What is Nearshoring?

Nearshoring is a business strategy where a company relocates or expands its manufacturing capabilities into a foreign country closer to the country where the current or parent company is located.

By these means,  manufacturing in a nearby country, the company can benefit by taking advantage of proximity or socio-economic or socio-political factors of a specific country.

According to El Economista based on the 2023 Kearney FDI Confidence Index, imports from Mexico into the US have grown at least 76% in the last decade, and have surpassed Asian countries as shown in the graph below:

Source:  El Economista (2023) México gana a países de Asia y a EU con nearshoring: Kearney obtained from: https://www.eleconomista.com.mx/empresas/Mexico-gana-a-paises-de-Asia-y-a-EU-con-nearshoring-Kearney-20230623-0003.html

Mexico Exports to the U.S.

The growth of imports into the US from Mexico is driven mainly by 3 factors:

1. U.S. companies already sourcing directly from China are decreasing.
2. Most of the products manufactured in Mexico that supply the U.S. market come from American or European companies that want to increase their capacity in Mexico and are looking to minimize supply chain risks by nearshoring.
3. Chinese investment in Mexico has increased and more Chinese companies are installing production facilities in Mexico, in order to take advantage of the USMCA and minimize the import duties into U.S.

Nearshoring to Mexico and the aerospace industry

The aerospace industry in Mexico has consolidated as a very important industry in the last years, as it is a very important sector which contributes significantly toward the overall growth of Mexican economy.

Mexico is the 14th largest aerospace supplier globally, and around 80% of the production of the aerospace industry in Mexico is exported to the U.S.

Currently there are over 350 aerospace companies located in Mexico, this number has increased in the last years and is expected to continue growing as companies see Mexico as an strategic location due to nearshoring.  According to Mordor Intelligence, the Aerospace Industry in Mexico is estimated at USD 9.72 billion in 2023, and is expected to reach USD 19.71 billion by 2028, growing at a CAGR of 15.18% FROM 2023 to 2028.

Aerospace manufacturing capabilities in Mexico range from engines to turbines, cargo doors, fuselages, landing gear assemblies, seats, and several other components that are now present in many airplanes used over the world.

Moreover, Mexico aerospace clusters are located mainly in 5 regions which include Baja California, Chihuahua, Sonora, Queretaro and Nuevo Leon.  Some of the main OEMs include Honeywell, Bombardier, Airbus and Beechcraft.

Main factors driving the aerospace industry

Some key benefits that Mexico can provide for foreign aerospace companies are:

• Proximity
• Time zone alignment with U.S
• Costs savings
• Beneficial trade conditions
• Low labor costs
• Growing market

Shelter services for Aerospace companies

The above-mentioned clusters and established supply chain in the aerospace industry, provide foreign aerospace companies the confidence that they can consider Mexico as a long-term strategy.

If your company has future plans to nearshore operations to Mexico, contact us for a free consultation.  Our more than 20 years of experience can help your company set manufacturing operations in Mexico successfully and in the shortest amount of time.

Mexcentrix can support you since a feasibility or cost model analysis, site selection, obtaining permits and licenses for operating in Mexico, recruiting of employees, among many other administrative tasks, which will simplify your operations in Mexico.

We become your strategic partner in every step of the process.

Nearshoring is becoming a popular word in conferences, summits, and other events, as it plays an important role in the reconfiguration and streamlining of supply chain processes worldwide and business expansion strategies, due to the importance of agility and flexibility in the current business environment.

What is Nearshoring?

Nearshoring is the strategy by which a company seeks to move part of its production to be closer to its final destination. Manufacturing companies are establishing their operations in Mexico mainly due to its proximity to the American market, looking to minimize risks, transport timing, and costs, among others. These initiatives are being driven by this trend among manufacturers in several industries, such as the automotive, aerospace, electronic equipment among others.

