GlobalAutoTV
Click to watch Ricardo Castro-Garza -
Click to watch Ricardo Castro-Garza -
latin resources

Need an office in Mexico or Brazil? Office suites, meeting rooms, virtual offices, network access



free downloads
LATIN AMERICA: "Mexico: Tax Competitiveness of the Maquiladora Industry, a Study from the Internatio

LATIN AMERICA: "Mexico: Tax Competitiveness of the Maquiladora Industry, a Study from the International Perspective (Executive Summary)". 11-page Exec Summary by KPMG and CNIMME.

proceed to download
eJournals




back to index backLATINtalk July,  2005


A Business Manual for Moving to México

Many unique situations arise when transferring an employee and their household goods into México, and many incentives are available to companies that wish to do business with this Latin American country. Lerdo de Tejada explains the intricacies of the Mexican business world and the issues facing immigrants and expatriates in México.

México's General Law of Population establishes three general groups for naming the status of foreigners entering the country: nonimmigrant, immigrant, and permanent resident.

A nonimmigrant is a person who enters the country on a temporary basis under various categories, such as tourist, visitor, student, religious minister, or traveler in-transit.

The permit granted for nonimmigrants is an FM3, which is good for up to one year and renewable up to four times, for a total period of no more than five years. The permit shall specify the place and activities to be carried out by the foreigner. When a remunerated activity is performed for a Mexican business, the Mexican business will be jointly responsible for any sanctions imposed for violations of the terms of the permit.

When importing household goods shipment for their employees/transferees, the Mexican company must be sure that once their assignment is over the shipment must be returned and that the importation summary, as well the FM3 permit, is cancelled.

An immigrant can be granted an FM2 permit for up to one year, annually renewable for up to five years. On completion of the five-year period, the immigrant will be granted permanent resident status (Inmigrado), the third general group.

Temporary Entry of Businesspersons Under NAFTA

The term businessperson” under the North American Free Trade Agreement (NAFTA) includes the following categories: business visitors, traders-investors, intra-company transferees, and professionals, none of whom may receive income for their activities in México. All of the above authorizations shall be temporary, and these visitors shall be classified as nonimmigrant.

Only a foreigner entering the country as a nonimmigrant may import a vehicle during the term of his or her status, provided he or she is in compliance with certain requirements, among them presence at the border (port of entry) for the temporary importation. Immigrants may not import a vehicle, except in the retiree (rentista) classification.

Mexican Citizens

Mexican citizens being transferred to another country must be aware of the following in order to return their household goods shipment:

* If you have to return in less than 12 months, you only can return exactly what was exported from México, and the return must be done before the 12th month.

* Between the 12th and the 24th months you will not be able to return your shipment, and you will be able to have your inventories stamped by the Mexican consulate at the place of origin only after two years.

* Only students with proper certificates from a university or school will be granted permits by Customs (SAT) to bring their shipments before the two-year period.

Embassies must request the proper franchise from the Mexican Ministry of Foreign Affairs in order to allow diplomats to import their household goods shipment into México.

In addition to the FM3, FM2, and franchise permits, there are other documents that are required for the importation of household goods into México. Always verify possession of all necessary documents prior to sending the shipment, as there are slight differences between the ports of entry.

It is necessary to emphasize that if Customs regulations are not met and Customs finds any prohibited or new items, the moving company, as well as the shipper, his or her company, and his or her Customs broker can be in serious trouble, as prohibited items are considered contraband and introducing them into the country is a crime. To avoid problems, delays, and extra costs, comply with Customs regulations.

Used household goods imported into México are duty-free. New items cannot be imported to México, except into the city of Laredo. Wine and liquor, as well as food, are prohibited. Consult your moving company if you have any doubts or questions.

México has many ports of entry; however, before shipping household goods into México you must check with your Mexican moving company to see which port of entry must be used, as the port nearest to your final destination may not be the port you are authorized to use. You must be sure that Customs is familiar with the importation of household goods.

