by CUSTOMS, FOREIGN TRADE & VAT LAWYER CHRISTIAN A. HARO
Legal Liaison Counsel to Braumiller Law Group, PLLC
Mexican Customs Law
Associate, Toulet, Gottfried, Dávila y Martinez
1) What is an IMMEX program?
The IMMEX Program is an instrument which allows the temporary importation of goods that are used in an industrial or service process intended to produce, transform, or repair foreign goods imported temporarily for its subsequent export or the provision of export services, without covering the payment of the general tax for import, the value added tax, and where appropriate, the countervailing duties.
2) What are the main benefits for Maquiladoras?
The IMMEX program provides one with the availability to import, temporarily free of import tax and the Value Added Tax, the goods necessary to be used in an industrial process or service to produce, oriented to transform or repair foreign goods temporarily imported for its subsequent export or the provision of export services.
These goods are classified as follows:
- Raw materials, parts, and components which are to be totally integrated into export goods; fuels, lubricants and other materials for consumption during the production process of export goods; containers and packaging; labeling and leaflets.
- Shipping containers and boxes.
- Machinery, equipment, tools, instruments, molds and spare parts for the production process; equipment and devices for contamination control, research or training, industrial security, telecommunications and computing, laboratory, measurement, product testing and quality control; and those involved in handling materials directly related to export goods and others linked to the production process; and administrative development equipment.
3) What are the Tax benefits for Maquiladoras?
- Bypass the payment for General Import Duties.
- Bypass the payment for Value Added Tax.
- Reduce and/or Exempt the General Import Duties for the non-NAFTA goods by using the Sectorial Relief Programs.
4) What is a VAT Certification?
Value Added Tax Certification is a permit granted by the Federal tax authorities that allows maquiladora entities to perform temporary imports without paying VAT.
5) What is the best way of doing business in Mexico?
The best way of doing business in Mexico is with the assessment of qualified professionals who understand the current government practices and policies in place, and have a good understanding of the legal provisions involved on both sides.
6) What are the preferential system tariffs that apply for Maquiladoras?
- Foreign trade Agreements
- Sectorial Relief Program
- Harmonized Tariff System (tariffs without duties)
7) What are the most reliable customs schemes in Mexico?
- All of the temporary regimes allow tax reductions or exemptions.
- The Fiscal Strategic Zone (FEZ) allows for tax reductions or exemptions, a higher time frame for the manufacturing process; and the bypassing of the acquisition of import/export permits. The scrap generated by the manufacturing process will not cause contributions. In addition, the FEZ could be used for warehousing, custody, exhibition, manufacturing, sales and repairing.
8) I already have a maquiladora. How will I know if it’s in full compliance within legal provisions?
You will need to perform audits periodically within your foreign trade operations. In order to perform the correct audit you will need the assistance of a customs lawyer. A customs lawyer is best suited for this type of project.
9) What are the Maquiladora’s pros and cons?
- Tax exemptions and/or reductions.
- U.S. goods could be sold in Mexico.
- Develop own clients in Mexico.
- Promotion of your products in Mexico.
- Sell services in Mexico.
- Lower labor wages.
- Quality in the manufacturing process.
- Government requirements and policies.
- Things are done different than in the U.S.
- Several domestic regulations.
10) What do I need to know in order to establish a Maquiladora?
- The IMMEX Programs will remain valid while the holder continues to meet the requirements for authorization and the obligations established in the Decree.
- In order to take advantage of the benefits of an IMMEX program the terms established in the Decree must be fulfilled. The authorization of the Program will be granted under the commitment to have annual sales abroad of at least US $500,000, the equivalent sum in Mexican pesos, or invoice exports accounting for at least 10% of the total invoices.
- The holder of an IMMEX program must submit an annual electronic report of total sales and exports for the preceding tax year, no later than the last business day of May. This rule was established by the Secretariat of Economy through the General Rules and Criteria on Foreign Trade.
- All procedures relating to the IMMEX Program are free and can be done at the public service windows of the federal agencies of the Secretariat of Economy corresponding to the address of the plant where the production process or service is carried out.
- There are five categories for IMMEX companies: 1) IMMEX holding program, 2) IMMEX industrial program, 3) IMMEX services program, 4) IMMEX shelter program and 5) IMMEX outsourcing program.