Insights for Exporting to Mexico
Mexico is a very active importer of export goods from nations around the world. The following insights into Mexico’s import/export system should assist those looking at exporting to Mexico to increase sales and profitability.
The environment for exporting to Mexico
As a member of the World Trade Organization (WTO), Asia-Pacific Economic Cooperation Mechanism (APEC), and Organization for Economic Cooperation and Development (OECD), Mexico is focused on doing business with the world. Strategically positioned along the border of the US, with ports facing both Europe and the Pacific Rim countries, and as the gateway to Latin American countries, Mexico provides a unique opportunity for import/export manufacturers.
Foreign trade operations receive preferential duty treatment for over 50 countries, thanks to the numerous Mexican free trade agreements the nation has entered into. And most temporary imports are exempt from customs duties, making Mexico a key partner in global manufacturing and trade.
Mexico’s Import Regime
- Tariff Classification: Mexico follows the Harmonized Tariff System (HTS), so its classification system is in line with most other countries.
- Customs Law: Mexico’s import law has been in place since the 1990s, and provides stability, certainty, and confidence for investment.
- Customs Valuation: generally, Mexico follows the valuation agreement approved by the WTO in that value for tax purposes is typically determined by the transaction value of the merchandise.
- Rates: most taxable merchandise is taxable at a duty rate of 3%-20%.
- Special Rates/Customs Associations: in addition to preferential duty rates for countries in free trade agreements with Mexico, some additional preferences are provided in the form of import duty reductions; such reductions are available to select countries and may be requested if a certificate of origin is submitted before customs.
- VAT: most imports of tangible goods are subject to a value-added tax (VAT) typically at the same rate as domestic sales (16%).
Documentation and Procedures related to exporting to Mexico
Regular importers to Mexico must be registered as a taxpayer, and if exporting out of a country in a free-trade agreement with Mexico, a certificate of origin is required. Other documentation required before presentation at a customs office for clearance include:
- Any special import licenses
- Customs declaration
- Commercial invoice
Strict records should be kept, as Mexican customs officials are empowered to not only physically inspect freight within Mexico, but, also, request documentation on the legal status of foreign merchandise. Noncompliance with any customs requirements may be severely punished with fines up to 100% of the merchandise value or in some extreme cases confiscation or criminal prosecution.