IMMEX

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MANUFACTURING, MAQUILA AND EXPORT SERVICES INDUSTRY

Given the fierce competition for global markets, it is vital for Mexican businesses to have, at least, the same conditions offered by our main competitors, to allow them to successfully position their goods and services in the international trade arena.

With this purpose, on 1 November, 2006 the Federal Government published the Decree for the Promotion of the Manufacturing, Maquila and Export Services Industry (The IMMEX Decree), aimed at increasing the competitiveness of the Mexican export sector, and bringing certainty, transparency and continuity to companies' operations, specifying and simplifying the compliance factors; allowing companies to adopt new ways of operating and doing businesses; reducing its logistics and administrative costs; and modernizing, streamlining and reducing procedures, with the purpose of increasing the capacity of audit in an environment which encourages the capture and retention of investments in the country.

This instrument integrates the programs for the Development and Operation of the Maquiladora Industry of Export and the program that establishes The Temporary Import Programs to Produce Goods for Export (PITEX), whose companies represent jointly 85% of Mexico's manufactured exports.

 

GENERAL ASPECTS

Definition:

The IMMEX Program is an instrument which allows the temporary importation of goods that are used in an industrial or service process intended to produce, transform or repair foreign goods imported temporarily for its subsequent export or the provision of export services, without covering the payment of the general tax for import, the value added tax and, where appropriate, the countervailing duties.

Beneficiaries:

The Secretariat of Economy (SE) shall authorize the legal entities resident in national territory referred in the Fraction II of the Article 9 of the Fiscal Code of the Federation, which are taxed according to Title II of the Income Tax Law, one only IMMEX program, which can include the following categories: holding, industrial, services, shelter and outsourcing companies, providing they meet the requirements set forth in the Decree for the Promotion of the Manufacturing, Maquila and Export Services Industry (IMMEX Decree) published in the Official Gazette of the Federation on 1 November, 2006.


Benefits:

The IMMEX program provides holders the possibility to import, temporarily free of import tax and the Value Added Tax, the goods necessary to be used in an industrial process or service to produce, oriented to transform or repair foreign goods temporarily imported for its subsequent export or the provision of export services.

These goods are classified as follows:

1. Raw materials, parts and components which are to be totally integrated into export goods; fuels, lubricants and other materials for consumption during the production process of export goods; containers and packaging; labeling and leaflets.

2. Shipping containers and boxes.

3. Machinery, equipment, tools, instruments, molds and spare parts for the production process; equipment and devices for contamination control, research or training, industrial security, telecommunications and computing, laboratory, measurement, product testing and quality control; and those involved in handling materials directly related to export goods and others linked to the production process; and administrative development equipment.


Categories:

1. IMMEX Holding Companies Program: the manufacturing operations of a certified holding company and one or more subsidiaries are included in the same program;

2. IMMEX Industrial Program: goods are manufactured or transformed for subsequent export through an industrial process;

3. IMMEX Services Program: export goods are serviced or export services are provided, solely to develop those activities established by the Secretariat of Economy, following review by the Secretariat of Finance and Public Credit;

4. IMMEX Shelter Program: one or more foreign companies provide the technology and the production material, without having any direct involvement in the Program, and

5. IMMEX Outsourcing Program: a certified company lacks the facilities to perform production processes itself and performs the manufacturing operations through a third party who it registers in its Program.stos bienes están agrupados bajo las siguientes categorías:

Simultaneously, the Secretariat of Economy may approve a Sectoral Promotion Program based on the type of products manufactured or the export services made, in which case the applicable regulations must be followed. In the case of a service company, only goods referred to in Article 4, Fraction III of this Decree, may be imported under the Sectorial Promotion Program, whenever they belong to the sector in which it is registered.

 

Duration:

The IMMEX Programs will remain valid while the holder continues to meet the requirements for authorization and the obligations established in the Decree.

Permanence terms:

Those goods imported temporarily under an IMMEX program may remain in national territory for the established terms in Article 108 of the Customs Law.

When goods mentioned in Annexes II and III of the IMMEX Decree are imported as raw materials, the length of permanence shall be up to twelve months. In the case of goods included in Annex III of the IMMEX Decree, when they are imported as raw materials, and only when they are destined for activities classified as services, the length of permanence will be up to six months.

