Shelter Services in Mexico Reduced Risk. Reduced Cost.
Mexico Shelter Services
There are four principal ways to initiate and maintain manufacturing operations in Mexico these include contract manufacturing agreements, joint-venture partnerships, wholly-owned subsidiaries, and Mexico Shelter Services.
Each of the aforementioned methods of entry into the Mexican market carries with it its respective advantages and disadvantages. While contract manufacturing may be a good option for companies seeking a maximum degree of flexibility and a minimum amount of exposure in Mexico, joint-venture agreements may be the right path to take for manufacturers seeking a local business partner that possesses knowledge of and experience in the Mexican domestic market.
The formation of a wholly-owned subsidiary represents the biggest legal and material commitment to a Mexican manufacturing operation, while Mexico Shelter Services may represent the best option for those companies that seek to establish and maintain Mexican production facilities at reduced risk and cost.
Watch this short explainer video about Shelter Service:
Prince Mexico Shelter Services Reduces Risk
In the typical Mexico Shelter Services arrangement, a foreign manufacturer enters into a contractual agreement with a Mexico Shelter Services Provider (MSSP) such as Prince Manufacturing. The MSSP has an established legal entity that is incorporated in Mexico under the country’s IMMEX or “maquiladora” program. This reduces foreign investors’ risks in a number of very important ways.
Firstly, IMMEX certification allows the Mexico Shelter Services provider (Prince Mfg.) to act as the legal “importer of record” for the movement of all of the raw material, machinery, and equipment that is needed for its clients’ production in Mexico, without being subject to the payment of Mexican tariffs and/or duties. In essence, companies that contract with Prince Manufacturing operate under the “shelter” of the latter’s IMMEX license, thus greatly reducing their liability as it relates to Mexican Customs laws and regulations.
Secondly, in addition to minimizing risk related to Mexican Customs operations, Prince Manufacturing provides comprehensive human resource services to its customers that limit client risk, as well. Under its IMMEX certified Mexico Shelter Services program, Princes’ client companies’ workers are formally employed by Prince Manufacturing. This means that Prince assumes all legal responsibilities for clients’ workforce as prescribed by Mexican Labor Law. Although the Mexico Shelter Services provider acts as the Mexican “employer of record”, client companies manage their direct and indirect workers on a day to day and functional basis. As the MSSP, Prince Manufacturing is also responsible for paying all salaries and administering all the benefits that the Mexican government mandates, as well for taking care of all accounting related to its clients’ Mexico manufacturing operations.
Finally, another important risk that is mitigated under Prince Manufacturing’s Mexico Shelter Services is related to its clients’ intellectual property. Your IP remains your own and you are fully safeguarded by Mexico’s intellectual property laws.
Prince Mexico Shelter Services Reduce Cost
In addition to reducing risk in the previously examined areas, Prince Manufacturing’s Mexico Shelter Services also enable its customers to significantly reduce their operational costs. This is a result of the economies of scale that the company creates by providing the same suite of services for a number of different manufacturers at the same time. Beyond taking on the roles and responsibilities associated with acting as the “importer of record” and the “legal employer” in the areas of payroll and accounting for its client companies, Prince Manufacturing also provides a number of other services to its customers. Although they are “non-core” to manufacturing processes, they are absolutely essential in a manufacturing environment. These “non-core” additional functions include:
- Mexico Transportation and Shipping;
- Mexico Logistics and Supply Chain Services;
- Mexico Import-Export
- Mexico MRO Vendor Management;
- Mexico Accounting Services Management;
- Mexico Payroll and Benefits;
- Mexico Facilities Management;
- Mexico Human Resources;
- Mexico Consulting Services.
Please contact us to determine if there is a good fit between your company’s needs and Prince Manufacturing’s Mexico Shelters.
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