing operations in Mexico.

1) Define your business model scheme

Standalone: The foreign company creates a new entity in Mexico, with total control of all operations including administrative functions, and with total independence from third parties.
Joint Venture: There is an equal partnership between a Mexican manufacturer and a foreign company. Within this model, the foreign company faces more risks and liabilities than a shelter business model and provides an immediate knowledge base and experience.
Shelter: A company is hired by another to manage all administrative and legal tasks, while the other company can focus on its core business. Through a shelter company in Mexico, there is no need to hire personnel for administrative functions. Shelter companies can facilitate the start operations without the need for an established and legal presence in the country, in a faster way and through a risk mitigation approach.
Contract manufacturing: A company is hired by another to produce goods or provide a service. Nevertheless, the company does not have full control and oversight of production and quality assurance. Contract manufacturing is not as common in Mexico as in other countries as Mexico materials manufacturers most of the time do not need help to approach the US markets, so there is less need in Mexico to partner with larger foreign investors.

There are different options in which a foreign company can operate in Mexico, depending on the business model that fits best their needs:

2) Company Incorporation, Permits, and Programs

Depending on the business model you choose, the company must proceed with obtaining the required registrations and permits. For example, in a standalone business scheme, the first step for the company is to incorporate a new entity in Mexico, and register it before the Public Registry of Commerce, Tax Authorities, and Social Security among other registrations. Or to obtain the Importers Registration, IMMEX Program, or any other program that applies. An experienced partner can support your company in determining which foreign trade incentive programs you can benefit from.

3) Site Selection

Once you have decided to establish in Mexico, the next step is to decide in which State. The main deciding factor for most companies is the location of their clients or suppliers. Other companies also take into account if they want to be in the north of Mexico right on the border with the United States or on the coast. Furthermore, the incentives received from the government can also be a deciding factor.

Afterward, you must decide between leasing or building in Mexico. Depending on the needs of your company you can decide to build a new facility from scratch, find a built–to–suit lease, or make a small improvement to an already existing building. The cost to lease industrial space in Mexico will vary highly on which region of Mexico, or if it is located in an industrial park, among other factors.

Leasing and buying costs in Mexico:

The cost to lease industrial space in Mexico can be as low as $0.40 USD per sq. ft. per month. And the cost to buy and industrial land in Mexico can be as low as $2.50 USD per square feet.

4) Recruiting and Training of Personnel

Recruiting the first employees is an important step. The recruiting process in each country is different, and in Mexico, it can be considered as a complex process. Therefore, looking for support from experts is always a good idea. An experienced shelter company in Mexico can speed up and facilitate the recruiting process, personnel ramp-up, and training for employees.

5) Building your supply chain in Mexico

Mexico counts with an important supply chain network for various industries, as it is home to different industry clusters. Therefore, it is important to establish with the material you will source locally and which from abroad, and make sure any new suppliers meet the company’s quality standards.

6) Start of Production

Once you have covered the above-mentioned steps, the logistics process has been planned, the equipment has been installed, the testing stage has been completed, it’s time to proceed with the start of production.

Is your business considering moving to Mexico? Mexcentrix can help you by facilitating the process through a smooth start and running of operations. Contact us!