The goods mentioned in Annex I of the IMMEX Decree may not be imported under the Program.


Commitments:

In order to enjoy the benefits of an IMMEX program the terms established in the Decree must be fulfilled. The authorization of the Program will be granted under the commitment to have annual sales abroad of at least US $500,000 or an equivalent sum in Mexican pesos, or invoice exports accounting for at least 10% of its total invoices.

Reports:

The holder of an IMMEX program must submit an annual electronic report of total sales and exports for the immediately preceding tax year, no later than the last business day of May, according to the form announced by the Secretariat of Economy through the General Rules and Criteria on Foreign Trade.

In addition, the company with an IMMEX program shall submit the information that, for statistical purposes, is determined under the terms established by the Secretariat of Economy in the General Rules and Criteria on Foreign Trade.

For more information about the program please call 01 800 410 2000 throughout the country or at the Citizen Contact Center of the Secretariat of Economy via mailbox at http://www.economia.gob.mx/conoce-la-se/atencion-ciudadana; or contact Sergio Manríquez Fernández, Underdirector of Tax Refunds at 52-29-61-00, ext. 34347.

 

PROCEDURES

Operation:

All procedures relating to the IMMEX Program are free and can be done at the public service windows of the federal agencies of the Secretariat of Economy corresponding to the address of the plant where the production process or service is carried out.

Interested parties can apply for the following procedures:
 


A) New Program

Fill out the application in the IMMEX.EXE* program and submit it on magnetic disc or CD with two printed copies, duly completed. The applicant must have the following requirements:
 

1. Certificate of Advanced Electronic Signature from the SAT.

2. Active Federal Taxpayers Registration.

3. The registered address and premises where the operations are carried out under the Program must be registered and active in the Federal Taxpayers Register.


Also, the following documentation must be attached to the application:
 

1. Certified copy of the company's Articles of Incorporation and, where appropriate, its amendments.

2. Copy of the document legally certifying the possession of the property where the IMMEX program operation is intended to take place, specifying its location and attaching photographs of the property. If the property is leased or loaned, it must be proved that the contract establishes a mandatory period of no less than one year and that a minimum of eleven months remains of that period, on the date the application is filed.

3. Maquila contract, purchase contract, purchase orders or confirmed orders, which prove the existence of the export project.

4. Corresponding Power of Attorney (original or certified copy and single copy); or exhibit a copy of the Central Register of Accredited Persons (Registro Único de Personas Acreditadas or RUPA, by its acronym in Spanish).

5. Free format letter detailing the production process or services referred to in the program application.

6. In the case of goods referred to in Article 4, Fraction I of the Decree for the Promotion of the Manufacturing, Maquila and Export Service Industry** (IMMEX Decree), a letter detailing the production process or service which includes the installed capacity of the plant to process the imported goods or perform the service covered by the program and the percentage of that capacity actually used.

7. Letter of conformity from the company or companies which perform the sub-manufacturing process stating under oath the joint liability for the temporarily imported goods (original).

8. In addition, for the IMMEX Holding Company programs, submit:

 - Minutes of the shareholders meetings, stating the shareholding of the holding company and subsidiaries (original and copy).

 - The certified entries in the shareholders register (copy).

 - The documentation referred to in items 1, 2 and 5 of this section, as well as a copy of the tax identification card. This documentation must be submitted for the holding company and each of the subsidiary companies, and

 - The maquila contracts that each subsidiary company has with the holding company or a maquila contract which establishes the obligations contracted, for the holding company and the subsidiary companies in relation to the objectives of the requested program, duly notarized (original and copy), and

 - The Authorization as a certified company (copy), given by the Secretariat of Finance and Public Credit.

9. In addition, for the IMMEX Outsourcing Program, submit:

 - Letter of conformity from the company or companies which will perform the outsourcing, stating under oath the joint liability for the temporarily imported goods (original).

 - Company or companies requesting the Outsourcing program must be approved by the Secretariat of Finance and Public Credit as a certified company.


