Manufacturing in Mexico: Shelter Operations. An interview between Queretaro’s Aerocluster and Prodensa.
Manufacturing in Mexico: How Shelter Services Simplify Expansion
Foreign manufacturers exploring expansion opportunities have several pathways when setting up manufacturing operations in Mexico. Among them, shelter services in Mexico stand out as one of the smoothest, safest, and most competitive structures, particularly for high-value sectors like aerospace, automotive, electronics, and medical devices.
Many aerospace companies expanding into Mexico have successfully leveraged shelter services to establish efficient and compliant operations with minimized risk and faster time-to-market.
In collaboration with the Aerocluster of Queretaro, we conducted an in-depth interview featuring Mr. Antonio González (Director of the Aerocluster) and our experts Carlos Loyola and Ricardo Martinez from Prodensa's Business Development team. Together, we explored why so many Aerocluster members rely on shelter services, the different shelter modalities available, recent regulatory updates affecting shelter operations, and strategic recommendations for companies already operating in Mexico.
What Are Shelter Services in Mexico?
Shelter services allow foreign companies to operate manufacturing in Mexico without establishing a wholly-owned Mexican entity. Instead, companies operate under the legal framework of a specialized Mexican service provider—commonly known as the "Shelter"—who assumes administrative, legal, and compliance responsibilities.
This structure is particularly attractive to manufacturers that wish to:
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Minimize operational and legal risks.
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Accelerate time-to-market.
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Optimize setup costs and complexity.
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Focus solely on production, R&D, and quality control.
Under this model, the parent company treats its Mexican operation as a cost center, while the Shelter manages everything from HR and tax compliance to environmental permitting and customs processes.
Explore more in "Everything you Need to Know About Shelter Services"
Modalities of Shelter Operations
When choosing how to manufacture in Mexico with a partner, companies typically select between two main shelter modalities:
1. Multitenant Shelter Model
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Multiple companies operate under a single Mexican legal entity managed by the Shelter provider.
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Fastest path to entry: the entity is already established and operating.
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Risk consideration: compliance breaches by one tenant could impact all other tenants within the entity.
2. Dedicated Shelter Model
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A newly created Mexican entity dedicated exclusively to one client.
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Higher control: full ownership of compliance and operational integrity under the customized structure.
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Ideal for companies with larger-scale investments or sensitive products (e.g., aerospace components, medical devices).
Choosing between these options depends on factors such as investment scale, risk tolerance, and long-term operational strategy.
Explore more in "Types of Shelter Services in Mexico: An Overview"
Recent Regulatory Changes Impacting Shelter Services in Mexico
Key Changes to Understand
In recent years, Mexico has introduced major regulatory reforms impacting shelter services in Mexico and companies expanding their manufacturing in Mexico, particularly through the 2022 tax reform. These changes have reshaped the fiscal environment and operational requirements for shelter operations.
Key changes include:
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Safe Harbor as the Sole Tax Method:
The APA option was eliminated, and all new shelter operations must now calculate taxable income based on Safe Harbor rules—either 6.9% of assets or 6.5% of costs, whichever is higher. -
Indefinite Shelter Operations:
The previous four-year limit on operating under a shelter model was removed in 2020, allowing indefinite use if aligned with business strategy. -
Loss of Foreign Tax Creditability:
Shelter companies are no longer considered related parties, meaning taxes paid in Mexico cannot be credited abroad. -
Increased Compliance Requirements:
Companies must file the DIEMSE report annually and ensure non-maquila revenues remain under 10% of total maquila revenues. -
Greater Transfer Pricing Scrutiny:
With APA flexibility eliminated, tax authorities are placing stricter oversight on inter-company transactions.
Dive deeper into "Recent Changes in Shelter [2025]"
Strategic Implications for Companies Pursuing Manufacturing in Mexico
These regulatory shifts mean that companies considering manufacturing in Mexico under a shelter model must reassess the financial and operational implications:
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Higher Taxable Profits: The mandated minimum profitability under Safe Harbor can increase effective tax rates, particularly for capital-intensive operations.
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Loss of Tailored Tax Planning: Without APA availability, companies lose the ability to negotiate customized transfer pricing agreements.
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Need for Proactive Transition Planning: Companies may need to transition to wholly-owned maquiladora structures or alternative operational models to optimize costs and maintain competitiveness.
Why It Matters: Rethinking Your Shelter Strategy
While shelter services in Mexico remain an attractive entry point for manufacturers, the model has evolved from being a primarily tax-advantaged structure to a more strategic operational tool. Companies must now carefully weigh:
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The cost-benefit of continuing under a Shelter versus setting up a stand-alone maquiladora or using other models such as contract manufacturing or toll manufacturing.
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The tax and operational impact of Safe Harbor minimums.
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The long-term flexibility of their Mexico operations.
Having a strong Exit Strategy has become more important than ever to ensure operational continuity and fiscal sustainability. Proactive companies are conducting cost-benefit analyses, assessing compliance readiness, and exploring alternative operational structures to stay competitive.
Considering restructuring your manufacturing operations in Mexico?
The right strategy could significantly optimize your taxes and improve your operational flexibility. Contact our team at Prodensa for a customized analysis tailored to your business needs.
Watch the full interview:
About Prodensa:
Prodensa is a professional services firm with 40 years of experience and has supported more than 1,000 manufacturing companies with Startup or Shelter solutions in Mexico. From start up and shelter operations to consulting and advisory insights, market intelligence, and execution of complex projects across the world, we offer the right mix of team experts, know-how, and local skills to solve even the most demanding tasks.
Contact us to assist you and find the best solution for your new or existing manufacturing project in Mexico.