Manufacture and distribution

Manufacture and supply chain

What legal framework governs the development, manufacture and supply chain for fashion goods? What are the usual contractual arrangements for these relationships?

Commercial agreements

In Mexico, fashion goods are mainly regulated under a federal legal framework, governing labelling, sustainability, tax, customs and consumer protection, copyrights, trademarks and patents.

Contracts are governed by the Civil Code or the Code of Commerce, based on the nature of the agreement. As such, general principal distribution contracts are governed by the will of the parties and the terms of the agreement, as long as they do not contravene express mandatory laws. In this regard, the fashion industry does not have specific rules or laws to be complied with. To govern the development, manufacture and supply chain for fashion goods, the will of the parties and their relevant agreements will be observed.

Duties relief and export promotion programmes in Mexico

Mexico has diverse export promotion and duty relief programmes. These programmes aim to (1) encourage investments on manufacturing and projects for the provision of services by foreign companies, and (2) grant administrative, customs and tax benefits, which, along with the network of approved free trade agreements (FTAs), seek to increase competitiveness and create jobs in the country, including in the fashion industry.

IMMEX programme

The Manufacturing, Maquiladora and Export Services Industry (IMMEX) programme is the main export promotion programme run by the Ministry of Economy; it grants diverse fiscal, administrative and operational benefits to generate and incentivise foreign investment in Mexico.

The IMMEX programme aims to carry out manufacturing, transformation and repair activities. It allows the temporary importation of raw materials and machinery supplied by a foreign resident and relieves the payment of the import duties triggered by the introduction of goods in Mexico when such goods originate from a country with which Mexico has an FTA.

VAT certification

Since 2014, temporary imports are subject to a payment of VAT at 16%. The VAT certification is a benefit available to companies with an authorised IMMEX programme. With this regime, the beneficiary avoids paying the corresponding VAT for temporary importation of goods used in its manufacturing or repairing processes that will be eventually exported during the established legal terms.

Companies have access to three levels of VAT certification, depending on the size of investment in Mexico, as reflected by:

  • the amount of fixed assets imported and used in the manufacturing operation;
  • the number of employees hired; and
  • the years over which the requesting company has made investments and conducted production activities in the country.

VAT certification is a key step for companies interested in carrying out foreign trade operations, due to the cost saving entailed in the relief of VAT payment that would otherwise be triggered by the temporary import of goods. This therefore incentivises the possibility to increase operations in Mexico.

Programme of Sectoral Promotion

The Programme of Sectoral Promotion (PROSEC) was launched by the Ministry of Economy to encourage the development of certain key economic sectors in the country, such as automotive and auto parts.

In general terms, PROSEC allows a company in Mexico to import raw materials on a definitive or temporary basis at preferential tariffs to produce goods in its authorised sector without being obliged to use them for export; they may therefore be commercialised on the national territory.

Eighth Rule

The Eighth Rule is a permit of the Ministry of Economy used in conjunction with PROSEC to import raw materials for certain sectors, as well as equipment and machinery to produce finished goods. The main benefits of the permit are to classify imported goods under Heading 98.02 of the Tariff of the Law of General Import and Export Taxes, applying tariff preferences and reducing the administrative costs of tariff classification, as well as reducing the risks of incorrect customs tariff classification.

FTAs

FTAs are international instruments used by signatories to grant each other tariff preferences and mutual trade facilities without being obliged to extend them to other member states. In most cases, FTAs include investment protection procedures and policies, as well as dispute settlement mechanisms. Significant bilateral or multilateral agreements are aimed at regulating international trade between the signatory parties.

Mexico currently has 13 FTAs in force. This international legal framework grants Mexico a unique position to access the markets of around 50 countries at preferential rates, making it highly competitive. Mexico has FTAs with Colombia; Chile; Israel; the European Union; jointly with Iceland, Liechtenstein, Norway and Switzerland; Uruguay; Japan; Peru; Central America; Panama; and members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – currently Vietnam, Australia, Canada, Japan, Mexico, New Zealand and Singapore.

Undoubtedly, Mexico’s most important FTA is the United States–Mexico–Canada Agreement (USMCA); however, FTAs have been executed by Mexico with other countries in order to have mutual access to each other’s markets, applying preferential tariff treatments if the goods manufactured or exported comply with the relevant rules of origin established therein.

