Moving Manufacturing Operations from Asia to Mexico: A Presentation to the Chinese Manufacturers’ Association

Businesses are increasingly moving manufacturing operations from Asia to Mexico to minimize supply chain risks and access a larger global market. There are also a wealth of economic and tax benefits to manufacturing in Mexico, many of which were described by Hone Maxwell LLP attorneys Josh Maxwell, Carolina Juarez, Aaron Li and Claudia Ignacio during a recent presentation to the Chinese Manufacturers’ Association of Hong Kong.

Mexico has also become a primary destination for manufacturers because of its skilled workforce, competitive labor costs and proximity to the U.S., said Maxwell, HMLLP’s managing partner. He discussed how businesses that create a Mexico-U.S. parent company structure can benefit from favorable tax rates, low tariffs and a variety of simple investment options.

Another reason Mexico has gained popularity as a manufacturing destination in recent decades is the IMMEX Program. Commonly known as “maquiladoras,” the IMMEX program allows foreign manufacturers to bring raw materials and components to Mexico tax and duty free if the finished goods are all exported out of Mexico within a certain time frame.

To take advantage of the IMMEX program, Maxwell said foreign manufacturers can partner with an external service provider, known as a shelter operator, that is authorized to operate as an IMMEX.

Several Mexico-based news publications reported on the presentation, including Norteño Politico, Diario Tijuana and Ciudad Tijuana.

Disclaimer: Hone Maxwell LLP articles and blogs are not intended as legal advice. Additional facts, facts specific to your situation or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information herein.

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