Mexico Customs: Unlike Anywhere Else in the World
The latest e-book from Entrada Group explores the complex and regularly changing world of Mexico Customs, which international manufacturers can navigate if they partner with an experienced provider like Entrada Group.
July 18th, 2023 (Mexico): Mexico Customs regulations are complex and constantly changing but offer significant rewards for international companies that abide by them, according to information in a new e-book “Mexico Customs: Unlike Anywhere Else in the World” from Entrada Group, a leading provider of Mexico manufacturing support services.
Download Entrada Group’s Mexico Customs e-book to learn more about:
- Risks and rewards – Mexico’s Customs regime and how international manufacturers can benefit from special exemptions, as long as they know the rules and how to keep up with changes
- Mexico’s IMMEX license – a program that exempts companies from duties on raw material imports as long as all finished goods produced with those materials are exported from Mexico within set time periods
- Customs compliance and regulations – What manufacturers in Mexico need to be aware of, if they want to avoid issues ranging from fines to, in extreme cases, shutdowns
- Self-reliance – The upside of maintaining up-to-date knowledge about Customs in Mexico, such as quicker refund on VAT payments
- Saving time and money – How Entrada Group handles all Customs compliance requirements for its clients.
“Mexico’s unique approach to Customs compliance allows companies operating in Mexico the freedom to set up operations anywhere in the country and qualify for special licenses that provide advantages such as duty exemptions,” says John Paul McDaris, Director of Business Development at Entrada Group. “However, manufacturers failing to comply with the regulations can be hit with penalties, fines, and potential shutdowns,” he adds.
Faster VAT Refunds
Mexico’s imports are subject to tariffs, with exceptions for imports from free-trade partners under programs such as USMCA. In addition, imports to Mexico are also subject to a 16% VAT payment on the assessed value of the goods. The amount must be paid before the imported components or raw materials are released from Customs’ control. There are sectorial exemptions to these taxes, but in all cases, the correct taxes must be paid upfront. VAT refunds can take several months, but AAA-certified companies like Entrada Group receive refunds within 5-6 weeks. Entrada’s clients, by extension, also receive VAT refunds within that timeframe. Mexico’s compliance ecosystem is complex and comes with many risks. It requires coordination between Trade & Compliance, and Finance departments in order to reap the benefits of properly utilizing Mexico as a manufacturing alternative.
Risk and Reward
Mexican Customs are time- and resource-intensive to comply with. But companies that are able to keep up with many changes and stay compliant will realize big rewards. For example, manufacturers can benefit greatly from having an IMMEX license or obtaining authorized economic operator status (known as OEA), which entitles their cross-border shipments to less stringent Customs inspections, shortening transit time.
Yet both these certifications require long waiting periods before being granted. Many manufacturers lack the in-house staff and Mexico-specific expertise to ensure that Customs works in their favor. Fortunately, handling Customs in-house isn’t the only option. Entrada Group works hand-in-hand in with clients to manage the end-to-end Customs process, minimizing headaches and risks of compliance while maximizing the possible advantages.
The e-book explores the precautions manufacturers must take to fully leverage the upside of Mexico Customs compliance. Entrada’s expert team has 20 years of Mexico experience and is well-equipped to guide companies through all the steps for a prosperous Mexico manufacturing operation.
Want to learn more about how Mexico and Entrada Group can help your company navigate Mexico’s customs?
About Entrada Group
Entrada Group guides international manufacturers in establishing and running their own Mexico production. Our manufacturing support platform, staffed by the experts at our Mexico manufacturing campuses, assumes responsibility for all your general and administrative services, reducing cost and risk, and generating long-term growth.