5 Ways Working with a Mexico Shelter Company Helps Avoid Common Operational Mistakes

04.02.24

The benefits of Mexico manufacturing continue to draw in companies wanting to expand their production internationally. While many are familiar with the idea of what this strategy has to offer, there are also many common mistakes foreign manufacturers make when nearshoring for the first time.

To avoid these, we’ve rounded up several ways a shelter company can help make the transition to manufacturing in Mexico as seamless as possible.

1. Reduces Learning Curve

There are business and cultural differences to consider when operating in any foreign country. Enlisting the knowledge and experience of local experts can expedite setup and make it smoother.

Partnering with a Mexico shelter company automatically provides an innate understanding of compliance regulations and the industrial real estate and labor market, as well as insights into how to handle differences in communication and workplace expectations. Therefore, manufacturers can focus their time on production without having to worry about figuring things out on their own.

2. Ensures Regulatory Compliance

Failure to follow Mexico’s laws and regulations can lead to fines, project delays, and in some cases, full shutdowns. A key value of implementing Mexico shelter services is it minimizes risk and liability. Working under a shelter protects foreign manufacturers from legal exposure and includes all the permits and certifications necessary for them to legally operate in Mexico.

3. Sources Industrial Space and Skilled Workers

As more manufacturers look to Mexico as a cost-effective strategy, finding site facilities and skilled workers becomes more competitive. A shelter company can point manufacturers in the right direction regarding where to launch production and assist with recruiting and hiring qualified employees.

Through a site selection analysis, U.S. and other foreign manufacturers are given an overview of viable areas in Mexico to consider as they decide which location makes the most sense for their goals. Additionally, to effectively manage cross-border teams, it’s important to be aware of labor laws to ensure compliance is met. This includes addressing work week schedules, paid time off benefits, and general interactions between workers that may differ from the norm recognized in the U.S. and other countries.

4. Launches Production Quicker

While nearshoring to Mexico often reduces costs comparable to the U.S., Cina, and other industrial regions, working with a shelter company, specifically, can save businesses up to 50% on administrative roles. Additionally, companies won’t have to hire individual administrative departments to get their production up and running.

Shelter services in Mexico cover all administrative tasks necessary to launch production. These include HR, accounting, daily trade operations, payroll, taxes, and more. Due to the efficiency of the shelter model, manufacturers can expect to launch production in as little as three to four months, compared to the standard six to seven months it takes to set up a new legal entity.

5. Allows for Quality Assurance and Ownership

Some companies choose to outsource their production to third-party manufacturers in Mexico. While this may help meet their demand, it limits oversight ability and maintaining quality assurance.

Shelter services in Mexico do not cover production tasks and responsibilities. This is left to the manufacturer, giving them full oversight of their processes and complete ownership of all tools, materials, and equipment, as well as any intellectual property rights.

Full Administrative Support for Foreign Manufacturers

There are several moving parts necessary to launch production in a foreign country. When making the move to Mexico, the majority of manufacturers choose to operate with Mexico shelter services.

This approach is customizable and allows companies to stay flexible to either expand services or eventually operate as their own entity. Those who work with IVEMSA typically stay for an average of 15 years, though there is always the opportunity to graduate from the shelter program as needed.