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.