Preferential Tariffs, Lower Income Taxes: Benefits of IMMEXBy Alfonso Núñez | Fri, 01/14/2022 - 11:35
Mexico’s Manufacturing Industry and Maquiladora and Export Industry (IMMEX) offers numerous advantages to foreign companies, America Pineda, Global Trade Compliance Manager at Intermex Industrial Parks, told Global Auto Industry. These advantages include avoiding payment of duties through the use of preferential tariff treatments and lower income taxes following the safe harbor methodology.
IMMEX allows for the temporary importation of goods by foreign companies looking to establish production in Mexico for export without having to pay the general import tax, value added tax and even countervailing duties. “Securing the IMMEX program is one of the key conditions to avoid a permanent establishment for income tax purposes for the foreign residents that contract the Maquildora service… it is important because the IMMEX program has some specific duty and VAT services,” Pineda said.
Through maquiladora services, Mexican companies can provide manufacturing or assembly services to foreign entities. The program has been particularly instrumental in the expansion of the automotive industry since the signing of its earlier form, the PITEX program, in 1990. PITEX allowed foreign-owned companies to sell most if their production in Mexico. By 2006, 48.7 percent of exports under the program were auto-related manufacturers.
Although IMMEX was established in 2006, IMMEX can still be hard to navigate for newcomers. For them, Pineda offers information regarding entry into the program and additional insider advice. Requirements to qualify for IMMEX include signing a lease agreement for the manufacture of goods in Mexico, an exports minimum of US$500,000 or 10 percent of annual sales and a detailed process from entrance to Mexico to final destination.
Through virtual customs transactions companies have evolved to integrate vertical supply chain operations, allowing for the transport of goods in IMMEX a round trip abroad, according to Pineda. She also believes suppliers should consider an authorized economic operator certification, which reduces customs inspections at border crossings.
To accelerate the entire process, Pineda recommends suppliers use a shelter company, which would already have IMMEX and VAT certifications and would handle all government interactions. The shelter can later aid them in becoming independent from the IMMEX program.
For companies looking to start operations in Mexico, Pineda recommends contacting a shelter to analyze the possible options and what is best for each company.