Nearshoring to Mexico: BENEFITS 

• Faster shipping: The geographical location of Mexico provides a substantial benefit over China, as an ocean freight can be moved from Mexico to U.S. in 48 hours and in truck it can take 24 hours or less. Compared to approximate 2 to 4 weeks of an ocean freight to the US.  The abovementioned also implies lower shipping costs.
• Supply chain optimization: Related to the above, Mexico´s 2,000-mile border with the US facilitates just in time delivery and supply chain optimization.
• Similar time zone and proximity: Another advantage of nearshoring to Mexico is that its similar time zone and proximity allows for more regular visits from management who wish to monitor the process or make modifications. Travel to Mexico does not necessitate extensive planning.
• Skilled labor at lower cost: The increased demand for labor in Mexico is one of the key advantages of nearshoring. In Mexico around 115,000 engineers and technicians graduate from university every year.
• Infrastructure: Transportation and Communications infrastructure have been upgraded to improve logistics for U.S. – Mexico border trade. Mexico has 76 international airports, more than 10 maritime ports and 27,000 kms of railway, which facilitate the flow of raw materials and final goods into the country and abroad.

Nearshoring to Mexico: CHALLENGES

There are numerous advantages to nearshoring to Mexico. However, there are certain difficulties in this process, ome of these challenges are:

• Insufficient available facilities, as FDI keeps increasing the availability of real state options in the main industrial cities has decreased.
• Increase cost in real state options.
• High levels of insecurity in some desirable locations
• The lack of availability of sufficient electricity in many states of Mexico, is an important challenge for companies with high power requirements to run operations in Mexico.

Overall, Mexico is considered and strategic location for nearshoring operations due to the several advantages it has to offer but it is also vital for government to develop favorable conditions in order to meet enough energy demand, maintain legal clarity, and promote safe conditions for foreign investors, as experts predict that nearshoring to Mexico will continue to grow in popularity.

Mexcentrix Shelter Services

If you are interested in Nearshoring to Mexico in Mexcentrix, we can help you by offering the necessary resources and knowledge.  Our Selter-Services offers full administrative and operational support including human resources, payroll, tax and accounting, foreign trade, among others. Through our shelter program, our clients can focus on what they do best (production, quality, materials) and let us take care of the rest.

For further information, please contact us. 

Doing Business in Mexico

Did you know that according to the 2023 Global Business Complexity Index, Mexico ranks as the 4th most complex country to do business in out of a total ranking of 78 countries worldwide.[1]

The level of complexity defined by the above mentioned Index lies in the amount of paperwork, requirements, permits and licenses, regulations, local laws, penalties, among others, that companies must comply with in order to properly start their operations. It also states there are still a lot of face-to-face requirements in place, which can present challenges for international businesses with senior directors residing elsewhere.

Furthermore, when planning to expand abroad it is very common to think that things must be done as in our country of origin or that processes are similar, the truth is that every country is different, and therefore it is important to count with the advice and support from local experts.

Certainly, with the support from local experts which understand local laws and regulations you can be certain to start your new business in Mexico with the right foot, being 100% compliant and avoiding problems in the future.

Mexico’s Shelter Services

Due to the above-mentioned in Mexico there are shelter service companies, whose primary task is to remove those administrative, legal, political, territorial, and cultural obstacles for foreign companies. While helping them start operation through a risk mitigation approach.

Shelter companies have existed in Mexico for more than 40 years and their importance lies in the fact that they are the best ally of a foreign company to start operations without delay and at a very affordable cost.

Moreover,  many foreign companies often ask if the shelter model cheaper than a stand alone. Even though the stand alone cost will depend on the nature of each business, what will be handled in-house,  staffing compensation levels, among others,it has been proved that for companies for up to 300 employees operating under the shelter model is cheaper, due to economies of scale. Additionally, the expertise offered by a shelter company cannot be duplicated through a stand alone.

Some of the services a shelter shelter company offers, include:

Learn more about the services Mexcentrix can offer you.

