Maquiladora is the term used to identify the in-bond industry in Mexico whether they are Mexican Corporations or Foreign-owned. Maquiladora operates under a preferential duty-free import/export program called "Maquiladora Program" or “IMMEX Program. This Program allows companies to set up assembly plants in Mexico that receive production machinery, equipment, raw materials, and components for assembly or further processing for subsequent exportation. A maquiladora is a low-cost manufacturing operation in Mexico that manufactures goods for export to the United States or Canada.

The main reason is Cost Reduction. You will take advantage of lower labor costs, and your operation will be relatively close to the United States permitting easier importation of raw materials and export of finished products. Additionally, your product gains regional content value, which allows for preferential treatment under USMCA tariff and quota guidelines. A maquiladora also enjoys favorable tax treatment, such as duty-free and tariff-free imports.

Mexico Maquiladora operations are diverse that include textile & apparel, electric and electronics, foods, medical, automotive, aircraft, and furniture. U.S. and Mexican companies, both small and large, are the primary benefactors in this field, followed by Asia countries, Japan and Korea, and a few European firms.

About 3,000 maquiladoras operate in free trade zones in Mexico, employing some 1.5 million people in Mexico and are one of the largest sources of trade income after petroleum exports. 

While China and other Asian countries remain an essential component of the global supply chain, procurement bids to suppliers in Mexico are surging. From 2020 to 2021, US companies searching for lower-cost options have increased by 150% towards Latin America and a drop in sourcing from Asia-Pacific by 30%.

Most operations (70%) are in significant border cities like Tijuana, CD. Juárez and Matamoros are adjacent to major US cities. The rest (30%) are in various interior areas of Mexico.

The success and growth of companies producing and assembling in Mexico speaks to the quality of the Mexico labor force.

A number of Maquilas are ISO9000 certified and several are working toward implementing ISO14000. Quality management concepts like Six-Sigma, SPC, TQM, and JIT are part of the day-to-day operations in many Mexican manufacturing operations.

Three classic strategies are listed below with increased risk, investment, and start-up time. They include Subcontract, Shelter, and a Wholly Owned Subsidiary. 

Subcontract is as simple as sending a P.O. to a Mexican Maquiladora subcontractor on a negotiated per piece-rate basis. 

A Shelter program is a more complicated step, based on a U.S. contractual agreement to allow you to operate in Mexico under the corporate shield and assistance of a Shelter Service Provider. 

A Wholly Owned Subsidiary requires establishing your Mexican Corporation with a Maquiladora Permit and total exposure to the Mexican legal and regulatory systems. For a company to be considered a maquiladora, it must obtain approval from Mexico’s Secretary of the Economy

Or Mexico Facilities are about 30 minutes south of San Diego, Ca. in Tijuana, Mexico. It is a well-developed "manufacturing center" and uniquely positioned to take advantage of the current supply and demand trends within the Maquiladora Industry and USMCA market.

Labor. Tijuana, a city of 2 million people, has a large and stable labor force of unskilled, skilled, and mid-management employees. Its people have roots in the area. The abundance of labor and its stability combine to minimize employee turnover.

Proximity. Tijuana is close to the two San Diego Port of Entries, which connects with every primary market through interstate and rail. Tijuana and Southern California shipments arrive the same day. However, shipments to and from Northern California are on a next-day basis. Tijuana's good roads and efficient border crossings offer low-cost connections with primary U.S. transportation services. 

Services. Tijuana has always been a good location for possibly sourcing some raw materials used in the Maquiladora industry. Tijuana can provide clients with professional, financial, and logistic services and many modern industrial sites for purchase or lease at rates competitive with any other major Maquiladora center.

Infrastructure. The infrastructure in Tijuana supports 2 million inhabitants and continues to permit its dynamic growth. It is the primary power producer in Baja, California, servicing large manufacturing and assembly companies. It has natural gas access lines and sufficient water for future growth. Its roads and sewer systems are modern and in good repair. Infrastructure will not limit development for the foreseeable future.

Political Stability. Baja California in general and Tijuana are models for political stability in Mexico. The peacefulness of the political process and its manufacturing-friendly outlook are significant advantages for attracting companies concerned with long-term political liability.

Climate. Tijuana has the best summer climate, and winters are also the most delightful of all the other border cities.  

Subcontracting, packaging, and manufacturing options - Subcontracting is the same as purchasing, with the main difference being that we manufacture your product to your order specifications. This alternative is most effective as a phase-in period and for components not requiring much technical support or equipment. It utilizes our existing subcontract manufacturing capability and our sourcing relationships in Mexico. You provide the specifications, training, any specialized equipment, and all raw and packaging materials required to make your product. We offer the manufacturing space in one of our Mexico facilities and the workforce needed to produce your product, which allows you to reduce the labor cost portion of your product.

The main advantages of our Subcontract Program are that you will have a fast, relatively uncomplicated start-up. We'll use our existing subsidiary in Mexico to act as the company of record with the Mexican authorities while performing all start-up activities and all ongoing operational and administrative functions.

Our typical customers are companies seeking a fast un-compromised cost reduction alternative. The significant advantages are no direct investment in Mexico, the start-up of the operation is quick, no long-term liabilities, and there's no liability with employees; you can start the process with a simple purchase order.

Our Shelter Program acts as an umbrella to protect you from government rules, regulations 

and bureaucracy, and it allows you to manufacture under our Mexico corporate entity and permits.

This Plan is ideal for companies that lack the experience or knowledge to set up operations offshore, such as negotiating or acquiring long-term commitments and dealing with the day-to-day administration of a Mexico facility. Our Shelter option covers the essential elements; you must supply investment, raw materials, capital equipment, and know-how to manufacture your product. Unlike the subcontract option, the shelter company is a service company and is not directly responsible for your manufacturing or assembly operations. The Shelter provides a corporate legal structure and a complete package of administrative and operational services, including a workforce, to support your day-to-day manufacturing operating requirements.

Under the Shelter Plan, a contractual "Services Agreement" is the basis of our relationship. You will supervise and coordinate production-related activities with complete control over the quality of the product. At the same time, the Shelter provides all ongoing operational and administrative functions keeping the operation legal and compliant in Mexico.