The United States and Mexico established this program in 1964.

A Maquiladora gives you offshore capability close to home resulting in: Cost Reduction Extensive Supplier Base Lower Unit Cost Central Distribution Reduced Capital Exposure Faster Startup One Day Access for Support Stateside Accommodations Lower Shipping Cost.

Absolutely not. A major advantage of Mexico is it’s proximity to the U.S. market, an easily trainable work force, and fully factory burdened operating rates of less than $5.00 to $10.00 U.S. per hour, depending on the technology required. Turnaround time for finished product in Mexico varies from two days to two weeks, versus the six week pipeline you have to consider when dealing with the Orient. Also, you do not have to contend with the enormous time differences. Further, the cost effectiveness of a “twin plant” operation should receive close study. This would allow the location of a highly automated and technical operation on the U.S. side of the border (if cost and technology considerations warrant), to act as a feeder plant for the Mexican operation. The Maquiladora would then do final assembly. Processes can be divided to maximize the efficiency of both locations. McAllen, Texas offers a plentiful supply of both skilled and unskilled workers. Additionally, an extensive supplier base exists on both sides of the border. Am-Mex Products, Inc offers shelter manufacturing in McAllen Texas and Reynosa, Mexico.

All necessary raw materials and equipment (including test equipment) for assembly of your product, including chemicals, packing materials and other direct and indirect materials.

No. The Maquiladora industry regulations allow the importation of the above items, in-bond, duty free. In November of 2000 duties were levied on raw materials originating from outside North America. These duties on material with non-NAFTA content varies from industry to industry and in many cases are excluded from duty via PROSEC provisions (industry specific duty relief – applies to automotive industry, electronics, and others).

Duty is charged only on non-NAFTA components and value added (labor, overhead, etc.) in Mexico. PROSEC mitigates or eliminates many duties in many assemblies.

Non-Nafta components are dutiable every time they enter the U.S. Therefore, if you import them into Mexico directly, or in-bond throughout the States, you can avoid paying duty until you make the final exportation from Mexico as finished product. It should be noted here that McAllen has a duty free foreign trade zone which is used by several companies as an effective distribution center for their product. Raw materials or finished product may be held in-bond in a bonded warehouse. Duty is not payable until the goods are released into the U.S. market. This is especially important for product which is to be exported. Payment of U.S. duty is completely avoided if the finished goods are for export from the U.S. If the product is intended for domestic US distribution it may be excluded from duty via PROSEC provisions as well, depending on the industry and amount of non-NAFTA content.