10. Companies in the textile and clothing sector requesting the IMMEX program authorization for the temporary import of goods included in the tariff headings of the General Import and Export Duties Law which are mentioned in Annex III of the IMMEX Decree, exclusively for the production of goods classified in Chapters 50 through 63 and sub-paragraph 9404.90 of the aforementioned Tariff (Manufacture of textile, textile products and clothing inputs), must attach the following documentation:

 

I.- Registered Public Accountant's Report, which certifies:

The location of the registered address and the premises where the operations covered by the IMMEX program are carried out;


The machinery and equipment to perform the industrial process;


The installed production capacity to carry out the monthly industrial process, in eight-hour shifts;


The products it manufactures, and

 
The number of workers of the company holding the IMMEX program and, where appropriate, of each of the companies which perform sub-manufacturing activities.


II.- Free-form Letter from the legal representative of the company stating the projected exports in dollars for the six months following the start of operations.


The IMMEX.EXE program can be obtained from the following Internet address: www.economia.gob.mx/?P=777 or directly from the public service windows, presenting four high-density magnetic discs or a CD.
 

Extension of the Program

Fill out the application in the IMMEX.EXE program and submit it on magnetic disc or CD, with two duly completed, printed copies.


1. The extension of the IMMEX Program for non-sensitive products. Companies from the textile and clothing sector who request extension of an IMMEX program for the first-time temporary import of goods covered in the Tariff headings of the General Import and Export Duties Law, which are mentioned in Annex III of the IMMEX Decree, exclusively to produce goods classified in Chapters 50 through 63 and sub-paragraph 9404.90 of the aforementioned tariff  (manufacture of textile, textile products and clothing inputs), must attach the following documentation:

2. Registered Public Accountant's Report, which certifies:

3. The location of the registered address and the premises where the operations covered by the IMMEX program are carried out;

4. The machinery and equipment to perform the industrial process;

5. The installed production capacity to carry out the monthly industrial process, in eight-hour shifts;

6. The products it manufactures, and

7. The number of workers of the company holding the IMMEX program and, where appropriate, of each of the companies which perform sub-manufacturing activities.

8. Free-form Letter from the legal representative of the company stating the projected exports in dollars for the six months following the start of operations.

9. The extension of the IMMEX program for sensitive products. Companies seeking an extension to import goods included in the Tariff headings in the General Import and Export Duties Law, which are mentioned in Annex II of the IMMEX Decree, must attach the following documentation to the application.

A free-form letter specifying:

Details of the goods to be imported:


1. Tariff heading and unit of measurement, according to the Tariff.

2. Maximum import volume for the year and its value in dollars.

3. Details of the end product to be exported, which will be manufactured using the goods referred to in the previous item 1, above, providing the following information for such purposes: 

Description: as it should be provided on the export declaration. The description should relate to the commercial description on the invoice and the tariff heading and unit of measurement, according to the tariff.

Registered public accountant's report specifying:

1. The location of the registered address and the premises where the operations covered by the IMMEX program are carried out;

2. The machinery and equipment to perform the industrial process;

3. The installed production capacity to carry out the monthly industrial process, in eight-hour shifts;

4. The products it manufactures, and

5. For goods listed in Annex II, Fraction I of the IMMEX Decree, documentation must also be submitted proving that the petitioner is within the Federal Inspection System Type (Sistema Tipo de Inspección Federal or TIF), its refrigeration capacity and, where appropriate, its freezing capacity, and the document proving the petitioner has the import authorization issued by the country to which the transformed product will be exported.

6. Subsequent extension of the IMMEX program for sensitive products. Where a subsequent extension is sought for the temporary import of goods included in the tariff heading of the General Import and Export Duties Law (Tarifa de la Ley de los Impuestos Generales de Importación y de Exportación or TIGIE) indicated in Annex II of the Decree for the Promotion of the Manufacturing, Maquila and Export Services Industry, the following documents must be attached to the application:

I. Free-form Letter specifying details of the goods to be imported: tariff heading and unit of measurement, in accordance with the tariff, and maximum import volume for the year and its value in dollars.

II. Report signed by the legal representative of the company, indicating:

 - Volume of imported goods under the previous authorization of the goods covered in Annex II of the IMMEX Decree.

