What Happens When Setting Up Operations Without a Mexico Shelter Company

There are typically two ways of doing business as a foreign manufacturer in Mexico. Companies can either operate as a standalone entity or partner with a Mexico shelter company. The latter serves as a unique advantage for U.S. and other foreign manufacturers, especially for smaller operations in their first years.

However, regardless of the size of the operation, all companies need to have compliance. Working with a shelter company reduces the risk and liability of operating in a foreign country. Plus, there’s flexibility, so if after three to four years, a manufacturer decides they want to be an independent entity, there is an established process to help them graduate out of the shelter.

Lessen the Learning Curve for Project Managers

Often, U.S. project managers are already tasked with overseeing multiple projects before the decision to expand to Mexico is confirmed. It can quickly become overwhelming when trying to learn new compliance regulations, tax laws, and business and cultural norms while in the process of relocating.

Without Mexico shelter services, manufacturers miss out on the local expertise and administrative assistance necessary to launch production. Additionally, it is far more costly and takes longer to set up the various departments and ensure compliance is met. Whereas, a shelter company streamlines the process and is more cost-effective overall with many businesses saving up to 30% on labor-related administrative functions alone.

Furthermore, when operating as a standalone entity, manufacturers are responsible for leasing their own facilities and setting up utilities, securing permits and certifications, recruiting and hiring labor, and learning Mexico tax and trade regulations. They also face greater legal exposure and risk and nearly double the setup timeline compared to working with a shelter company.

Benefit from the Value of Shelter Services in Mexico

A Mexico shelter company can help foreign manufacturers launch production in as little as three to four months versus the six to seven months it takes to set up as a standalone operation through a new legal entity. Also, rather than relying on U.S.-based project managers to automatically become experts in Mexico manufacturing, a shelter company provides a team of industry experts with an established infrastructure in place.

While administrative tasks are handled, manufacturers can fully focus on and maintain control of production, and they retain full intellectual property rights. Most foreign companies depend on shelter services in Mexico to get their operations up and running quickly and efficiently. It allows them to reduce costs without compromising manufacturing quality.

However, IVEMSA can help even if a company is already running its own standalone entity and needs assistance, such as with payroll processing or implementing a trade compliance department best practices. Every manufacturer has its own specific needs, and we are here to support any way we can. Our 15-year average customer retention rate shows how dedicated we are to those we work with.

Whether you require full shelter services or need to outsource only certain administrative departments, we provide cost-effective solutions that support long-term success.

Contact IVEMSA today to see if working with a Mexico shelter company is right for you.