The nearshoring wave is real, and it is not slowing down. Since 2022, US and Canadian companies have accelerated plans to move manufacturing, assembly, and services operations from Asia to Mexico. The drivers are straightforward: USMCA tariff advantages reduce landed cost, labor rates are competitive without the 12-to-16-hour time zone gap, geographic proximity allows same-day or overnight logistics to US distribution centers, and supply chain risk is lower in a country that shares a 3,000-kilometer border with the US.
What the business case does not account for is the legal complexity of actually building operations in Mexico.
Two models, two regulatory paths
Not all nearshoring is the same. The legal structure, regulatory requirements, and compliance obligations differ substantially depending on whether the operation involves physical manufacturing or service delivery.
Manufacturing and assembly nearshoring
Manufacturing nearshoring—moving production of goods, components, or sub-assemblies to Mexico for export back to the US or Canadian market—operates best under the IMMEX program (Programa de la Industria Manufacturera, Maquiladora y de Servicios de Exportación), Mexico's export-manufacturing program.
IMMEX allows certified companies to temporarily import raw materials, components, machinery, and equipment into Mexico without paying IVA (value-added tax) or import tariffs on those inputs, provided the finished products are exported. This eliminates the cash flow burden of paying IVA on every shipment of inputs and then waiting for a refund—a significant advantage for capital-intensive manufacturing operations.
The IMMEX program is administered jointly by the Ministry of Economy (Secretaría de Economía, SE) and Mexico's Tax Administration Service (Servicio de Administración Tributaria, SAT). The application goes to both agencies simultaneously.
Services and technology nearshoring
Services nearshoring—call centers, software development, IT support, back-office processing, accounting services, and customer service operations—does not require IMMEX certification. These operations typically import little or nothing and export services rather than goods. The regulatory focus shifts from customs and tariff law to labor law, data privacy, and telecommunications.
Services' nearshoring operations that handle personal data of US or Canadian clients must comply with Mexico's LFPDPPP (Ley Federal de Protección de Datos Personales en Posesión de los Particulares) and, depending on the nature of the data, with US or Canadian privacy frameworks. Data processing agreements between the Mexican entity and foreign clients must address LFPDPPP transfer requirements.
IMMEX certification: what it takes
For manufacturing operations, IMMEX certification is the operational foundation. Understanding the eligibility requirements and the application process before committing to a site avoids delays of six months or more.
Eligibility requirements
IMMEX certification requires the applicant to demonstrate one of the following:
- A minimum of USD 500,000 in annual export value (for established manufacturers seeking to certify existing operations)
- A feasibility plan demonstrating the ability to reach the export threshold within two years (for new operations)
- Membership in a sector-specific IMMEX shelter program (for companies that want to operate under an existing certified entity while building their own)
The company must also have a valid RFC (Registro Federal de Contribuyentes), be current on all federal tax obligations, and not appear on the SAT's list of companies with tax irregularities (known as the "69-B list").
What IMMEX authorizes—and what it does not
IMMEX authorizes the temporary importation of:
- Raw materials and components to be incorporated into the exported product
- Packaging and containers for the exported product
- Fuel and lubricants used in the manufacturing process
- Machinery, equipment, tools, and spare parts used in the manufacturing process
What IMMEX does not authorize: importing inputs for use in products sold in the Mexican domestic market. The program is strictly for export production. Companies that sell both into the US market and into Mexico must maintain rigorous inventory segregation and accounting systems to separate IMMEX-covered inputs from inputs used for domestic production. SAT audits of IMMEX companies focus heavily on this distinction.
Application process and timeline
The IMMEX application is filed with SE, which coordinates with SAT. SE reviews the application for completeness, operational viability, and export plan. SAT confirms the applicant's tax compliance status. The full process, from filing to authorization, typically takes 60 to 90 business days for a straightforward manufacturing application. Companies with prior SAT issues or incomplete documentation can expect significantly longer timelines.
Once certified, IMMEX companies must file quarterly reports with SE and SAT, maintain detailed inventory records of temporarily imported goods, and export within the program's authorized timelines (typically 18 months for raw materials, 24 months for machinery and equipment).
Labor compliance for nearshoring operations
Labor law is where nearshoring operations most commonly create serious exposure. The LFT (Ley Federal del Trabajo) applies to every worker physically present in Mexico, regardless of whether their employer is a Mexican or foreign entity.
The 2021 subcontracting reform
Before April 2021, many foreign companies structured their Mexican operations through a service company that nominally employed all the workers, allowing the operating entity to avoid IMSS, INFONAVIT, and profit-sharing (PTU) obligations. The 2021 subcontracting reform effectively ended this model.
Under the reformed LFT, a company can only receive specialized services or specialized work through a third-party provider if that provider is registered in the REPSE (Registry of Specialized Service Providers; Registro de Prestadoras de Servicios Especializados u Obras Especializadas) and the services fall outside the main corporate purpose of the contracting company. The specialized services must be genuinely different from what the main company does.