 - Volume of products manufactured with the imported goods referred to in the previous item, specifying the number and date of the return declarations.

 - Volume of shrinkage and waste relating to industrial processes.

 - Amount of each material, in terms of the unit of measurement in accordance with the tariff, used in the production processes, indicating the shrinkage percentage.

Extension of IMMEX program for the registration of service activities. No additional documentation is required with the application.

Extension of IMMEX program of a determined amount to textile and clothing sector companies. The textile and clothing sector companies which import goods included in tariff headings of the General Import and Export Duties Law, mentioned in Annex II of the IMMEX Decree, exclusively for the production of goods classified in Chapters 50 through 63 and sub-paragraph 9404.90 of the said tariff (manufacture of textile, textile products and clothing inputs), may extend the amount for the temporary import of these goods, by submitting a free-form Letter, in accordance with the following:

 

I.- Companies referred to in Fraction I of rule 3.4.8 of the Agreement in which the Secretariat of Economy issues rules and criteria in foreign trade matters,  can be justified by one of the following modes:

1. Leverage of idle installed capacity, including, where appropriate, that of those companies performing sub-manufacturing activities, or

2. Extension of their own installed capacity or, where appropriate, of each of the companies performing sub-manufacturing activities.

II.- Companies referred to in Fraction II of rule 3.4.8 should specify the percentage of additional use of the idle installed capacity or of extension of installed capacity for the next six months.

Program Adjustment

Register of sub-manufacturing companies: Free-form Letter making the request, specifying the following information of the company to be registered as a sub-manufacturer: name, company or business name, Federal Taxpayers Registration and complete registered address and full address of the plant, attaching:

1. Letter of joint and several liability of the company which performs the industrial processes or services directly related to the manufacturing operation of the company holding the IMMEX program (original and copy).

2. Evidence of registration with tax identification card or evidence of registration to the Federal Taxpayers Register corresponding to the entity which will perform the sub-manufacturing operation (original and copy).

3. Change of program category: free-form Letter stating the request indicating the change of category required. In addition, specify the following information according to the change of category:

4. Industrial, specify the products to be manufactured, as well as the corresponding tariff according to the General Import and Export Duties Law;

5. Services, specifying the new activities the company will perform with the program;

6. Shelter, specifying the name and address of the foreign companies which will facilitate technology to the company holding the program and the production material to be used;

7. Outsourcing, specifying the name, the Federal Taxpayers Registration and complete address of the plant belonging to the companies to be outsourced to;

8. Holding companies, specifying the name, the Federal Taxpayers Registration and the address of the subsidiary companies.

Documents which should be attached to the application:

To request the change to Industrial, Shelter or Service categories:

1. Copy of the document legally certifying possession of the premises where the operation under the Program is intended to take place, specifying the location and attaching photographs of the premises, when this information differs from the information originally provided (original and copy).

2. Maquila contract, purchase contract, purchase orders or confirmed orders, which prove the existence of the export project, in relation to the new category (original and copy).

3. Free-form Letter explaining the production process or services to which the program application refers (original and copy).

4. In the case of goods referred to in Article 4, Fraction I of the Decree for the Promotion of the Manufacturing, Maquila and Export Service Industry, a letter describing in detail the production process or service which includes the installed capacity of the plant for processing the goods to be imported or to perform the service in question and the percentage of this capacity actually used, when this information differs from the information originally provided (original and copy).

To request the change to the category of Holding Company, the following must be submitted in addition to the requirements for Industrial, Shelter or Services:

1. Minutes of shareholders meetings proving the shareholding of the holding company and the subsidiaries (original and copy).

2. The certified entries in the shareholders registration book (original and copy), the documentation referred to in items 1, 2 and 5 of the new program section, as well as the copy of the tax identification card. These documents shall be presented for the holding company and for each of the subsidiaries, and

3. The maquila contracts that each subsidiary has with the holding company or a maquila contract in which the contracted obligations are established for the holding company and for the subsidiaries in relation to the objectives of the requested program, duly notarized (original and copy). 

