Jose Grajeda, Vice President of Operations for the Tecma Group of Companies, ,explains the several methods by which companies can begin manufacturing in Mexico, while examining the pros and cons of each. The main distinction that he draws between establishing a whollly-owned subidiary, or a “permanent establishiment,” and operating in Mexico under the Tecma Group’s Mexico Shelter Manufacturing Partnership (MSMP) is the mitigation of risk that results from choosing the latter.
Hello I am Jose Grajeda, V.P. of Operations for the Tecma Group of Companies. If you are considering the option of manufacturing in Mexico, there are principal methods to start up your Mexican operations. The first one entails the establishment of your own Mexican legal entity. You can accomplish this by utilizing the services of our firm. We can help you and guide you to navigate all the permits that are required by Mexican government agencies to order operate under the maquiladora scenario in Mexico.
Another method is to focus on creating permanent legal establishment in Mexico, but, in the end, this could end up being the high cost option. Why is this? Because this method of establishing manufacturing in Mexico encompasses taking on all the fiscal and legal responsibilities associated with operating in an unfamiliar business environment. However, there is an alternative method. This would be the Mexico shelter option.
If you wish to test the waters in Mexico, this can be a preferred way to do so. You can test to see if your Mexico project and business model works successfully, before taking the next riskiier step of forming a legal entity on your own, in the country.
This processs creates additonal value: A Mexico shelter operation can be set up with little to no liability or risk. Mexican shelter companies provide their clients with access to professionals that can help companies to set up to manufacturing in Mexico from a legal as well as manufacturing perspective. As far as time frame concerns go, a Mexican shelter company offers a short cut. Why? Because a shelter company in Mexico already has the requireed permits in place, and can bring manufacturing companies under their legal umbrella. They will enable you to cover all the aspects related to set up your manufacturing in Mexico operations. Here are a several of points meant to provide an overview as to how a shelter company can help you to start-up in Mexico:
Mexican shelter companies can help to research the availability of available industrial space, as well as to negotiate price.
The staff of shelter company can also assist with issues related to construcion managment and industrial build outs of industrial sites.
With respect to facilities, Mexican shelter company personnel will help you to set up all utility contracts, develop layouts and will work with you to develop electrical and pneumatic infrastructure for your building, as well as assist with equipment installation. This is so that you can concentrate on other issues that are important to your business, and begin your manufacturing in Mexico..
Mexican shelter company customs personal can help your import and export logistics. Professional staff can also help to analyze what customs classifications will apply to the items that your company imports into Mexico.
Human resouces staff of shelter companies in Mexico conduct labor market analyses for their clients. They will hire all your workforce: direct, indirect, administrative and management level personnel in a competitive Mexican labor market.
Environmental and industrial safety personnel assist you in your start-up of manufacturing in Mexico will guide you on what you need to comply with to begin to execute your processes under Mexican law. They also help in the preparation of all applicable legal permits.
Shelter company accounting and payroll personnel will set up related processes prescribed by Mexican law for companies that are manufacturing in Mexico.
IT services provided by shelter companies can set up your telecommunications and data networking according to your company’s needs.
These are only a few points related to the various aspects of initiating the activities related to manufacturing in Mexico with a shelter company. However, the value-added that is attached to the Mexico shelter option is that you will focus only on producing and shipping roduct, the shelter company will manage all the legal aspects necessary to begin manufacturing in Mexico. Should you be consider establishing operations in Mexico, it is necessary to consider the direction in which you wish to go. The way which requires that you and your compapny manage and assume responsibility and risk for all aspects of the operation, both manufacturing and non-manufacturing, or the method by which you can focus on your manufacturing in Mexico. Thank you for your attention.
Photo credit: @yakobusan Jakob Montrasio 孟亚柯