Mexico is an attractive destination for transnational companies, mainly from the manufacturing industry. As a matter of fact, Mexico is the world´s fourteenth largest FDI recipient.
The above due to the different advantages Mexico offers, among others: strategic geographical position, highly qualified and low cost labor force, its free trade agreements, and its incentive programs, such as the IMMEX program, formally known as the IMMEX Maquiladora Program, which enables foreign companies to operate in Mexico under a preferential tax structure.
What is IMMEX?
Immex stands for the Maquiladora, Manufacturing and Export Services Industry.
Its objective is to strengthen national exports, and to provide companies with tools to adopt new forms of operation and making business, modernize and reduce processes, all in an environment that encourages the attraction and retention of investments in the country.
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.
One of the main requirements for the IMMEX program is to have annual sales abroad of at least USD $500,000, or invoice exports accounting for at least 10 percent of the total company invoices.
Benefits of the IMMEX Program
The main benefit of the IMMEX Program is they can temporary import of raw materials, components, machinery and equipment among others without paying VAT and countervailing duties and deferring or not paying General Import Tax.
Nevertheless, within a fixed timeframe, the finished manufactured good must be exported, transferred to another IMMEX program, or proceed with a change of regime.
The timeframe in which the temporary imported materials may remain in national territory, according to article 4 of the IMMEX Decree and Article 108 of Customs Law is as follows:
- 6 months:
- The goods subject to transfer by means of virtual operations, will have a period of permanence of up to six months.
- 18 months:
- Fuels, lubricants and other materials that are going to be consumed during the production process of the export merchandise.
- Raw materials, parts and components that are going to be used entirely to integrate export merchandise.
- Bottles and packages.
- Labels and brochures.
- 2 years:
- Container and trailer boxes
- For the validity of the program
- Machinery, equipment, tools, instruments, molds and spare parts for the production process.
- Equipment and devices for pollution control, research and others mentioned in article 108 of the Customs Law.
- Equipment for administrative development.
Categories of IMMEX program
There are 5 different types of IMMEX registrations:
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.
How to take advantage of the benefits of the IMMEX program in Mexico
The application of the IMMEX program is a complex process and contains several requirements that need to be fulfilled. Furthermore, to maintain the IMMEX program the company must comply with several reporting requirements among many other obligations such as maintaining an automated inventory control (Annex 24), maintain the goods at the addresses that are registered in the program, among others. Therefore, many foreign companies, partner with experienced partners such as a shelter service provider, like Mexcentrix, for a quicker and correct access to the benefits of the IMMEX Program.
Mexcentrix can support your company in the full process since the application of the IMMEX program and management of it, including filing required reports and fulfilling all obligations.
Contact us for a free consultation on the IMMEX Program today and learn about the best option for your company.