4. The authorization as a certified company (original and copy) granted by the Secretariat of Finance and Public Credit. 

To request the change to the Outsourcing category, in addition to the requirements for Industrial, Shelter or Services, the following documents must be presented: Letter of compliance from the company or companies which will carry out the outsourcing process containing a sworn statement accepting joint and several liability for the temporarily imported goods (original and copy).

1. Register of the companies to which the services will be provided: free-form Letter making the petition including the following information on the companies to which the services will be provided, such as: company or business name, Federal Taxpayers Registration number,  full address of the plant and IMMEX registration number. Additional documentation is not required.

2. Register of subsidiaries. Free-form Letter making the petition for registration of new subsidiaries by the holding company with the IMMEX program, including company or business name, Federal Taxpayers Registration number, registered address and address of the plants, amount of exports in dollars of the previous year and, where applicable, the program number of each of the companies to be registered. The following documentation must be attached: 

 a) Minutes of shareholders meetings containing the shareholding of the holding company and the subsidiaries (original and copy).

 b) Contracts held by each subsidiary with the holding company or a contract which establishes the obligations contracted by the holding company and the subsidiaries in relation to the objectives of the program, duly notarized (original and copy). 

 3. Registration of outsourced companies: free-form Letter making the request, including the following information of the outsourced companies to be registered: company or business name, Federal Taxpayers Registration number and full address of the plant. The following documentation should be attached:

 a) Letter of compliance from the company which will perform the outsourcing containing a sworn statement accepting joint and several liability for the temporarily imported goods (original and copy). 

 4. Change, addition or removal of registered addresses and plants: free-form Letter making the petition, notifying the change, addition or removal of registered address or plants, specifying the full address. 

Suspension of the Program. If activities are suspended, a temporary suspension of the benefits granted by the IMMEX program should also be requested by submitting a free-form letter expressing and explaining the reasons for the suspension (original and copy).

Cancellation of the Program. If it is taken a decision to cancel the IMMEX program, a free-form letter should be submitted to that effect (original and copy).

Annual Report of Foreign Trade Operations. Only available through the website of the Secretariat of Economy: http://www.economia.gob.mx, annual report. This procedure is for notification purposes only and does not generate a response from the Secretariat of Economy.

Inventory Control. The holder of the program should keep an automated inventory with the minimum information referred to in Annex IV of the IMMEX Decree. 

 

Regulations

Legal Framework

1. Decree for the Promotion of the Manufacturing, Maquila and Export Services Industry, published in the Official Gazette of the Federation on November 1st, 2006.

2. Customs Law and its Regulations

3. General Rules on Foreign Trade Matters.

4. Federal Law on Administrative Procedure.

5. Foreign Trade Law and its Regulations.

6. Internal Regulations of the Secretariat of Economy.

7. Agreement through which the Secretariat of Economy issues General Rules and Criteria on Foreign Trade, and their amendments.

8. Agreement which establishes the procedures entered in the Federal Register of Business Procedures which apply to the Secretariat of Economy and its Coordinated Sector.

9. Agreement amending the miscellaneous provisions which approve the forms to be used for procedures before the Secretariat of Economy, the National Metrology Center, the Mineral Resource Council, the Mining Development Trust and the Federal Consumer Protection Agency and their reforms.

10. Agreement which establishes the procedures entered in the Federal Register of Procedures and Services which apply to the Secretariat of Economy and the decentralized agencies and regional offices of the sector.

11. North American Free Trade Agreement.

12. Ruling which establishes the general rules related to the application of customs-related provisions of the North American Free Trade Agreement and their reforms.

 

PROVISION OF THE NAFTA

As established since 2001 by the North American Free Trade Agreement (NAFTA), in order to avoid distortion of the preferential tariffs agreed under the aforementioned agreement in member countries, the IMMEX program is subject to the following:

a) The formula established in Article 303 of the NAFTA shall apply to inputs which do not originate from North America and are incorporated to a good which will be exported to the United States or Canada.

In accordance with the formula, only the lowest tariff amount can be exempted, which results from comparing the tariff amounts of the inputs imported to Mexico and the tariff amounts paid in the United States or Canada for the finished product.

b) Article 304 of NAFTA prohibits member countries of the free trade zone from granting import tax exemptions to machinery and equipment subject to export.

