Mexico is quickly becoming the world’s leading destination for businesses looking to relocate or expand abroad. With its size and location, the country boasts a large and skilled workforce with an easy access to both the North American, as well as South American markets.
It is precisely Mexico’s location and its proximity to the United States that makes the country an ideal choice for businesses and investors looking to reduce transportation costs, and considering Mexico’s favorable trade agreements, such as the United States-Mexico-Canada agreement(USMCA) which gives preferential access to the North American market, it is easy to understand why.
Expanding production to Mexico, although ultimately beneficial, does come with its challenges and difficulties which require detailed preparation and careful and strategic decision-making.
In this article we will try to give a basic insight into some of the compliance-related challenges that investors might face when starting operations in Mexico, and introduce you with the role of shelter service providers who help deal with and overcome these challenges through a comprehensive range of services.
Compliance Challenges in Mexico’s Business Landscape
Mexico’s business environment is as diverse as its culture, and navigating the complex legal and regulatory landscape can be a great challenge for new investors who haven’t yet familiarized themselves with local rules and regulations.
In order to comply with all the different laws and regulations including taxation, labor laws, environmental regulations, and customs procedures, one has to have a detailed and updated knowledge of all of these.
If we look at just the labor regulations, for example, they will be different from those of other countries in terms of wages, profit sharing, severance payments, and other employee benefits.
Environmental laws will include strict requirements for waste management, emissions control, and environmental impact assessments which also will be different from similar regulations in other countries, and it is essential to follow all of this to not risk heavy fines.
Not only that, but noncompliance with local regulations will cause other legal complications and can result in operational delays that damage a company’s reputation with everyone from their business partners, to authorities, and the local community. That’s a sure way to lose your footing when trying to establish a new business in a foreign country.
With proper planning and guidance from legal experts, all of these challenges become manageable, as shown by numerous investors who have already recognized Mexico’s regulatory and legal landscape as one that is conducive to the development and growth of their manufacturing business.
Advantages of Shelter Services in Mexico
Many manufacturers and other businesses rely on shelter service providers to help plan and set up their relocation to Mexico. These companies offer a turnkey solution and provide support in a number of areas including human resources, payroll administration, and facility management, and will even handle purchasing negotiations and foster good vendor relationships.
One of the risks that shelter service providers in Mexico excel in mitigating is the risk of compliance and regulatory issues. They provide companies with legal guidance which results in compliance with all the different rules and regulations and ultimately comes with significant savings as well.
Under these arrangements, businesses operate under the legal umbrella of the shelter service provider which allows them to keep focus on their core business activities while the shelter service provider handles the rest, from handling all the administrative tasks like the company’s registration, to managing payroll and the facilities.
Partnering with a shelter service provider in Mexico is almost like a cheat code that accelerates the whole relocation process for the investor while minimizing the risks and maximizing efficiency and profits.
Conclusion
Moving or expanding your production to Mexico comes with numerous advantages because of the country’s strategic location, favorable laws and trade agreements, a large and skilled workforce, and lower costs of production and logistics. All of these have made Mexico one of the world’s manufacturing giants that keeps attracting an increasing number of investments from different industries including textiles, electronics, and medical device manufacturing.
Despite all of the advantages, Mexico’s legal and regulatory landscape comes with certain potential challenges in the shape and form of laws and regulations that differ from those of other countries. Environmental and labor laws are just a few that all new businesses will have to adhere to and that require diligent preparation and often handled best in consultation with professionals.
Luckily, Mexico also offers a turnkey solution to mitigate all legal and regulatory risks and avoid a plethora of other potential problems. Shelter service providers do all that and more. These companies handle everything from planning to execution giving the investor a chance to deal with its core business activities while the shelter service provider navigates the complex landscape of rules and regulations. Shelter service providers offer extensive services and ensure that every client’s move to Mexico goes smoothly, quickly, and with the least stress, problems, and expenses.
