NEARSHORING AND VAT EXEMPTION

The business world is constantly seeking innovative ways to streamline operations and maximize profitability. In this context, nearshoring is emerging as an increasingly popular strategy, especially in the realm of manufacturing and exportation. What exactly is nearshoring, and why should foreign companies consider Mexico as a destination for their operations? Let's explore some key reasons.

What is Nearshoring?

Nearshoring is a business practice that involves establishing operations or contracting services in geographically close countries instead of opting for more distant or foreign locations. In the context of manufacturing and exportation, this means selecting Mexico as a destination for the production of goods destined for the international market.

Advantages of Nearshoring in Mexico:

1. Geographical Proximity to the United States: One of the main advantages of nearshoring in Mexico is its geographical proximity to the United States. This closeness facilitates communication, logistical coordination, and mutual understanding among the involved parties. Additionally, cultural similarity can help minimize barriers and conflicts in business collaboration.
2. Competitive Costs: While labor costs in Mexico are lower than in many developed regions, the Mexican government also offers tax benefits and competitive advantages for companies choosing to establish operations in the country, contributing to overall cost reduction.
3. Talent and Experience: Mexico boasts a highly skilled and experienced workforce across various industries, from manufacturing to technology. By opting for nearshoring in Mexico, foreign companies can leverage this local talent to drive innovation, improve product quality, and increase operational efficiency.
4. Access to International Markets: Mexico's strategic location allows for easy access to markets in North America, Latin America, and beyond. By establishing manufacturing operations in Mexico, foreign companies can take advantage of free trade agreements and commercial alliances the country has, facilitating the export of their products to diverse global markets.

In this context, Mexico emerges as an ideal destination for companies seeking to maximize operational efficiency, access quality talent, and expand their presence in international markets. Nearshoring in Mexico is not only a viable option but can also be the key to business success in an increasingly globalized and competitive world.

What do you need to operate Nearshoring optimally?

1. IMMEX Program: Under this program, companies can temporarily import inputs, machinery, and equipment without paying tariffs or taxes, as long as the finished products are destined for export.
2. VAT and IEPS Certification (CIVA): This certification allows beneficiaries of the Manufacturing, Maquiladora, and Export Services Industry Program (IMMEX) to temporarily import inputs, machinery, and equipment without paying the VAT tax. However, to obtain this certification, companies must meet certain requirements and commit to allocating the finished products for export or for the production of export goods.

We, at E&H CONSULTING, make ourselves available to support you in obtaining the IMMEX Program and the VAT and IEPS Certification.

E&H CONSULTING is a consultancy firm composed of lawyers and specialists in foreign trade, with professional experience within the field of IVA and IEPS CERTIFICATION at the Tax Administration Service and in the private sector supporting in the creation, maintenance, and risk prevention regarding IMMEX and CIVA.