If you are a foreign company and you plan to start or grow your business in Mexico, remember that no company has within its organization, the talent and experience of other economic activities outside its core business.

Therefore, if your company is dedicated to manufacturing, focus on your core business and let yourself be guided by shelter services companies, in charge of giving you the best orientation and protection.

Mexcentrix Shelter Services

At Mexcentrix we offer a cost effective solution for you manufacturing and service operations in Mexico, whether you want to operate under a full shelter or only need help with specific tasks, we adapt to the needs of each client.

Basically,  can support you since the start-up phase including site selection, company incorporation, processing initial permits and licenses, cost model analysis among others.

If you are interested on learning more about the advantages of our shelter service, or have any questions regarding labor, fiscal or foreign trade topics in Mexico, get in touch with a Mexcentrix expert. 

[1] 2023 Global Business Complexity Index. TMF Group. P.20.

What is the Maquiladora Industry?

The Maquiladora and Export Service Industry Program (IMMEX) is an instrument which 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 the general import tax , VAT and countervailing duties.

How the Maquiladora Industry Program Started in Mexico.

The Maquiladora Program, also known as IMMEX (Industria Maquiladora de Servicios de Manufactura y Exportación), was introduced in Mexico in 1964. Its main objective was to incentivize foreign capital, generate employment, promote industrialization, and strengthen Mexico’s economy, particularly along the U.S. border.

Both Mexico and the United States ran the initiative, offering financial incentives to non-Mexican businesses to devote financial resources to Mexican labor and manufacturing.

At the start of the program, there were around 1,900 maquiladoras in Mexico employing 500,000 people.

The North American Free Trade Agreement, which was signed in 1995, accelerated the rise of maquiladora plants, more than tripling their numbers in a short period of time.  Currently up to April 2023, there are 6,164 IMMEX companies according to the Ministry of Economy (SNICE).

The IMMEX Program has Five Categories

• IMMEX Holding Company Program:

Applies when the manufacturing operations of a certified company called holding company and one or more controlled companies are integrated into the same program.

• IMMEX Industrial Program: 

Applies when an industrial process of elaboration of transformation of merchandise destined for export is carried out.

• IMMEX Services Program:

Applies when services are performed on export merchandise or export services are provided, solely for the development of activities that the Ministry of Economy determines

• IMMEX Shelter Program:

Applies when one or more foreign companies provide the technology and productive material, without operating the program directly.

• IMMEX Outsourcing Program:

Applies when are certified company that does not have facilities to carry out production processes, carries out manufacturing operations through third parties that it registers in its Program.

Benefits of the IMMEX Program

The main benefits of the Program include the following:

• Cash Flow Benefit: The IMMEX Program together with the VAT and IEPS Certification, represents one of the main benefits, which is not paying the value added tax (VAT, which corresponds to the 16% ) for the machinery and materials imported temporarily; this represents an important advantage in regard to cash flow.  
• Taxes Deferment: The IMMEX Program offers the ability to defer the general import tax on temporary imported goods and machinery.
• Savings : IMMEX companies have the ability to consolidate their import and export operations, reducing costs related to custom broker fees and paperwork burden.

IMMEX Program and the Shelter Model

If you are interested in operating in Mexico with an IMMEX Program, Mexcentrix can help you.  Through our shelter service model., you can operate under Mexcentrix IMMEX Program, without the need of having your own legal entity in Mexico and taking advantage of all the benefits of the IMMEX Program right away. ‘

One of the main advantages of partnering with a shelter company is timing, as having to incorporate a new company and obtaining the IMMEX Program and VAT and IEPS Certification is a long and complex process.

Furthermore, the benefits above mentioned come with strict requirements and compliance regulations, in which guidance from experts such as a shelter company are important, to avoid your program being cancelled in the future or incurring in big fines.

Additionally, the advantages of the IMMEX Program are maximized when working with a shelter partner like Mexcentrix, as we ensure your company is complying 100% with the program obligations and Mexican laws and regulations and making sure  everything runs smoothly.

