Given the competitive nature of the global environment for manufacturing, Mexico has rightfully drawn the interest of companies that are seeking to optimize their ability to expand their bottom lines.

In order to start-up a maquiladora production facility there are certain defined steps that must be taken to get a manufacturing operation south of the border operational. The information below pertains to the initiation of activities in a “wholly-owned subsidiary” scenario in the State of Chihuahua. Companies wishing to operate in Mexico under the auspices of a “shelter service company” do not follow the process as delineated below. The shelter service provider handles all the tasks necessary to get the manufacturer “up and running” in Mexico.

Obtain permission to use the corporate name for a maquiladora production facility in Mexico, and choose a notary public through the portal tuempresa.gob.mx

It is a requirement of the Mexican federal government that a prospective maquiladora production facility in Mexico choose and book a corporate name for its company.

The future employer must be registered in the portal tuempresa.gob.mx. The company principals must file an Advanced Electronic Signature and enter the corporate name in to the site’s database for the purpose of checking availability. If the chosen name is available for use, it can then be reserved. If unavailable, the request to use the name will be rejected.

This process is spelled out in Mexico’s General Corporations Law, the Organic Law of the Federal Public Administration, the Foreign Investment Law and the Regulations for the Authorization for Use of Business Names.

Once the name is reserved and is selected, it must be verified by a Mexican notary public, who can also help company principals to develop a corporate charter. (online)

Subsequent to the aforementioned, notice use of the use of the chosen corporate name must be sent to Mexico’s Ministry of Economy. Also, a record of the formation of the company must be prepared and provided to Federal Taxpayers Registry (RFC) in the Tax Administration Service (SAT).

This procedure is done as per defined legal statutes. Upon receipt of authorization for use of the company name, the Mexican notary proceeds to report the use of corporate name, and as well as write the articles of incorporation for the maquiladora production facility to be duly signed by the enterprises principals. The founding general partners must then provide their personal data and present their official identifications and Bonds Tax ID. Some notaries in the city signed an agreement with the Ministry of Finance through the Tax Administration Service (SAT) as well as register the company in the Federal Taxpayers Registry (RFC).

This process is spelled out in Articles 24 to 27 of the Rules for the Authorization for Use of Names and Social Reasons; Articles 5 and 6 of the General Corporations Law; Section 27 of the Fiscal Code of the Federation; and Regulation 19 and 20 of the Fiscal Code of the Federation; and Rule II.2.3.1. of the Omnibus Tax, effective in 2013.

The next step in the process of beginning to set up a maquiladora production facility in Mexico consists of signing the charter at the Public Registry of Commerce.

This procedure is intended to make the act of incorporation public and is mandatory.

To perform the procedure, the company must present:

a. Charter duly notarized;
b. Precoded Form M-4;
c. Digital media containing both documents;
d. Payment of fees.

The Mexican notary public with whom the company has chosen to work must make the payment of fees to the Public Registry and present the requirements on the reception window. This procedure is then validated by a duly empowered public officer.

The process is defined in Article 92 of the General Law of Commercial Companies; Articles. 18 to 20 of the Commercial Code; and Article 52, Section I of the Law of the Public Registry of Property of the State of Chihuahua, which came into force in 2013. The basis of the cost is in the Section IV, Paragraph 25 of the Rate for the Collection of Fees for Fiscal Year 2013 Schedule of Revenue Act for the State of Chihuahua for Fiscal Year 2013; and the Articles 6 and 28 of the Tax Code of the State of Chihuahua, in force in 2013.

Join the Business Information System (SIEM)

It is compulsory that all maquiladora production facilities in Mexico register annually and update the SIEM.

This can be done by visiting the appropriate website. http://www.siem.gob.mx/

Registration can be accomplished in three manners: through a SIEM representative’s visit to the establishment, by doing so at the local SIEM office, or through registered mail, fax or email; Certified representatives of the maquiladora production operation facility can record the information, and make the appropriate payment. Also, company representatives must provide corresponding North American Industry Classification Code (NAICS) number that corresponds to the type of manufacturing that will be done.

This process is defined in the Arts. 29 and 30 of the Law of Chambers and its Confederations of 2013. The basis of the cost is in the Article 31, Section I of the Law of Chambers and its Confederations force in 2013.

Registration on SIEM should be carried out through the Business Chambers registered with the Ministry of Economy, as they are the only ones operating the SIEM.

Obtain operating license through the Window System Rapid Business Start (SARE) or the Directorate General of Urban Development of the City of Ciudad Juarez

To perform the procedure, the company must provide:

a. 2 operating license applications LF01 duly completed and signed;
b. Copy both sides of the land use license that covers the rotation;
c. Original and copy of the official identification of the business owner;
d. Copy of current SIEM payment;
e. Copy of legal incorporation and/or to the representative of the company or of the person signing the application;
f. Copy of the official who signs the application identification;
g. Official letter from the company for the processing authority;
h. Copy of official identification processing authority.

A representative of the business must go to the Window System Rapid Business Start (SARE) or the Directorate General of Urban Development of the City of Juarez to make payment. The office will issue a business license for the maquiladora production facility in or before a five day period.

Join the Mexican Social Security Institute (IMSS)

Information on how this is done can be found on the IMSS website. Joining the Mexican Social Security System is mandatory.

Company registration in the State Register of Taxpayers with the Ministry of Finance of the State of Chihuahua

All companies operating as a maquiladora production facility in the State of Chihuahua must pay payroll taxes on worker salaries. To register to pay Chihuahua state payroll taxes, companies must register in the State Register of Taxpayers.
To perform the procedure, the user must have:

a. Proof of registration with the Mexican Institute of Social Security;
b. Copy of the company’s charter;
c. Federal Tax ID;

Once all of the above items have been taken care of the maquiladora production facility in Mexico can begin its operations.

Contact the author of this article with questions or to ask for clarification on any of the aforementioned processes and points. Also, inquire as to how operating under the auspices of a shelter company in Mexico can reduce bureaucratic burdens and streamline operations.