Mexico Cross Border Freight Logo Powered by R+L Global Logistics
Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors
Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

Benefits of Maquiladoras

Working with a Maquiladora comes with many benefits for businesses looking to maximize profits and reduce delivery times. Find out more in this article.

By

Joe Weaver
Last Modified: August 27, 2024
Share This Article
copy-link-to-clipboard Copy URL to Clipboard
RECENT Articles
Mexico to U.S. Trucking Companies: What to Look For
Shelter Services in Mexico: A Guide for Foreign Manufacturers
Shipping Heavy Equipment to Mexico from the U.S.
See Full Article List  >

The Industria Manufacturera, Maquiladora y de Servicios de Exportacion (IMMEX) program, formerly referred to as the Maquiladora Program, has been a major part of manufacturing operations in Mexico since 1965. The advantageous geographic locations of these manufacturers along with other key benefits create lucrative opportunities for businesses based in the U.S. 

Key Takeaways

  • Maquiladoras are Mexican-based manufacturing plants that import raw materials and export finished goods into the U.S.
  • Labor rates in these plants are far lower than those of equivalent manufacturers in the United States.
  • The United States-Mexico-Canada Agreement (USMCA) removes duties from many import and export transactions between the three North American countries.
  • Low shipping costs and quick transit times make maquiladoras an attractive option for U.S. businesses.

In this article, we’ll take a close look at each of the benefits that maquiladoras have to offer U.S. manufacturers.

Duty-Free Importing and Exporting

Some of the most significant benefits of maquiladoras are a result of the USMCA, which replaced NAFTA in July 2020. This trade agreement did away with most tariffs on imports and exports between the U.S., Canada, and Mexico. With these fees removed, more businesses are able to profitably manufacture and transport merchandise. 

More Affordable LaborAffordable Labor Rates

To qualify for duty-free import and export, shipments must be accompanied by a USMCA Certificate of Origin. This document confirms the goods are sourced from one of the three countries participating in the agreement.

Since 2009, China’s labor costs have steadily risen above those of Mexico. 

For the purposes of determining minimum wage, Mexico is divided into a general area and the Northern Border Free Zone. In the table below, I’ve laid out these wages in MX$ and USD.

Daily Mexican Labor Rates in 2024

RegionDaily Wage Average in MX$USD Equivalent per Day
Northern Border Free Zone$375$19.49
General $249$12.94
Source: payroll.com

The result is that Mexico’s labor rate is now competitive with the Asian manufacturing powerhouse. Combine that with the ongoing trade war between the U.S. and China, and Mexican manufacturing becomes a go-to option for businesses looking for inexpensive labor. 

Quick Product Deliveries

The proximity of many maquiladoras to the U.S. means shipping times are far lower than they would be coming from an overseas manufacturer. 

Maquiladoras located close to the U.S. border can often deliver their finished goods to the border states of California, Arizona, New Mexico, and Texas in just a few hours.

Looking to ship materials to a maquiladora? R+L Global Logistics handles truckload shipping across the border. Let us know when and we’ll handle the rest.

Lower Shipping CostsLower Shipping Costs

Another benefit of the close geographical distance between the U.S. and maquiladoras in is reduced shipping costs. With a shorter distance to travel, less fuel and labor is needed to deliver products. 

Cargo and freight insurance costs will also be lower than comparable rates on ocean-going shipments due to shorter transit times and fewer opportunities for accidents to occur.

Maquiladora Tax Benefits

In addition to benefits associated with reduced duties and tariffs, here are several more conventional tax benefits for stateside companies who decide to shift manufacturing duties to a maquiladora. 

  • Lower Property Taxes: Mexican property taxes on maquiladoras are significantly lower than corresponding taxes on manufacturing plants in the USA. This allows businesses to keep more profits to re-invest into their operations.
  • No Income Tax: When operating under a shelter program, a U.S. company will not be considered to have a permanent residency for up to four years, meaning they won’t have to pay Mexican income tax.
  • Value Added Tax (VAT) Credit: The 16% VAT assessed on goods imported into Mexico is refunded upon the exportation of the finished products.

Lastly, businesses can get a tax deduction of 47-53% on employee benefits such as pensions and other bonuses.

Related: Shelter Companies in Mexico: A Complete Guide

Transporting Your Manufactured Goods with R+L Global Logistics

Are you ready to start manufacturing in Mexico? If so, an important part of this process is separate from the manufacturing itself. You’ll need a logistics company that understands the complexities of moving freight across international boundaries. That’s where R+L Global Logistics comes in.

From clearing customs to transporting your cargo and everything in between, we have over 30 years of experience and knowledge in managing cross border freight. Our services simplify the international shipping process.

Call us today at (866) 335-0495 or contact us online to receive a quote for your cross border freight or to learn more about how we can help you.

Share This Article
Copy URL to Clipboard

One comment on “Benefits of Maquiladoras”

  1. Looking for manufacturing consulting company that can be the go between us in the US and Mexico any recommendations would be greatly appreciated.

Leave a Reply

Your email address will not be published. Required fields are marked *

© Copyright 2024 R+L Global Logistics. All Rights Reserved
Get My Freight Quote  >