Looking to Start a Manufacturing Operation in Mexico as a Maquiladora ?  

Contact us for more information on Mexcentrix´s shelter program. We take care of complying with all requirements of the IMMEX Program.

In 2020 we experienced one of the greatest challenges in the world economy, the COVID – 19 pandemic, which brought big challenges to the entire global value chain, and Mexico was no exception.

The response from the manufacturing industry was immediate, many transnational companies that had their production in China, began moving operations to the American continent to avoid interruptions in their supply chain, as well as to reduce their dependence on overseas industrial zones, highly affected by the pandemic.

Nearshoring

It´s in this context, Mexico reappears on the international scene as an ideal destination for north American companies considering to nearshore their operations. Mexico was already an ideal destination due to its 13 free trade agreements signed with 50 countries, including the USMCA, low labor costs and its availability of qualified labor. While its proximity to the U.S. provides flexibility and simplifies many of the logistical challenges in reaching one of the world’s largest markets.

Furthermore, nearshoring has become the leading force and solution for supply chain disruptions in the post-covid era. By moving manufacturing to a low-cost country closer to corporate headquarters, companies can take advantage of the benefits of offshoring while reducing risk and simplifying supply chain management.

In addition to the already established and developed clusters in Mexico, such as the automotive industry, which clusters have a presence in almost every state in Mexico. Companies searching to establish operation in Mexico can benefit from the robust supply chain networks.

Mexico’s supply chain strengths:

Some of Mexico’s supply chain strengths include:

• Shorter shipping time. Due to the proximity to the US you will find shorter shipping times, which can result in fewer interruptions in the supply chain. Furthermore the communication between customer-supplier is in real time since the reduced time zone difference, which improves decision making process and efficiency.

• Reduced shipping costs. Overseas shipping has become more complicated and expensive. As above mentioned, the proximity to US offers a big opportunity in logistics costs reductions. For example, compared to China due to Mexico´s geographic location it represents approximately 75% less shipping times and costs. In addition to the fact that there are more types of transportation to choose from than shipping overseas.

• Less disruption in the supply chain. Again, taking advantage of the proximity to US, means the supply chain is shorter which reduces risks of problems and interruptions, such as delays.

Moreover, some years ago many companies based their strategic decision of expanding abroad based on a cost- driven approach. Due to some lessons learned from the pandemic among other situations, such as global container shortages and increase in prices, disruptions in the supply chain, companies are now basing their expansion strategies in minimizing risks and simplifying their supply chain.

Based on the above, manufacturing companies with target markets in the United States, by nearshoring the supply chain poses much fewer risks compared to those that extend overseas.

What’s next?

If you are looking to learn about the advantages that the Mexican market offers for your industry and take advantage of Mexico’s Supply Chain Strengths , you can contact Mexcentrix, we provide strategic guidance and shared business services for manufacturing companies in Mexico.  We can get your company up and running in as few a 2 to 3 months.

Contact us for more information.

Do you know how was the IMMEX Program established?

In the mid-sixties, after the end of the bracero program, the maquiladora industry develops in Mexico.

In 1965 the Promotion Policy of the Maquiladora Export Industry came into force. With this, the Federal Government supported industrialization on Mexico’s northern border, as it led to a increase in foreign direct investment, primarily of the manufacturing industry.

In 2006 the Decree for the Promotion of the Manufacturing, Maquiladora and Export Services Industry (IMMEX) became effective. It can be thought of as an update of the promotion policy.

What is the IMMEX Program ?

Immex stands for the Maquiladora, Manufacturing and Export Services Industry.  The IMMEX authorization is an instrument which 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.