Laredo shares a 3,000 km-long border with the United States. It is the most common port of entry and the best one. Veracruz is the preferred port to use on the Gulf of México, and Manzanillo is the preferred port on the Pacific side.

México's Customs's modernization investment 2002-2006 includes X-rays, Gamma rays, scales, closed-circuit television, buildings, docks, bonded facilities, training, and equipment. Clearing Customs is not an easy task. The average clearance time for a household goods shipment, once all proper documents are ready and customs regulations are met, is one to two days.

Foreign Investment

Foreign investment is permitted up to 49 percent in the capital stock of Mexican companies involved in the administration, operation, and construction of airport terminals; however, the foreign investment commission may authorize foreign ownership in excess of this amount.

Concessions are granted for internal port administration and the construction and operation of terminals, marinas, and port facilities. Permits are granted for those services, which are defined as any services rendered at ports, terminals, and port facilities to serve vessels, as well as any rendered in the transfer of people and goods between ships, to land or to other means of transportation. In addition, a permit also is required to build piers, wharfs, launching docks, and other similar facilities on the general waterways outside of ports, terminals, and marinas. Foreign investment is restricted to 49 percent regarding integral port administration, and piloting services related to internal navigation. Permits and concessions have been granted to Manzanillo, Veracruz, and Tampico, among others.

International Agreements

In a more interrelated and competitive world, México has adopted several measures to ensure its participation. México has developed a network of free trade agreements, which, combined with the country's strategic geographic position, have given it a pivotal role in international trade. México currently has free trade agreements in effect with the United States and Canada (NAFTA), the European Union, Bolivia, Chile, Costa Rica, Colombia, Venezuela, Nicaragua, Honduras, Israel, Iceland, Liechtenstein, Norway, and Switzerland.

Profiting from Current Free Trade Agreements

One of the least analyzed aspects of México's privileged position as a free trade partner is the benefits it offers for worldwide investors to access other markets without paying duties. For instance, with the creation of the Mexican-EU Free Trade Agreement, companies from the United States and Canada (as NAFTA members) may access the EU market duty-free. Likewise, EU member countries may gain access the United States and Canadian markets under the same conditions.

With the simultaneous application of NAFTA and the México-EU Agreement, international companies may export their products to such markets, with either severely reduced or nonexistent import duties. However, this only can be achieved if the processing or final assembly of the products to be exported takes place in México, and if the product qualifies as an originating product according to the rules of origin set forth by NAFTA or the México-EU Agreement.

This outstanding advantage should be subject to serious consideration by all international companies that intend to expand worldwide market access of their products. Examples of the investment are the new corporate business centers such as Santa Fe in México City and, in the near future, the Bosque Reál Corporate site.

The Housing Sector

Perhaps the most telling evidence of the strength of México's stock-listed housing sector over the past few years is how expensive these shares are in comparison to similar stocks in North America and Europe. Direct foreign capital investment in the housing sector and Mexican investment have been huge.

Source: MOBILITY Magazine - GAI


previous page

go top
search our site


Loading

LATINtalk

Other articles from the same issue (July,  2005).

A Business Manual for Moving to México
play read on

Volkswagen rides the Brazilian auto recovery to new export markets across the globe
play read on

'New' Mexico courts investors
play read on

Political Crisis, Economic Aftermath: Slow Growth For Brazil...
play read on

The practice of low-cost country sourcing (LCCS) is accelerating
play read on

Latin America: Setbacks inevitable
play read on

Setting up your business in Mexico
play read on

New book details export compliance responsibilities
play read on


Our Free eJournals
GlobalAutoExperts

To visit GlobalAutoExperts Directory, click here.


©2008 GlobalAutoIndustry.com | HCI Group, Ltd.
101 West Big Beaver Road, Suite 1400 | Troy, MI 48084 USA
USA Tel: +1.248.687.1060 | USA Fax: +1.248.927.0347
Fax UK: +44.(0)845.127.4765 | Fax Europe: +31.20.524.1659 | Fax Asia: +852.3015.8120