The Manufacturing, Maquiladora and Export Services Program most commonly known as IMMEX, is a promotion instrument through which companies are allowed to temporarily import the goods necessary to be used in an industrial or service process destined for the elaboration, transformation or repair of merchandise of foreign origin imported temporarily for export or for the provision of export services, without covering the payment of the general import tax (IGI), the value added tax (IVA) and, where appropriate, the countervailing duties.
Background and legal basis
On November 01, 2006, the Decree for the Promotion of the Manufacturing, Maquiladora and Export Services Industry – IMMEX Decree, was published in the Official Journal of the Federation (DOF), with the purpose to strengthen the competitiveness of the Mexican export sector, grant certainty, transparency, as well as for continues monitoring of operations, for the reduction of logistics and administrative costs.
Currently, according to the most recent figures published in May 29 of 2020 by the Mexican National Institute of Statistics and Geography (INEGI), in Mexico there are 5,158 authorized establishments intended for the temporary import/transfer of sensitive goods, IMMEX program. However, it is noteworthy that roughly 63% of the income obtained by manufacturing establishments in the program are from the foreign market.
It is worth mentioning that due to the Program, a great source of jobs and foreign exchange has aroused for the Mexico, mainly because of the attraction of national and foreign investments. The Program has extended and amplified the activities of foreign trade, resulting in an obvious increase in the Mexican economy in a profitable core consolidation for industrial development. Likewise, the IMMEX Program is one of the largest sources of income, highlighting progressive data month by month through the Informative Notes on economic indicators of establishment with the program, according to the INEGI, specifically in the data of the number of Active establishments, employed personnel, hours worked, remuneration and income, among other variables, although the Program has always had a trending growth, particularly due to the historical situation on the Covid-19 pandemic, in the first quarter of 2020, significantly decreased a fall of -0.3% in terms of the personnel employed in the establishments, as well as the real average remuneration paid to directly contracted personnel; manufacturing economic units decreased by -0.4%, among other relevant figures.
Below is a summary of the Program, its obligations and benefits:
a) Scope of the Program
The IMMEX Program directly grants facilities to manufacturing, maquiladora and export service companies to carry out industrial processes or services for export goods and for the presentation of export services. Allowing foreign manufacturers to import raw materials and components into Mexico, tax and duty free, under the condition of exporting the finished products.
b) General Benefits
The benefits of the IMMEX Program are the main attractions of the instrument, since the holders will have the possibility to import temporarily free of import tax and Value Added Tax (as long as they have the VAT and IEPS Certification), the goods necessary to be used in an industrial or service process destined to the elaboration, transformation or repair of imported merchandise of foreign origin, temporarily for export or for the presentation of export services.
Other benefits of the program are:
1. The application to different modalities within the Program;
2. The temporary importation of specific merchandise to carry out the manufacturing operation processes, and thus may remain in the national territory for different periods;
3. Greater specific benefits for companies that have the IMMEX Program and registered as a certified company;
4. The exemption from obligations, such as the following:
a) Process the expansion of the Program so that the goods subject to the program and the final products for export are incorporated for the destination of the goods imported under the Program itself to their production; and
b) Process the customs clearance of merchandise at authorized customs and special hours for importation, with the exception of those that may represent a risk in terms of public health and national risk.
5. The simultaneous approval of the authorization of the IMMEX Program and a Sector Promotion Program, according to the type of products it manufactures or the export services it performs;
6. Transfer the imported merchandise temporarily under its Program, to other companies within Programs or registered companies to operate in its Program;
7. The company with the IMMEX Program will be able to take advantage of the facilities established by the Revenue Service – SAT through the General Rules on Foreign Trade – RGCE, to carry out the inventory control system in an automated way.
c) General Obligations
Legal entities will be required for authorization as well as to maintain the validity of the program, under compliance with the following obligations:
1. Make annual sales abroad for a value greater than 500,000 US dollars, or its equivalent in national Mexican currency, or invoice exports, at least for 10% of its total turnover;
2. Comply with the provisions for the modality that was authorized;
3. In the case of the merchandise included in Annex II of the IMMEX Decree, temporarily import under the Program exclusively the merchandise classified in the authorized tariff sections thereof;
4. To destine the merchandise temporarily imported under its Program for the purposes that were authorized;
5. Return the merchandise in the corresponding terms according to what is established in the Law or in this Decree;
6. Keep the goods that have been temporarily imported in the address or addresses registered in the Program;
7. Requested to the Secretariat of Economy for registration, procedure before the SAT:
a) The changes in the data stated in the application for the approval of the Program, for example company´s name, Federal Taxpayer Registry and the fiscal domicile;
b) The changes of the address or addresses registered in the Program to carry out its operations and those of export sub-manufacturing, at least three business days in advance to the one in which the transfer of the imported goods is carried out temporarily under cover from the Program to the new address;
8. Notify the Secretariat of Economy of any changes in the partners, shareholders or legal representative;
9. Maintain inventory control in an automated manner, in accordance with the provisions of the SAT through General Rules;
10. In the case of the temporary importation of fuels and lubricants that are used to carry out the manufacturing operations under the Program, they must have a strict volumetric control and check their consumption;
11. Submit an annual report electronically to the Secretariat of Economy, regarding total sales and exports, corresponding to the immediately preceding fiscal year, no later than the last business day of May. It is worth mentioning that this obligation is transcendent, since in the event of its omission the benefits of the program may be suspended or even canceled until the omission of the presentation of the report is rectified within the established term.
