How do I setup a manufacturing presence in Mexico?

15 Jul 2014


The first step is to know the lay of the land in terms of location , real estate, legal framework , labor, logistics, regulatory compliance and, of course, costs.

Foreign companies establish a manufacturing presence in Mexico using one of three primary business models: (1) standalone, (2) using a shelter provider that manages a manufacturing community, or (3) a joint venture. Each of the these business models has advantages and disadvantages in terms of startup and operating costs, risk and exposure and control.

Legal entities formed by foreign companies to produce goods in Mexico that will subsequently be exported are commonly known as a Maquiladoras or maquila operations. These operations are taxed differently than native manufacturers because of their relationship with the foreign company that provides all of the production materials.