Begun in 1966 as a way to spur Northern Mexico's economy, maquiladoras are Mexican corporations that assemble imported components for export to other countries (usually the U.S., but increasingly European and other nations).

Maquilas have special privileges that make them attractive to an offshore manufacturer. They are currently allowed to temporarily import raw materials and equipment without duty, and they enjoy simplified customs procedures. As one of 100 companies “certified” by the Mexican Customs service, Offshore Group clients are recipients of special consideration when transacting shipments across the U.S.- Mexico border.

There are three common business structures for manufacturing in Mexico: (any one of which can qualify for a maquiladora permit)

Wholly-Owned Subsidiary

U.S. or foreign company owns 100% of the stock of the Mexican corporation

Advantages

Maintain complete control over and responsibility for all aspects of Mexican operations.

Shelter Program

Rapid start-up (less than three months)
Reduced capital investment
Reduced legal exposure
Diminished labor risk
Full focus on core competencies
Economies of scale that result in savings
Immediate acquisition of skill sets necessary to operate in Mexico
Reduced Vulnerability to key employee turnover
Flexible contracts

Contract Manufacturing

Advantages

Exposes foreign manufacturer to the least amount of risk
Appropriate choice for operations requiring small amount of labor