There are a number of reasons why many types of companies are expanding to Mexico and are establishing manufacturing operations in the country. Working with a shelter company in Mexico can effectively reduce the costs and risks associated with market entry.
The new United States-Mexico-Canada (USMCA) Free Trade Agreement undoubtedly is and will continue to be a determining factor that motivate companies to establish production facilities in Mexico. The ability to produce goods and export them from factories in Mexico, free of tariffs and duties, is a great advantage for companies seeking to do business internationally. Under Mexico’s IMMEX program, they are granted the freedom to import materials, machinery, and other necessary items that are used in their manufacturing processes without incurring financial charges and liabilities.
There is also the additional benefit of leveraging a highly skilled and qualified workforce that has been developed by Mexico over the last several decades. Although it is rapidly becoming the ideal destination for business relocation, the country has always had an important manufacturing infrastructure that has been established mainly by foreign organizations. Most of these have come from the United States.
Now, Mexico has a large number of workers with technological know-how and mechanical skill sets. Companies that choose to manufacture in Mexico can be sure that the items produced in the country will always be of the highest quality. This is the case with the added advantage of being produced at a fraction of the cost of similar production executed in the United States.
The advantages of relocating production to Mexico are many. Still, many manufacturing organizations seeking to establish an operational presence in the country may not be sure how to get started. In this context, working with a shelter company in Mexico may be the best path to choose.
There are certain protocols that must be followed before a foreign company can establish manufacturing operations in Mexico and the guidance and services provided by a shelter company can help to ease entry into the market.
Tips for doing business in Mexico
International Business Times listed a number of best practices that companies wishing to establish manufacturing operations in Mexico are advised to follow. Key points include the fact that Mexicans prefer to first establish a personal relationship then enter into a business relationship.
This means that often decision makers or other leaders within an organization must make multiple trips to Mexico to develop relationships with those who have the authority to grant a company permission to do business in the country. However, once this obstacle has been overcome, a company will have to decide on the business model that it will use to achieve its manufacturing objectives. There are several different ways for an organization to establish production operations in Mexico.
The easiest way is working with a Shelter company. These are organizations that have an in-depth knowledge of Mexican business legislation, logistics and labor laws and standards. Essentially, shelter organizations have already established a genuine and working relationship with government officials, as well. Partnering with them makes sense in many different ways.
Shelter companies also provide recruitment and job training, facilitating the import of raw materials used in the manufacture and export of finished products outside the country. These organizations also handle payroll and handle any tax-related issues that may arise.
Simply from a business perspective, any foreign organization that wants to get involved in offshoring could do so by working with a shelter company in Mexico. This reliable business partner of this sort makes the process much smoother and more efficient than an organization trying to go through the process with out the benefit of having such assistance.
Certainly, there are other options available that manufacturers can consider, and each offers its own pros and cons. However, there are certain rules and regulations that must be followed before business can be done in any scenario. If what a foreign company is looking for is a simple and agile process, then working with a Shelter company in Mexico offers the best and most effective path forward.