What are Shelter Companies?
A shelter company is a third-party supplier that provides real estate and other resources to complete a project. At the same time, the hiring party retains full control.
Through a Mexican government-supported shelter program, companies do not have to pay income tax in Mexico for four years, while the Mexican shelter company “shelters” the foreign company with a manufacturing facility, raw materials, and more.
When a Mexican company is there to offer shelter services, they will secure licenses and permits needed to operate in place, allowing production to commence much faster.
Most companies that operate under a shelter contract manufacturing can be up and running in Mexico in just 3-6 months.
What Shelter Services are offered?
Besides obtaining licensing and permits, manufacturing communities offer various service needs. Shelter companies in Mexico provide administrative services such as HR and accounting, advisors to deal with Mexican legalities, and all the core manufacturing functions needed to carry out the manufacturing operation.
Risk & Liability
When working with a shelter company, the provider assumes much legal risk and liability. It is up to the shelter company to ensure all compliance measures are being met and that rules and regulations are being carried out appropriately.
Services offered by Shelter Companies in Mexico include:
- Human resources and recruiting
- Employee payroll and benefits administration
- Customs management and import/export administration
- Tax and fiscal compliance issues
- Environmental and occupational health and safety
- Purchasing negotiations and vendor relationships
- Facilities management and real estate
The benefits of working with a Shelter Company
Access to a skilled workforce
Skilled labor, is defined as at least five years in an industry-specific role, is plentiful in Mexico. In recent years, Mexico has made it a priority to provide exceptional service to manufacturing companies. As a result, the Mexican workforce is filled with highly skilled workers who bring value to operations.
Room to grow
A growing business means a growing output of products, but it also requires growth behind the scenes to hire more employees, organize larger-scale accounting, and more. When working with Mexico shelter companies, all of these areas are accounted for. The right shelter service provider is there to help keep up with the growth of your business.
The Mexican government views the shelter manufacturing model very favorably, benefiting the Mexican economy. Companies operating under the shelter service model are rewarded through income, consumption, and import/export tax incentives.
Doing Business with Foreign Companies
In recent years, China has been the hub for manufacturing outside the United States. Still, many businesses have been looking for an alternative closer to home with various growing issues, including cost and supply chain.
Manufacturing with Mexico shelter services offers foreign companies tax advantages, cost savings, and a skilled industrial workforce to support their manufacturing operations. There are several options available when setting up a new operation in Mexico. However, working with a shelter program is one of the most cost-effective, efficient, and safest ways to save on everything from janitorial and security costs to logistics and customs fees while completing a project.
Shelter Manufacturing with BF&S
BF&S’ full shelter services allow our clients to have full control of their quality and production. Clients benefit from our experience and knowledge of the local market, eliminating the need to make sizable investments in physical and human assets.
Our customers can initiate operations quickly without actually establishing a legal presence in Mexico. BF&S “shelters” our customers from many risks and liabilities.
BF&S performs these tasks and functions that are not core to the manufacturing process, allowing our clients to focus on those areas that affect their profitability and growth.