Understanding Shelter Services in Mexico

The IMMEX program established shelter services in Mexico in the 1960’s. Since then, manufacturers have been taking advantage of the valuable benefits offered. U.S. Manufacturers, in particular, experience the greatest advantage thanks to some additional factors. But what exactly are shelter services?

Shelter services in Mexico are provided by special shelter companies. These shelter companies provide a variety of resources for manufacturers. These include qualified labor, administrative staff, access to industrial real estate, and more. Manufacturers are also given other valuable benefits as well.

Knowing the ins and outs of shelter services in Mexico will give manufacturers the information they need to decide if they’re a good fit for their business. 

What Are Shelter Services in Mexico?

Shelter services in Mexico allow foreign companies to take advantage of the high-quality manufacturing industry in the country. It involves partnering with a shelter company in Mexico that acts as the legal entity for many of the government and tax-related aspects of doing business in Mexico . Most shelter services only require you to provide the raw materials and components which are imported into the country tax and duty-free. Everything else, such as handling Mexican law, human resources and other administrative tasks, is handled by the company that provides shelter services.

This allows you to focus on the manufacturing side of your business, but you still maintain full control over the production process and you’re still able to make administrative decisions should there be a need to. These factories are also known as maquiladoras, production facilities that are typically owned and run by a foreign company but managed by local Mexican workers.

Here are some of the most common services that a shelter service in Mexico can offer.

• Cost analysis to help calculate the costs of moving your manufacturing to Mexico via a shelter program.
• Human resources, such as managing employees concerns and wellbeing while also recruiting workers for the factory and administrative positions like accounting.
• Industrial real estate services to find the right place for manufacturing to take place. Shelter operators typically take care of regulatory permits, negotiating lease terms and finding vendors and suppliers as required.
• Legal assistance such as complying with environmental regulations and facilitating agency inspections.

When Did Mexico Start Offering Shelter Services?

Shelter services started in Mexico in 1966 with Cal Pacifico leading the charge as the second company to operate under the new Maquiladora program in Mexico.  This helped to pioneer the shelter service model and proved so successful that many overseas manufacturers started to take advantage of the benefits offered by a shelter service.

The reason for the name “shelter service” was because the programs sheltered companies from the risks and liabilities that normally affect firms that choose to incorporate directly. This essentially makes it a value-added outsourcing arrangement that helps a business become more agile and flexible in their manufacturing processes. For U.S. manufacturers, this can serve as a valuable nearshoring alternative to less attractive offshoring manufacturing.

Today, shelter services are offered through programs that are managed by specialised companies. Some of the most common industries that utilize shelter services include aerospace, electronics, metal mechanics, general consumer products and automotive. Managed shelter program services typically recruit and oversee the employees and administrative staff members required to operate a Maquiladora while also taking on the responsibilities when liabilities and risks involved should something happen.

Benefits of Using Shelter Services in Mexico

Here are some of the major advantages of using shelter services.

• Operating under a shelter means that you can save on income taxes, infrastructure costs, permits, license fees and labor costs. Many businesses can save a huge amount of money by moving their manufacturing over to Mexico under a shelter service.
• Shelter services in Mexico can typically launch production in just 6 to 8 weeks, drastically cutting down on the start-up phase to help your business grow.
• Despite most of the administrative tasks being handled by the shelter services, you’ll still maintain control of production and have full intellectual property rights.
• Since your company technically has no legal presence in Mexico, it means that the shelter service will carry most of the responsibility should something go wrong, minimizing risk and liability.

With so many fantastic benefits of shelter services in Mexico, it’s easy to see why many companies have decided to move their manufacturing operations to Mexico via a shelter company.

Choosing a Shelter Service Provider

Shelter services are offered by a number of different companies and it’s important to examine each one and the services they provide. This will help ensure that your shelter service provider is the right fit for your needs and can help you establish an effective production facility in Mexico.

Here are some of the basic questions to ask your shelter company before you decide to do business with them.

• What are the fees involved and are there additional administrative charges that haven’t been discussed yet?
• What’s the full list of services offered by the company?
• What services are offered and do they incur additional costs?
• What’s included with the lease cost of the facility?
• What facility related costs is the shelter provider and manufacturer responsible for?
• Does the shelter service provider have a separate license for each client?

Many of these questions will have a huge impact on the costs associated with the shelter service so it’s important to do your research and compare several different service providers in order to get a full picture of what you’ll be paying for.

Shipping Freight to and From Mexico With R+L Global Logistics

As experts in the shipping industry, R+L Global Logistics is the perfect logistics partner to any Maquiladora that operates in Mexico. With professional logistics staff that go above and beyond to provide safe, timely and value-added services, we offer outstanding solutions to help you optimize every step of your supply chain.

In addition to managing the direct transportation of goods and Mexico cross border freight shipping, our additional 3PL services provide full coverage for your supply chain. These services include:

• Customs Brokerage
• Warehousing
• Fulfillment services (Pick and pack, kitting and assembly, cross docking facilities)
• Warehouse management systems
• High Value/High Risk freight service

Allow us to help you make the most of your shelter services in Mexico. Give us a call at (866) 335-0495 to see how we can make shipping your products to and from your manufacturing facility in Mexico affordable and secure.