d) Modalities of the program and its scope
The Program is only aimed at legal entities resident in the national territory that have established the main administration of the business or its effective management headquarters, and who pay taxes in accordance with the provisions of the Income Tax Law, however, these may apply to different modalities, corresponding to their activities, which are mentioned below:
1. Controller company: when the manufacturing operations of a certified company called controller and one or more controlled companies are integrated into the same program;
2. Industrial: when an industrial process of elaboration or transformation of merchandise destined for export is carried out;
3. Services: when services are carried out for export merchandise or export services are provided, solely for the development of the activities that the Secretariat of Economy determines, with the prior opinion of the Ministry of Finance and Public Credit;
4. Shelter: when one or more foreign companies provide the technology and the productive material, without the latter directly operating the Program, and
5. Outsourcing: when a certified company that does not have facilities to carry out production processes, carry out manufacturing operations through third parties that it registers in its Program.
e) Goods and Deadlines.
Companies with the Program may temporarily import the following merchandise to carry out the manufacturing operation processes and may remain in the national territory for the following periods:
- Up to eighteen months, in the following cases:
a) Fuels, lubricants and other materials that will be consumed during the production process of the export merchandise.
b) Raw materials, parts and components that will be totally destined to integrate export merchandise.
c) Containers and packaging.
d) Labels and brochures. - Up to two years, in the case of containers and trailer containers.
- For the duration of the Program, in the following cases:
a) Machinery, equipment, tools, instruments, molds and spare parts for the production process.
b) Equipment and material for pollution control; for research or training, industrial security, telecommunication and computing, laboratory, measurement, product testing and quality control; as well as those involved in the handling of materials directly related to export goods and others related to the production process.
c) Administrative development equipment.
It should be clarified that the merchandise subject to transfer by means requesting importation or exportation of virtual operations subject to the Program, will have a permanence period of up to six months, counted from the date on which it was carried out, with the exception of those transferred by national providers without a Program, whose term of permanence will be eighteen months.
f) Requirements for the authorization.
In order to be IMMEX Program authorized, the company must meet the following requirements:
1. The presentation of the application before the Secretariat of Economy in the established formats, the following general company data must be detailed:
a) The information corresponding to the partners and/or shareholders and legal representatives;
b) Detailed description of the production process or service that includes the plant’s installed capacity to process the goods to be imported or to perform the service object of the Program and the percentage of that capacity actually used;
c) List of goods to be imported temporarily, indicating the description and tariff classification, origin, provenance, destination, end user;
d) The commercial description of the good that will be imported temporarily under the program;
e) Detail the productive sector to which the company belongs;
f) The commitment to make annual sales abroad for a value greater than 500,000 United States dollars, or its equivalent in national currency, or the commercial invoice exports, at least for 10% of its total turnover.
2. The following documentation must be attached to the request:
a) Evidence or certified copy of the deed stating the partnership agreement and, where appropriate, of its modifications to the shareholding and administration system in which the registration data appears before the corresponding Public Registry;
b) Likewise, a copy of the document that legally certifies the possession of the property where the operation of the Program intends to be carried out, in which the location of the property is indicated, attaching photographs evidence;
c) In the case of a lease or loan, it must be proven that the respective contract establishes a mandatory term of at least one year and that it remains valid for at least eleven months, from the date the application is submitted;
d) Maquila purchase and sale contract, purchase orders or firm orders, proving the existence of the export project;
e) Investment program with detailed information.
3. The requesting company must be legally registered with the Federal Taxpayer Registry as well as be up to date with its tax obligations.
4. Certificate of facts issued by Public Notary official, which must include:
a) Location of the address(es) in which the production or service processes will be carried out, indicating the characteristics, conditions, details of the facilities, surfaces in square meters, photographic evidence must be attached;
b) Property ownership status, as well as a document that proves it.
c) Inventory of the machinery, equipment, furniture through which the production or service process is carried out, attaching photographic and documentary support regarding legal possession.
d) Description of the merchandise to be imported and the description of the physical space where it will be stored, attaching photographic evidence.
e) Number of employees at the facilities at the time of Fact Acts, and the activity carried out, attaching photographic evidence of the supporting of them. As well as the following documentation: payment of employer worker fees before the Mexican Institute of Social Security – IMSS, in the event that the hiring of company personnel is through a third party (Outsourcing), you must provide a copy of the service provision contract, as well as the document proving the legal hiring of employees.
5. The Secretariat of Economy may carry out verification visits to the place or places where the operations are carried out, in accordance with the authorized granted by the applicable provisions.
g) Resolution
The resolution to the request of the IMMEX Program should be issued within a term of 15 working days, counted from the day following that in which the request is presented.
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