IMMEX stands for Maquiladora, Manufacturing and Export Services Industry. This is a program created by the Mexican government to attract and promote foreign investment. Generally, an IMMEX, or maquiladora, can temporarily import into Mexico goods that undergo a manufacturing, transforming, and/or repairing of the industrial process for subsequent export. The Mexican government promotes and makes this program attractive for foreign investors by offering a 100% reduction of the applicable tax and customs duties, such as the Value Added Tax (VAT), Product and Services Special Tax (IEPS), and the applicable import/export customs duties. However, the 100% reduction and benefits do not come along with the IMMEX program authorization. Depending on the specific good, the industry sector, the role an IMMEX plays during the manufacturing, transformation, and/or repairing process, among other factors, it may be required to obtain additional certifications, programs, and/or permits, such as the following:
I. NEEC Certification
This is the Mexican version of the United States C-TPAT, and stands for New Scheme for Certified Companies. IMMEX may apply for a NEEC certification, and in addition to the tax and customs benefits they already receive, NEEC may allow them to perform their daily operation under a more simplified administrative process, as well as expedite the customs clearance of the goods. Additionally, in some specific cases, when a maquiladora has filed incorrect information about its customs operations, NEEC gives them the opportunity to correct the error without penalties. To obtain this certification, companies must show clear evidence of fiscal tax obligations met, as well as customs and security compliance, among other requirements.
II. A, AA and AAA Certification
IMMEX are now required to pay a 16% Value Added Tax (VAT) and a 26% – 160% Product and Services Tax (IEPS) over the customs value of the goods they import into Mexico. However, if a maquiladora obtains the A, AA or AAA certification, it may receive customs benefits, and a 100% refund/credit for the VAT and IEPS paid for its importations. The three different categories of certification are for those importers that accomplish and show evidence of specific administrative, legal, customs and fiscal compliance on their daily customs, business and trade operations. Depending on the maquiladora’s level of compliance, number of employees, volume of their exports/imports, investment, shares/stocks, capital assets, among other factors, the A, AA or AAA certification may be granted. Maquiladoras showing a higher level of compliance, and a higher volume on their operations, assets, investment, etc. can obtain the AAA certification, which provides greater advantages and benefits to the applicants. As long as the IMMEX continues to show a qualified level of compliance, the A, AA or AAA can be renewed.
Prosec stands for Industry Sector Promotion Programs, and allows Mexican companies, including IMMEX, to import specific materials to be used for the production of specific goods. Depending on the imported materials and the produced good, the applicable import duty can be reduced in some cases to 0%. The Harmonized classification code of the imported materials and produced goods must be listed under the law, and must be included under specific industry sectors such as electric, electronic, furniture, toys, mining, chemical, and wood, among others.
IV. Regla Octava
This is the Rule Eight which allows companies, including IMMEX of specific industry sectors to import into Mexico parts, components, machinery, equipment and other merchandise related to their production process. Goods imported under this rule receive a preferential import duty treatment of 0%. IMMEX wanting to obtain this benefit must first evidence that its IMMEX and PROSEC programs are in compliance and effectively operating. Additionally, prior to the importation, the maquiladora must request a special permit (permiso previo) with the corresponding Mexican authorities.
V. Free Trade Agreements
Free Trade Agreements may also help IMMEX reduce the applicable import/export customs duties. This depends on the origin of the materials imported into Mexico. One of the main agreements is NAFTA (North American Free Trade Agreement), which allows entities located in the NAFTA territory (Mexico, Canada and the United States) to import NAFTA originating materials from the territory of one NAFTA Party into the territory of another NAFTA Party at favorable duty rates. To determine if an IMMEX can benefit from NAFTA, or any of the free trade agreements, a detailed analysis of the applicable rules of origin should be conducted.
In order for an IMMEX, or maquiladora, to obtain, maintain, and renew the foregoing permits, authorizations and/or certifications, which gives them access to fiscal, customs and administrative incentives and benefits, they must first show evidence of compliance within their daily operations. The compliance requirements may vary depending on the merchandise to be imported or exported, the industry sector, the specific role the maquiladora plays during the importation, exportation, and production process, among others. Before applying or renewing any of the above, a company must perform a critical analysis and assessment of the company’s records and operations.