For nearshoring operations, this means if you are a US company that manufactures electronics and you want to establish a Mexican assembly operation, you cannot simply contract with a Mexican service company to "provide assembly services" and avoid the employment relationship. The assembly workers are performing your core business activity. They must be employees of an entity that carries proper IMSS, INFONAVIT, and PTU obligations.
What correct labor structure looks like
A properly structured nearshoring operation in Mexico typically involves:
- A Mexican legal entity (S.A. de C.V. or S. de R.L. de C.V.) that is the direct employer of all workers
- Employment contracts that comply with LFT requirements (named, specifying the type of work, working hours, salary, benefits)
- IMSS registration of each employee before their first day of work
- INFONAVIT contributions at 5% of each employee's salary
- Annual PTU (profit sharing) distribution of 10% of taxable income to eligible employees under LFT Article 117
- STPS workplace safety compliance, including the SGSST program and annual risk notification (SUA filing)
Profit sharing catches many foreign companies off guard. It is not optional, it is not negotiable, and it applies regardless of whether the company has foreign losses being consolidated at the parent level. The Mexican entity's taxable income is the basis.
State-level incentives for nearshoring
Federal law governs IMMEX and labor compliance, but states compete for nearshoring investment through local incentives that can materially affect location decisions.
Nuevo Leon (Monterrey): Mexico's established industrial heartland. Deep automotive, electronics, and aerospace supplier base. State investment promotion authorities (ProMexico historically, now under federal coordination) have attracted significant US and Asian manufacturing. Good infrastructure, but the labor market is tightening in some sectors.
Queretaro: Growing aerospace and automotive cluster. Proactive state investment agency. Reasonable cost structure and strong technical education pipeline from local universities.
Baja California (Tijuana, Mexicali, Ensenada): Proximity to California makes it attractive for companies with West Coast distribution. Strong export-manufacturing tradition, existing industrial park infrastructure, and IMMEX processing ecosystem already in place.
Quintana Roo and the Yucatan Peninsula: Increasingly attractive for digital services nearshoring—software development, fintech, customer experience operations. Favorable time zone alignment with the US East Coast, a growing talent pool, and state-level incentives for technology sector investment. Not a traditional manufacturing hub, but a legitimate option for services operations.
Environmental and workplace safety for manufacturing
Manufacturing nearshoring operations with environmental impact must obtain authorization from SEMARNAT (Ministry of Environment and Natural Resources; Secretaría de Medio Ambiente y Recursos Naturales) before beginning construction or operations. For companies with regulated air, water, or hazardous waste emissions, ongoing compliance with PROFEPA (Federal Environmental Protection Agency; Procuraduría Federal de Protección al Ambiente) inspection programs is mandatory.
STPS conducts periodic workplace safety inspections at manufacturing facilities. Non-compliance findings result in fines and required remediation. Serious violations can trigger temporary closure orders.
Building a compliance calendar that includes SEMARNAT annual reporting, PROFEPA self-audits, STPS safety reviews, and IMMEX quarterly reporting is not optional administrative work—it is the operating infrastructure of a compliant nearshoring operation.
For guidance on structuring a nearshoring operation for your industry and target location, speak with our legal team.
Frequently asked questions
IMMEX (Programa de la Industria Manufacturera, Maquiladora y de Servicios de Exportación) is a federal certification that allows companies to temporarily import raw materials, components, and equipment into Mexico without paying IVA or import tariffs, provided the finished products are exported. To qualify, a company must demonstrate either USD 500,000 in annual exports or a credible plan to reach that level within two years, hold a valid RFC and be current on federal tax obligations. The application is filed jointly with the Ministry of Economy (Secretaría de Economía, SE) and SAT.
It eliminated the scheme of using a nominally independent service company to employ workers performing the main company's core activities. Under the reformed LFT, specialized service arrangements are only valid if the provider is registered in the REPSE and the services are genuinely outside the contracting company's main corporate purpose. For most manufacturing nearshoring operations, this means workers must be direct employees of the operating Mexican entity.
No. Any company that has employees working in Mexico, leases property in Mexico, or conducts business activities in Mexico has a tax and regulatory presence there. Without a formal Mexican entity, those activities create an informal permanent establishment with tax, IMSS, and labor liabilities that are harder to quantify and more expensive to remediate than a properly structured entity would have been.
The REPSE (Registry of Specialized Service Providers; Registro de Prestadoras de Servicios Especializados u Obras Especializadas) is a federal registry maintained by STPS. Service providers that want to provide specialized outsourced services to other companies must be registered in REPSE. Contracting companies are required to verify their service providers' REPSE registration before executing contracts—failure to do so creates joint employer liability for the contracting company under the reformed LFT.
From entity incorporation to IMMEX certification and first production, most companies should plan for six to nine months. Entity formation takes three to five weeks, RFC and RNIE registration add another two to four weeks, and the IMMEX application itself takes 60 to 90 business days at SE/SAT. Parallel to the IMMEX process, the company must secure its facility, build out or fit out the production space, hire and register workers with IMSS, and obtain any sector-specific permits. Companies that try to rush this sequence typically discover that one delayed step (often IMMEX authorization or bank account opening) blocks everything else.