Baja California is a border state in Mexico just below California. The primary transfer points are with San Diego (San Ysidro) and Calexico, CA. Baja is the state where most Maquiladoras are operated.
Americans know the state for its beaches, the wine country in Ensenada that many are saying rivals Napa Valley, and the delicious food. The city of Tijuana, which borders San Diego, has become a major outsourcing and FinTech center for latin America.
In the past few decades Baja California has become a haven for American entrepreneurs and all thanks to the IMMEX or Maquiladora program. Thanks to Americans opening their business on the Mexican side of the border, the state of Baja California has an unemployment rate of 0% (more jobs than workers). Let’s begin by explaining what the IMMEX program is.
- Keep in mind that Baja California is in Mexico and San Diego, California is in the United States. This can be confusing to those not from the region.
Faced with the competition from global markets, it was essential for Mexican companies to to leverage their proximity and relationship with the United States. This would put them in a position to move their goods internationally.
They did this by allowing American companies to produce goods in Mexico and sell back into the the United States as well as globally… bringing jobs to Mexico and profit to the United States.
On November 1, 2006, the Mexican Federal Government published the Decree for the Promotion of the Manufacturing Industry, Maquiladora and Export Services (Decreto IMMEX). This decree integrates the programs for the Promotion and Operation of the Maquiladora Export Industry (Maquila) and the Temporary Import to Produce Export Items (PITEX).
The IMMEX Program is an instrument through which companies are allowed to temporarily import the necessary goods to be used in an industrial process or services destined for elaboration, transformation, or repair of merchandise of foreign origins temporarily imported for export.
That is to say, IMMEX allows US companies to temporarily import materials to be used the the production of goods. Those goods must then be exported and may not be sold into Mexico.
The IMMEX Program provides its partners with the possibility of importing merchandise on a temporary basis, deferring the payment of the general import tax, the value-added tax, and other applicable taxes.
Provided that they carry out an industrial or commercial process, the transformation and/or repair of manufactured goods, or are the intermediary between companies who wish to export material goods, companies may receive significant tax and duty benefits.
The goods included in the IMMEX Program are grouped under three categories:
- Raw materials, parts and components whose purpose is to integrate export goods, fuels, lubricants and other materials that are going to be consumed during the production process of the export merchandise, packaging and packaging, as well as labels and brochures.
- Boxes of trailers and containers
- Equipment, tools, instruments, machinery, molds and spare parts, as long as they are destined to be included in the production process, equipment and devices for pollution control, for research or training, telecommunications and computing, industrial safety, laboratory, measurement, product testing and quality control. Likewise, those who intervene in the handling of materials that are directly related to export goods and others linked to the production process, such as the equipment necessary for administrative development.
Benefits when Importing products with the IMMEX program
- Not paying the General Import Tax (IGI-tariff-Advalorem), it is necessary to consider what is established in articles 63-A of the Customs Law and 303 of NAFTA
- The Value Added Tax (VAT) is not paid, according to article 9, fraction IX of the VAT law
- Compensatory fees are not paid
- Decrease in the Customs Processing Fee (DTA),
- No VAT payment on national purchases, see Art. 1-A, fraction IV of the VAT Law.
- The facility in making virtual transactions
- Elaboration of import documents
- Obtaining the VAT refund, when you have balances in favor in your declarations, in a period no longer than 20 business days, according to article 32 of the IMMEX decree.
- A Sector Promotion Program (PROSEC) will be authorized simultaneously. For the service modality, you can import everything that is stated in article 4 of the IMMEX decree, subsection III, which is all the machinery, equipment and spare parts.
- The registration will be automatically registered in the importers registry, without having to carry out the procedure.
On the validity of these programs, they are available as long as the license holder complies with the requirements, as well as with the obligations established in the decree.
I hope you’ve found this article on the IMMEX program in Mexico to be helpful. For more information, or for assistance in investing in Mexico or opening an offshore company, please contact us below by filling out the form. Thank you. We’ll be happy to assist you and can connect you with business and residency experts in Mexico.