The goods are classified as  the following: 

Objective of the IMMEX Program

The IMMEX program in Mexico was created to achieve the following goals in addition to enabling foreign businesses to export their goods to the nation and supporting its manufacturing sector:

• Strenghten national exports
• Give business operations consistency, transparency, and assurance.
• Offer new international operating models that lower logistical and administrative expenses.
• Modernize, simplify, and cut back on processes to increase inspection capacity in an atmosphere that promotes attracting and keeping investments in Mexico.

According to data from the Ministry of Economy, currently there up to February 2023, there were over 6,130 IMMEX companies in Mexico, located in the following regions:

The number of IMMEX programs has increased year by year due to an increase on foreign direct investment (FDI) of manufacturing and service companies in Mexico, and to the different benefits it has to offer to foreign and national companies.

How can your company benefit from the IMMEX Program

• Cash flow benefit

The IMMEX Program together with the VAT and IEPS Certification, represents one of the main benefits, which is not paying the value added tax (VAT) for the machinery and materials imported temporarily; this represents an important advantage in regard to cash flow.  

• Taxes Deferment

Another main benefit is the ability to defer the general import tax on temporary imported goods and machinery.

• Savings

Furthermore, IMMEX companies have the ability to consolidate their import and export operations, reducing costs related to custom broker fees and paperwork burden.

Is your company looking to obtain the IMMEX Program?

The application of the IMMEX program is a complex process and contains several requirements that need to be fulfilled and carried out by companies or consultors with experience in this matter. Furthermore, to maintain the IMMEX program the company must comply with several reporting requirements sucha as:

• Submit an annual electronic report of total sales and exports for the immediately preceding tax year.
• Submit INEGI report
• Maintaining an automated inventory control (Annex 24).
• Among many other obligations.

Therefore, many foreign companies, work with experienced partners such as a shelter service provider in Mexico, like Mexcentrix, in which you can start operations under a shelter company which already counts with an IMMEX Program and with experience in fulfilling the program obligations.

By starting operations under a Shelter company, you can have direct access to the benefits of the program. More and more manufacturers are choosing the shelter model, due to the time required to obtain the IMMEX program, which  can take three to six months, occasionally even longer; resulting in quicker start up times.

Contact us for a free consultation on the IMMEX Program today and learn about the best option for your company.

There are different models a foreign company can operate in Mexico, such as a stand alone operation, joint venture, shelter and contract manufacturing. While each model has its advantages and disadvantages, the shelter model is one of the most used by foreign companies, as it allows you to minimize risks and liabilities while maximizing productivity and allowing you to start operations easily and as fast as possible.  

 What is a shelter company ?

A shelter company is a service provider that enables a foreign corporation to operate in Mexico, reducing their risk, liabilities and financial exposure associated with entering into Mexico directly.  

As the shelter company acts as the legal entity of record in Mexico for all compliance-related matters. Also, the foreign company is exempt from permanent establishment in Mexico and can get immediate access to the IMMEX Program, VAT and IEPS Certification among other certifications.  

Who can use a shelter company in Mexico?

Small and large companies within the manufacturing and services sector, who are looking to start operation in Mexico through a risk mitigation approach.

Additionally, the Shelter program allows companies to do business in Mexico without having to officially register or incorporate a legal entity in the country.

Main administrative functions which a shelter company takes care of.

Shelter companies in Mexico, can support to the foreign companies in important administrative business tasks such as:

Advantages of using a shelter service provider.

• Quick Start-up

Working with a shelter supplier can remove many of the common barriers to starting a business. For example, in Mexcentrix we count with qualified personnel and expertise to get your operations up and running in as few as 30 business days.

In addition, shelter companies, count with up-to-date information on labor availability, industrial facilities availability and opportunities, potential risks that could impact your operations among others.

Lastly, a shelter company already counts with IMMEX Program and VAT and IEPS certification. This can drastically reduce the time it takes to obtain permits, and the resulting cash flow impact is far less than if you started from scratch.

• Cost Reduction

Shelter companies provide the same services to multiple companies, the resulting economies of scale reduce the cost of the services passed on to their customers.