General rules of origin

'Rules of origin' are a series of requirements contemplated in an FTA, expressed as a minimum percentage of inputs originating in the signatory countries of the FTA at issue, so the product the inputs make up can be considered as originating from one of the FTA countries. This percentage is known as ‘regional content value’ and will be of utmost importance to identify the goods that can be considered as originating from an FTA country and consequently to be able to apply the tariff preferences contemplated in the treaty at issue.

As a general rule, FTAs consider it convenient to prove the origin of goods through documents called ‘certificates of origin’ signed by the exporters or producers of the originating goods.

Most FTAs establish that exporters and importers must prove the origin of a good produced with input from non-FTA parties in order to apply preferential tariffs. In this case, the product-specific rules of origin should be reviewed.

Customs administration and trade facilitation

The USMCA and the CPTPP incorporated an innovative chapter for trade facilitation between their signatories, including provisions of the World Trade Organization’s Trade Facilitation Agreement. The trade facilitation chapter aims to improve the flow of trade and customs between the countries by making it much faster, less costly, more efficient and seeking continuous enhancement.

With these new provisions, the parties have the possibility of issuing advance rulings to avoid setbacks and penalties for importers and exporters, who will have a supporting document from the customs authorities to facilitate trade across borders.

Likewise, the simplified customs clearance facility is granted for urgent shipments between Mexico, the United States and Canada, as well as to maintain a friendly foreign trade portal, which in Mexico was implemented as the Single Window for Foreign Trade. This allows administrative procedures to be more transparent, agile and without physical personnel intermediation, which in turn minimises corruption and provides equal opportunities for economic agents.

Environmental

From an environmental standpoint, manufacturing plants for the production of fashion goods are highly regulated, as such activities have a significant environmental impact. Therefore, the regulatory framework at the federal level is comprehensive and governed by statutes such as the General Law of Ecological Balance and Environmental Protection. This law, along with its accompanying regulations, addresses critical aspects such as environmental impact assessment, air pollution prevention and control, emission registration, pollutant transfer and hazardous waste management. Other federal laws, including the National Water Law, the General Law for the Prevention and Integral Management of Waste, the General Law for Sustainable Forestry Development and the Federal Law of Environmental Liability also play crucial roles in overseeing the industry's environmental impact and ensuring accountability for damages. The supply chain, by contrast, is not highly regulated from an environmental perspective.

Meanwhile, states and municipalities exercise regulatory authority in areas not exclusively reserved for the federal government. Their powers encompass:

  • overseeing environmental impact for activities falling outside federal jurisdiction;
  • managing water supplies and waste water discharges through local bodies;
  • managing and generating special waste and urban solid waste ;
  • regulating atmospheric emissions from non-federally reserved activities; and
  • addressing noise pollution.

Furthermore, in January 2026, Mexico enacted a new Circular Economy Law, which introduces a regulatory framework intended to ensure that products placed on the Mexican market align with circularity principles across their life cycle.

The law promotes the following concepts, among others:

  • value chain – activities enabling the integration of materials, products or waste into circular use, whether within the same production process or others;
  • life cycle – consecutive and interrelated stages from extraction and production through useful life, comprehensive waste management, circular use and final disposal;
  • responsible consumption – informed acquisition by final consumers, use and disposal of products considering their environmental and social impacts; and
  • circular design – product design that incorporates environmental footprint considerations and circularity mechanisms throughout the life cycle.

The Ministry of Environment and Natural Resources has to issue the regulations detailing how these obligations must be complied with in practice by 18 July 2026.

Consumer protection and competition

From a consumer’s perspective, the Federal Consumer Protection Law and its regulations establish the key provisions to promote and protect consumers’ rights and culture. To seek fairness, assurance and legal certainty in relations between suppliers, it also establishes the main requirements for how information is provided to consumers, ensuring that it is truthful, verifiable and exempt of texts, dialogues, sounds, images, trademarks, designations of origin and other descriptions that lead or may lead to mistakes or confusion by being either deceptive or unfair. For the purpose of this law, 'deceptive' or 'unfair' information or advertising is understood as referring to characteristics or information related to any good, product or service that, either truthfully or not, misleads or causes confusion due to the imprecise, false, exaggerated, biased, contrived or tendentious manner in which it is presented.

Additionally, the legal framework establishes a series of technical standards called Mexican Official Standards, whose main objective is to regulate the specific commercial information for a variety of products, as well as the technological or compositional characteristics that they must comply with according to their nature.

