Everything you Need to Know about Shelter Services in Mexico

If you're an international manufacturer exploring opportunities in Mexico, you've likely come across the term "shelter services." A shelter program can provide you with a streamlined and cost-effective entry into the Mexican market while minimizing risks and complexities.

What are Shelter Services in Mexico?

Shelter services allow foreign manufacturers to operate in Mexico under a shelter company's legal framework. Under the shelter model, the shelter service provider takes on the legal, administrative, and regulatory burdens. This arrangement enables companies to focus on production while the shelter provider manages administrative and compliance tasks.

Key Benefits:

• Quick Market Entry: Accelerate setup and reduce time to market.
• Regulatory Compliance: Ensure adherence to Mexican laws and regulations.
• Cost Efficiency: Lower operational costs by leveraging existing infrastructure.
• Risk Mitigation: Avoid potential liabilities associated with direct foreign operations.

Shelter service providers work especially well for industries like automotive, electronics, aerospace, and medical devices, where manufacturing often involves complex supply chains and tight regulatory requirements.

The Shelter IMMEX Program

One of the most attractive features of shelter services in Mexico is their integration with the IMMEX (Maquiladora, Manufacturing, and Export Services) Program. The IMMEX program is a governmental initiative that allows manufacturers to import raw materials and components into Mexico under a duty-deferral process. These facilities are often called “maquiladoras”. Shelter service providers often manage the IMMEX program compliance on behalf of the manufacturer.

Advantages of Shelter IMMEX:

• Import Tax Advantages: Under full compliance of the program, manufacturers import materials and equipment into Mexico with tax and duty advantages. 
• Simplified Customs Process: Shelter service provider assists with import/export documentation, ensuring compliance with Mexican and international trade regulations.
• VAT Exemptions: Companies operating under the IMMEX program can benefit from exemptions or deductions in the value-added tax, or other fiscal incentives.

It’s important to note that to maintain these benefits, manufacturers must comply with specific requirements, such as exporting the finished product or unused material within a designated timeframe, and adhering to reporting and inventory control measures.

Types of Shelter Services in Mexico

Shelter services in Mexico can be broadly categorized into two types, each offering distinct benefits depending on the specific needs of the company.

1. Multitenant Shelter

In this model, multiple companies share the same legal entity, along with its IMMEX permit and operating license. In some cases, they even share a facility and resources managed by the shelter provider. This approach offers speed of implementation by tapping into pre-existing IMMEX permit and licenses.

2. Dedicated Shelter

Here, the shelter provider manages a dedicated legal entity for each client. This model offers greater control and visibility of the operating costs, and allows for an easy transition to become an independent operation. The dedicated shelter model also provides more flexibility for the optimal location within Mexico, according to the specific business plan.

Typical Services Provided by Shelter Companies

Shelter service providers offer a comprehensive suite of services to support foreign manufacturers, including:

• Human Resources Management: Recruitment, hiring, and management of local workforce.
• Payroll and Benefits Administration: Handling employee compensation and benefits in compliance with Mexican labor laws.
• Accounting and Tax Compliance: Managing financial records, tax filings, and adherence to fiscal regulations.
• Import/Export Management: Overseeing logistics related to the movement of goods across borders, including customs documentation and compliance with trade regulations.
• Environmental and Safety Compliance: Ensuring operations meet environmental regulations and occupational health and safety standards.

Selecting the Right Shelter Service Provider

When choosing a shelter service provider in Mexico, consider the following factors:

• Experience and Track Record: Look for providers with a proven history of successful partnerships.
• Service Portfolio: Ensure they offer the specific services your operation requires.
• Compliance Expertise: Verify their knowledge of the latest regulatory changes and compliance requirements.
• Cultural and Language Proficiency: Assess their ability to navigate cultural nuances and language differences effectively.

Partnering with the right shelter service provider can significantly enhance your manufacturing operations in Mexico, providing a solid foundation for success in the global market.