In addition to being able to benefit from tax incentives programs such as PROSEC, Rule 8^th,  IMMEX Program and VAT and IEPS Certification.

• Experienced personnel

A shelter company allow you to have access to a team full of experienced professionals since day one. In addition to having access to local data and information regarding your industry, labor costs and availability, and recommendations based on years of experience with various industries.

• Scalability

Furthermore, as the company operations grow, increasing its production capacity and foreign trade operations, the shelter company will respond with additional staff for carrying out operations efficiently, as well as provide you with options on real state opportunities, suppliers among others.

The shelter company is also in charge of making sure all positions required by the client for the growth/ expansion are covered effectively and in a timely manner.

• Compliance

Additionally, shelter company can ensure you are being 100% compliance with Mexican laws and regulations.

Different types of shelter companies in Mexico.

• Pick and Choose Shelter Services: Companies that do not only offer a full shelter , but a list of services to choose from based on your needs.
• Full Shelter Service: These companies do not own the property or offer its own real state solution, but provide full administrative services such as: HR, tax and accounting, foreign trade, among others. 
• Real Estate Companies that Offer Shelter Services–  Companies who own the properties they offer to their clients together with the shelter services. In some cases, it is mandatory you rent or buy one of their properties in order to be able to receive their administrative services.
• Contract Manufacturing with Shelter Services– Are typically subcontracted manufacturing services for a specific project that can also provide additional shelter services, or companies who offer both shelter services and contract manufacturing independently.

Mexcentrix offers full shelter services and pick and choose shelter services.

We adapt to the specific needs of each client and are flexible in regards to the services you can choose from our complete service catalogue.

Looking to start operations in Mexico ? 

Contact us  for more information on the shelter model.  Reduce costs and risks with Mexcentrix’s shelter services.

Labor Reform and the increase of workers vacations

On December 14^th 2022, the Senate approved the Labor Reform bill of articles 76 and 78 of the Federal Labor Law, to increase workers vacations from 6 to 12 days the annual paid vacation period for Mexican workers, which reforms became effective on January 1^st, 2023.

Among the main reasons that led to the discussion and approval of this reform were the following:

• Recent OECD studies indicated that Mexico is one of the countries with the highest number of working hours in the world (2,124 hours per year).
• According to El Financiero, WHO (World Health Organization) statistics indicated that Mexico has a 75% prevalence of stress in its labor force, placing it above countries such as China with 73% and the United States with 59%.
• In terms of comparative labor policy, the working groups of the bicameral labor commissions had access to studies that revealed Mexico as one of the countries with the fewest vacation days in the world.

Based on the abovementioned reform, a Mexican employee who completes one year in his job will be entitled to 12 days of vacation.

After the second year of service, two days of vacation will be increased to 20 days, and after the sixth year of service, the vacation period will be increased by two days for every five years of service, as shown in the following table:

Benefits of the Labor Reform in manufacturing companies:

The increase of workers vacations, is expected to have a positive impact in the manufacturing industry and other industries, due to the following reasons:

1. It has been demonstrated that an increase in workers’ benefits contributes to improving their quality of life, which has a positive impact on the development of their activities and, therefore, on the productivity of companies.
2. It will favor labor stability, since work stress, overwork and lack of rest lead to greater labor desertion.
3. Companies will be able to enjoy a better organizational climate, because the increase in vacation days improves satisfaction with the employer, as well as helps to have more committed employees with the company and thus promotes a healthy working relationship in reciprocity.

Recommendations for employers due to the increase of workers vacations

All employer must make sure to make any appropriate changes in order to make sure they are complying with the reform.

It is recommended for employers to:

• Ensure compliance and update applicable vacation days, review collective bargaining agreements and individual employment contracts.
• Perform a seniority analysis of their staff and determine the number of vacation days each employee is eligible for based on seniority at the time the reform decree was published.
• Consider that any terminations carried out after January 1, 2023, should include new accrued vacation premium payments.
• Revise digital vacation request systems to ensure the vacation-day allotment increase is reflected on each employee’s respective account.