From an economic competition perspective, the market is regulated by the Federal Economic Competition Law and its regulations.

Intellectual property

From an intellectual property perspective, in relation to supply chains, it is essential to enter into licensing agreements with suppliers that will interact use the intellectual property rights. The relevant regulatory framework is provided for in the Federal Law for the Protection of Industrial Property and the Federal Copyright Law, as well as the Federal Civil Code, as applicable, for general provisions of these agreements. These provisions set forth the guidelines based on which licence agreements must be entered into and governed.

Unless otherwise agreed, licences are non-exclusive and the holder of the intellectual property right (licensor) may freely use or exploit its assets simultaneously. It is important to consider that the use or exploitation exercised by the licensee will be understood as made by its owner for all legal effects.

In addition, the licensee’s right to file legal actions for the protection of the licensed rights is recognised.

Previously, to be considered enforceable against third parties, a trademark licence had to be registered before the Mexican Institute of Industrial Property; however, following a reform published in June 2020, derived from the entry into force of the USMCA, licence recordal has become optional.

Notwithstanding the above, licence agreements are also important preventive tools: their absence may, in some cases, lead to the manufacturing, storage or transportation of goods using the intellectual property of the rights holder without its knowledge or consent, which amounts to infringement.

The General Law of Circular Economy Initiative represents a significant regulatory milestone, strategically designed to preserve the value of products, materials and resources within the economic cycle for an extended duration. The primary objective is to curtail the generation of waste and mitigate the consumption of virgin raw materials, diminishing the environmental footprint associated with human activities.

Enacted with the vision of fostering a sustainable and resource-efficient economy, this legislation emphasises the importance of extending the life cycle of products, promoting recycling and reutilisation, and minimising the overall environmental impact of production and consumption. By encouraging a circular approach, the law aims to transition away from the traditional linear economic model, where products are created, used and discarded, towards a more regenerative and environmentally responsible system.

The approval of the General Law of Circular Economy by the Mexican Senate on 17 November 2021 underscores the nation's commitment to addressing pressing environmental challenges, although the initiative is still under review. This legal framework not only reflects a proactive stance towards waste reduction but also aligns with global efforts to build a more sustainable future by fostering responsible resource management and promoting eco-friendly practices across various sectors of the economy.

Distribution and agency agreements

What legal framework governs distribution and agency agreements for fashion goods?

There are no specific agency laws for exclusively regulating fashion goods.

From a commercial perspective, contractual provisions relating to exclusivity and brand protection are some of the most relevant terms to be included.

What are the most commonly used distribution and agency structures for fashion goods, and what contractual terms and provisions usually apply?

The licensing of intellectual property assets may be agreed either as part of a contract expressly entered into for this purpose, or as a clause of a distribution or franchise agreement. Franchise agreements are regulated by the Federal Law for the Protection of Industrial Property and defined in law as the transfer of know-how and technical assistance involving the licence of a trademark, which, in turn, aims to make uniform the sale of products or rendering of services, maintaining a previously known quality, prestige and image.

The law details the content of the licence or franchise agreements and the scope of participation that the licensor may have in the organisation and operation of the franchisee to guarantee the maintenance of the standards of administration and image of the franchise.

Additional contractual terms that usually apply include liability, audit rights, assurance regarding the quality and specifications of the goods, sales volume requirements, promotional or advertising terms, confidentiality, warranties, jurisdiction and termination.

Import and export

Do any special import and export rules and restrictions apply to fashion goods?

In Mexico, local apparel, textile and footwear industries are protected by the federal government to prevent economic harm to domestic manufacturers. The importers of goods of the aforementioned industries are therefore required to secure diverse licences and authorisations for that purpose.

The first authorisation that a fashion-related product importer should secure is from the Textile and Footwear Importers Registry, which requires the importer to record for evidence:

  • the volume of product they will import during specific periods;
  • the possession or ownership of the facilities where the imported goods will stored;
  • the number of employees of the importer; and
  • tax-related requisites, such as holding a valid tax ID and being up to date with the filing of tax returns and similar obligations.

Additionally, the customs value of the imported products must not be under the established benchmark prices set by the Mexican Revenue Service. These prices are the minimum estimate of, from the authority’s perspective, what a textile or footwear item shall cost for purposes of the relevant calculation of import duties and VAT. In the event that the importer insists that the cost of its products is correct (when it is under the referred official prices), the importer is required to guarantee the difference of the payment of the applicable import duties and taxes on an escrow account in favour of the Federal Treasury, while the proper pricing investigations are conducted by the authorities to conclude that no undervaluation or tax evasion practices are being carried out by the importer.

