IMMEX Program: A closer look at how foreign companies can benefit from Mexico
What is the IMMEX Program?
The IMMEX Program in Mexico is an instrument that has been put into place to promote exports. It can be used by companies that import goods temporarily and carry out an industrial or service process that manufactures, transforms or repairs, and/or provides export services. Using this program enables IMMEX licensees to defer the payment of the general import taxes, the value-added tax, and, if applicable, any countervailing duties that may be applicable.
The legal framework of the IMMEX Program in Mexico
The IMMEX program is based on the Decree for the promotion of the manufacturing, maquiladora, and export services industry. This statute was published in the Official Gazette of the Federation on November 1, 2006. Subsequent reforms to the original Decree were published on May 16 and May 24, 2008, and in December of 2010.
Its legal framework includes:
- The Customs Law and its Regulations
- The Tax Code of the Federation
- The Federal Law of Administrative Procedure
- The Agreement by which the Ministry of Economy issues general rules and criteria on Foreign Trade
- The General Rules on Foreign Trade Matters of the SAT for 2013
- The Agreement by which the procedures registered in the Federal Registry of Procedures and Services apply to the Ministry of Economy and the sector’s decentralized organizations and decentralized bodies are disclosed.
- The Decree granting administrative facilities in customs matters and foreign trade.
The benefits of using the IMMEX Program
The IMMEX Program in Mexico offers its licensees the ability to enter items into the country free of import taxes and (value-added-tax) VAT temporarily. These items include goods necessary to be used in an industrial or service process for the production, transformation, or repair of temporarily imported merchandise of foreign origin for export or the provision of export services. The IMMEX program is used by export-oriented manufacturers of medical devices, aerospace components, automotive parts, and vehicles, as well as other general manufacturing industries.
IMMEX eligible goods can be grouped into the following categories:
Raw materials, parts, and components will be integrated into the manufacture of goods that are made for export; fuels, products used for lubrication, and a variety of other materials that are utilized during the manufacturing processes of exportable goods mentioned above. This may be comprised of goods such as boxes, pallets, packaging materials, labels and informational brochures, and containers used in shipping operations.
Machinery, equipment, tools, instruments, molds, and spare parts to be used the processes that engage in the making of goods; pollution control equipment apparatus related to the control thereof; items used in training and research, products for industrial safety, telecom., and equipment used in computing; laboratories supplies, as well as those used for product testing, measurement, and the control of quality; as well as the material handling equipment that is used in a manner that is directly related to export trade and others connected to the manufacturing process; Lastly, equipment used in administrative procedures and processes is eligible to receive benefits under the IMMEX program in Mexico.
Who is eligible to participate in the IMMEX program?
Producers that are legal entities residing in Mexican national territory and/or export service providers. Companies in the IMMEX program in Mexico must also export items or services valued at a minimum of US $500,000 or make up 10% of their total turnover.
Products that are considered to be sensitive under IMMEX
The IMMEX program in Mexico distinguishes categories of sensitive sectors from those not considered to be of such a nature.
Sensitive products are those imported goods that are controlled with specific requirements because they are goods that producers can divert to another purpose other than that granted in the IMMEX Program.
- Sensitive products are the following:
- Quantities of sugar that are considered within the context of Annex I of the IMMEX Decree.
- Steel and goods made from imported steel are also considered within the text of Annex I of the IMMEX Decree.
- Tires are considered within Annex II of the IMMEX Decree.
- Textile and clothing are considered sensitive when goods from Annex III of the IMMEX Decree are incorporated exclusively to manufacture goods classified in chapters 50 to 63 and in subheading 9404.90 of the Rate of the Law of General Import and Export Taxes. Exports include the manufacturing of textile inputs and the manufacture of textile products and clothing.
Beneficiaries of the IMMEX Program in Mexico
The Ministry of Economy (SE) may authorize legal entities resident in Mexican national territory referred to in section II of article 9 of the Federal Tax Code to pay taxes under Title II of the Income Tax Law. This constitutes a single IMMEX Program. It may include establishments that act as holding companies, industrial production and services, lodging, and outsourcing. This is provided that they meet the requirements outlined in the Decree for the Promotion of the Manufacturing, Maquiladora and Export Services Industry (Decree IMMEX), published in the Official Gazette of the Federation on November 1, 2006.
Parties interested in learning how to establish operations under the IMMEX Program in Mexico are encouraged to contact the professionals at the Tecma Group of Companies.
How to start/join an IMMEX Program
Tecma has helped companies in all major industries to establish manufacturing operations under the IMMEX program in Mexico. To start your journey read the brief guide that we have put together for you.