In addition, it is important to take into account  that the increase in vacation days will also impact the payment of the vacation premium. As you know, the vacation premium should not be less than 25% of the salary that corresponds to the vacation days.

Also, under the Social Security Law, it will integrate the base salary for the purpose of payment of dues to the IMSS, SAR and INFONAVIT.

Lastly, given that it is a payment derived from the employment relationship, it will also have an impact on local payroll taxes.

Compliance with Labor Law

As before mentioned employers need to make sure they are complying with the Labor Law including all of its reforms. If you need assistance, Mexcentrix counts with experts on this area. Through our payroll processing service and human resources service we can help you company comply fully with Mexican regulations.

Contact us to learn more about our services.

The COVID-19 pandemic has changed the perspectives of many US manufacturing companies regarding the location of their production facilities. Many of them depended on China, due to its cost advantages, nevertheless as the pandemic highly disrupted supply chains, logistics costs, among others, forcing companies to further broaden their horizons and think about other locations. Consequently, companies have considered moving manufacturing operations from China to Mexico.

In addition that labor costs in China have been rising steadily in recent yerd, which manufacturing labor cost per hour are currently approximate 35% higher than in Mexico, as according to the International Labor Organization, wages in China doubled from 2008 to 2019 and have continued to increase,  the  trade war between China and United States, which has complicated cooperation between the two countries, intellectual property problems, among others, which lead to companies adopt a reshoring strategy from China to other countries, including Mexico.

Why are companies considering moving operations from China to Mexico?

Mexico´s manufacturing industry has benefited and grown as a result of recent nearshoring initiatives.  It has been considered an attractive destination when considering moving operations from China, due to the following advantages: the entry into force of the USMCA which provides greater stability to trade relations between Mexico and the United States, in addition to the 13 free trade agreement with 50 countries.  Among other advantages detailed below which promote competitive manufacturing and stimulates job creation.

Advantages of Operating in Mexico

There are several advantages that have lead companies to move manufacturing operations from China to Mexico.

Cost and time savings

Mexico offer reduced logistics costs and time saving for delivering of raw materials or final produced, compared to increased logistics costs from China. In which due to Mexico’s geographic location it represents approximately 80% less in shipping times and costs, compared to China.

Workforce

 Mexico offers highly trained workforce and competitive labor costs. Mexico has a large working-age population, giving the country excellent human capital advantages. Every year 120,000 engineering students graduate from Mexican universities and schools.

Location

Mexico is much closer to the U.S. and Canada than China. This easily allows for less potential problems in the supply chain, quicker shipping times and  makes it easier and cheaper for U.S. and Canadian companies to send key personnel down to Mexico in case that requires a quick, in-person response.

Infrastructure

Mexico has a very good logistics network, with more than 117 seaports, 64 international airports and 27,000 km of railways. All these pros attract the attention not only of US companies, but also Asian companies that now want to be closer to the US market.

No restrictions on foreign ownership

Additionally, compared to other countries, Mexico does not have restrictions on foreign ownership in the manufacturing industries. Furthermore, the government promotes foreign investment by providing incentives to foreign companies such as de IMMEX Program, PROSEC, Rule 8^th (Regla Octava) among others.

Are you looking to move manufacturing operations from China to Mexico ?

If you are looking to take advantage of the benefits Mexico offer for manufacturing companies, Mexcentrix can lead and support you in the complete process for establishing manufacturing operations in Mexico. Our shelter service offers full administrative and operational support including human resources, payroll, tax and accounting, foreign trade, customs, management IMMEX Program among others. Through our shelter program, our clients can focus on what they do best (production, quality, materials) and let us do what we do best.

Furthermore, if you would like to know how much it will cost you to operate in Mexico, contact us for a free cost model analysis.