Additionally, if the value of the goods to be imported is under the benchmark prices, the importer should, prior to commencing the importation process, submit a prior import permit to the Ministry of Economy. The importer will be requested to provide information regarding the cargo intended to be imported, such as the Harmonised Tariff System code, quantity, value and country of origin of the product.

In addition, for most textile or footwear goods, the importer must also provide evidence, at the point of entry into Mexico, that the products comply with labelling obligations outlined in the relevant Mexican Official Standards.

Lastly, the Ministry of Economy, through the International Commercial Practices Unit, is responsible for conducting anti-dumping investigations in the event that a foreign manufacturer is exporting and selling goods in Mexico at less-than-fair market value. Significant dumping duties may be determined and collected on because of these investigations. Therefore, if the Mexican government detects that fashion-related goods are being sold in Mexico below a fair market price, it could initiate a dumping procedure to stabilise the product’s market.

Corporate social responsibility and sustainability

What are the requirements and disclosure obligations in relation to corporate social responsibility and sustainability for fashion and luxury brands in your jurisdiction? What due diligence in this regard is advised or required?

In Mexico, while there is no specific dedicated regulation solely for corporate social responsibility (CSR) or sustainability, various laws and regulations indirectly address aspects of CSR and sustainability practices. Notably, ISO 26000 emerges as a significant reference for businesses aiming to adopt and communicate effective CSR initiatives. This international guidance document provides a valuable framework for aligning practices with globally recognised standards, enhancing reputation, mitigating risks and demonstrating a genuine commitment to sustainability and ethical business conduct. It is crucial to understand that ISO 26000 functions as a guidance document rather than a certification standard.

Furthermore, the Federal Law for the Protection of the Cultural Heritage of Indigenous and Afro-Mexican People stands out as a crucial legal framework. Designed to safeguard the cultural heritage and rights of indigenous and Afro-Mexican communities, this Law holds relevance for fashion and luxury brands engaging with the art, designs or cultural elements of those communities. Compliance involves obtaining prior informed consent, preserving cultural integrity, ensuring fair compensation, addressing intellectual property and trademark concerns, preventing exploitation and actively supporting cultural preservation efforts.

For fashion and luxury brands operating in Mexico, it is imperative to conduct thorough due diligence, seek legal advice and ensure strict adherence to the Federal Law for the Protection of the Cultural Heritage of Indigenous and Afro-Mexican People. This not only fulfils a legal obligation but also underscores cultural respect and ethical responsibility when incorporating indigenous and Afro-Mexican art and culture into products or branding.

Additionally, international standards related to environmental management play a crucial role. Standards such as ISO 14001:2015 and ISO 14004:2016 for environmental management systems, ISO 14006:2011 for the incorporation of environmental aspects into product design and development, ISO 14064-1:2018 for greenhouse gases and ISO 50001:2018 for energy management systems offer comprehensive frameworks to address environmental concerns, enabling businesses to align with global sustainability goals.

Collectively, these ISO standards serve as invaluable tools, offering frameworks and guidelines that empower organisations to tackle environmental challenges in a structured and effective manner. They contribute to a comprehensive approach, ensuring responsible business practices and environmental stewardship.

Lastly, the Ministry of Finance and Public Credit has taken a proactive step by instituting a classification system known as the sustainable taxonomy. This innovative framework serves the crucial purpose of identifying and categorising economic and financial activities that actively contribute to sustainable development and the attainment of environmental and climate objectives. It stands as a pivotal tool in assessing the sustainability of various projects and activities.

Up until now, the textile industry has not undergone an evaluation under this sustainable taxonomy. Consequently, the specific measures that the industry must adhere to for it to be recognised as a sustainable activity have not been formally incorporated. However, there is a positive anticipation that the Ministry will soon issue an update to the taxonomy, encompassing the textile industry and delineating the criteria and standards that businesses within this sector must meet to attain the coveted status of a sustainable activity.

What occupational health and safety laws should fashion companies be aware of across their supply chains?

Mainly, the provisions established in the Federal Labour Law and those contained in the Mexican Official Standards on occupational safety and health must be followed.