In this episode, Ricardo Rascon welcomes back David McQueen to discuss how to choose the right shelter service provider in Mexico. Prior to joining Tetakawi, David was the president of two Canadian companies who expanded into Mexico using shelter service providers.
To begin, David explains that Mexico’s shelter service program was set up over 30 years ago with the idea to provide foreign manufacturers with an easy way to operate in Mexico. It allows a foreign company to do most of the things they would do if they were independent, but they don’t have to have a permanent establishment. It begins with a contract which advises the Mexican government that this company will be coming in and operating. Shelter service clients are protected from liability of Mexican officials. In order to qualify for a shelter service, a company must be doing some kind of transformation of their products and meet the IMMEX standards.
Organizations can find a shelter service provider several different ways: searching online search engines, Mexico’s INDEX organization, through their own network, industry events and podcasts. There are currently 25 shelter providers in Mexico. A good starting point for finding a match is to begin searching within your company’s preferred general region. If you don’t have a specific region in mind yet, your best bet is to begin by speaking with the largest shelter service providers to get a better idea of their options. The first things you should find out from a potential provider is how big they are, where they provide services and what kinds of services are available. Most organizations want to operate within an area which is already prepared to cater to their specific expertise. You will also want to be sure a service provider has the proper talent in place to aid your operations. Next, David speaks to the costs of using Mexican shelter service providers. While shelter providers can often help identify providers, they are not directly involved in your business or familiar with your raw material costs. Costs, credit and payment terms will vary from shelter to shelter, so it’s important to discuss costs with your chosen provider. Transition contracts will typically end on the day stated on the initial contract. In other cases, a shelter provider may want to match the contract terms to the term of the real estate, typically 5-7 years. However, shorter term contracts are also available.
Thank you for joining us on Manufacturing in Mexico!
Access this link to download our Buyers Guide to Choosing a Shelter Service Provider in Mexico: https://go.tetakawi.com/en/ebook/shelter-mexico-buyer-guide