Consequently, companies holding the IMMEX program must pay the import tax for the mentioned products.

Tariffs on inputs, parts, components, machinery and equipment imported to Mexico can be calculated based on rates established in the free trade agreements and trade agreements signed by Mexico, like MEFTA, Sectorial Promotion Programs and the 8th Rule, providing the relevant authorization has been given.

Programs for Sensitive Products

The Secretariat of Economy will determine those products (sensitive products) which cannot be imported under an IMMEX program or which need to meet specific requirements in order to do so.

Companies must adhere to the provisions established in the Agreement through which the Secretariat of Economy issues the General Rules and Criteria on Foreign Trade Matters.

Goods which cannot be imported under an IMMEX program are those included in tariff headings of the General Import and Export Duties Law (TIGIE), indicated in Annex I of the IMMEX Decree.

Goods subject to requirements are those included in the tariff headings of the TIGIE, indicated in Annex II of the IMMEX Decree.

To obtain authorization for the temporary import of goods considered ad sensitive, interested parties must submit their application through an IMMEX program extension, meeting the requirements established in the Decree, in addition to the following information:

I. Free-form Letter which specifies:

Details of the goods to be imported:

1. Tariff heading and unit of measurement, in accordance with the TIGIE

2. Maximum import volume for the year and its value in dollars.

3. Details of the final export product, to be produced with the goods referred to in previous item 1, above, providing the following information for those purposes:

4. Description: in the terms which should be indicated in the export declaration. The description should help relate it to the commercial description on the invoice, and

5. Tariff heading and unit of measurement, in accordance with the TIGIE

II. Registered Public Accountant Report which certifies:

1. The location of the registered address and the addresses where the operations under the IMMEX program will be performed;

2. The existence of machinery and equipment to perform the industrial processes;

3. The monthly installed production capacity for the industrial processes, per eight-hour shift, and

4. The products it manufactures.

III. For goods listed in Annex II, Fraction I of the IMMEX Decree, documentation should also be submitted which proves that the petitioner is within the Federal Inspection System Type (TIF), its refrigeration capacity and, where appropriate, its freezing capacity,  and the document proving the petitioner has the import authorization issued by the country to which the transformed product will be exported.

The ruling issued by the SE extending the authorization to import sensitive products under the IMMEX program, shall contain at least the following information:

I. Tariff heading of the goods to be imported, in accordance with the TIGIE;

II. Duration of the authorization, and

III. The maximum amount in the unit of measurement according to the TIGIE which can be imported.

The SE will respond within 10 working days following the submission of the application.

To obtain a subsequent authorization for sensitive products, the petitioner should attach the following to the application for extension:

I. Details of the goods to be imported:

1. Tariff heading and unit of measurement, in accordance with the TIGIE

2. Maximum volume to be imported for the year and its value in dollars.

II. A report signed by the legal representative of the company, indicating:

1. Volume of goods imported under the previous authorization of the goods included in Annex II of the IMMEX Decree;

2. Volume of the products made with the imported goods referred to in the previous item, mentioning the number and date of the return declarations;

3. Volume of shrinkage and waste corresponding to the industrial processes, and

4. Amount of each material, in terms of the unit of measurement according to the TIGIE, used in the production processes, indicating the percentage of shrinkage. 

A new authorization will proceed if the company has exported at least sixty percent of the volume of one of the following concepts:

I. The consignment under the previous authorization, as long as it has been exercised in full;

II. The result of the sum of authorizations issued in the previous twelve months, or

III. The volume actually imported, when not all the previously authorized consigned volume has been exercised and its duration has expired.

The maximum duration of authorizations shall be twelve months.

The maximum amount that the Secretariat of Economy will authorize for import will be an amount equal to twelve months' installed production capacity, according to the public accountant's report submitted by the company.

The duration of authorizations for extension and subsequent extension to import goods under the IMMEX program which are included in Annex II of the IMMEX Decree will be twelve months.

Pursuant to Rule 3.4.7 of the Agreement, companies with an IMMEX program which export their production in its entirety are excepted from compliance with the specific requirements for the temporary import of sensitive products. In addition, they may qualify for this benefit only when they have operated under these conditions for one year.