There are several ways in which a company can establish operations in Baja California: to establish on their own, search for a manufacture subcontracting, hire a Shelter company for management services, or by constituting and Association or Joint Venture.
Foreign companies conducting manufacturing operations oriented towards export activities, are commonly established by a Mexican subsidiary and conduct operations under the IMMEX program (formerly Maquila Program).
This program allows the import of equipment, raw material, and tax-free components for their processing and subsequent export to other markets. This model has effectively operated for the last 50 years:
Some of the main advantages of establishing manufacturing operations in Baja California are:
- Foreign companies may acquire properties and have full control over their entire operations.
- Proximity to California, U.S.A., as part of the Cali-Baja mega region. www.calibaja.com
- Foreign companies are free to buy or lease properties in Mexico
- Great manpower availability
- Stable and competent work force
- Competitive manpower costs
- Greater production per labored hours (48 labor hours per week)
- Potential sales in Mexico
- Stable political climate
- Registry in the PROSEC program (Import of raw materials not available in Mexico at competent rates)
- Opportunity to work in Mexico and live in the United States (when meeting the requirements for legal residence of the Immigration Office of the United States of America)
Establishing your own company
When establishing your own company, it acquires full legal responsibility and shall have all the direct management positions. This option is most commonly chosen by mid-size and large companies and the State Government, through the Secretariat of Economic Development, will serve as a link between government offices and the company, with the intention of providing the necessary support to achieve its establishment in accordance with the applicable Mexican laws.
If a company decides to subcontract, it does not need to invest in Mexico directly and there are no long-term responsibilities. It is a simple and fast way to begin operations in Mexico, since the only requirement is a printed purchase order or quotation and the agreement signed by both interested parties (client-supplier).
The client usually provides the machinery and specialized equipment, the product specifications and quality parameters, as quell as the direct and indirect materials. When necessary, it also provides the required technical support. The product´s quality control is under the responsibility of the supplier and shall assume full responsibility in Mexico.
The Shelter program consists on the management coordination services (accounting, taxes and payroll, project management, traffic and customs services, and human resources, among others) that a program operator offers to the manufacturing industry, so it may concentrate its efforts in its own processing activities (production, quality control, machinery, equipment and tools, etc.).
In addition, the Shelter operator may assist in the selection of the company´s site for operations by conducting all types of procedures to obtain the licenses for the import of raw materials and the export of the finished product, determining technical problems and their solutions, and supporting the selection of human resources (technicians and management personnel).
Baja California´s industrial experience is open to receive co-investment proposals and initiatives from innovative companies with the ability and process know-how that may be incorporated to production processes of local export companies or to process inputs into a finished product for export.