FAQ
Frequently asked questions answered by Maquila Properties President, Jean-Paul de Kervor, Mba. Licensed Real Estate Broker since 1989.
1. Can a non-citizen of Mexico own real estate in Mexico?
The rules regarding residential property ownership in Mexico have not yet changed. To buy a house or condo in Mexico as a non-citizen, the property must be at least 50 km (31 miles) from the coast and 100km (62 miles) from the international border. Anything closer requires a bank-issued trust account known as a fideicomiso, which holds title for a fee of about 1% per annum. (Negotiable). Foreign nationals are able to hold title to their commercial (non-residential) property regardless of it’s proximity to the coast or border. However, our clients typically chose to hold title through a mexican corporation, SA de CV, partnership, SRL or special purpose entity.
2. Does moving my operation to Mexico make sense?
It depends on several factors, including short and long-term goals. If you’re moving a manufacturing operation to Mexico, you will need to consider infrastructure requirements. Land, power and water are not necessarily less expensive in Mexico. In the case of manufacturing, the labor cost is where significant savings are realized, so the number of employees is the first screen. Proximity to a large consumer market makes Tijuana commercial real estate especially attractive for manufacturers worldwide looking to sell their goods in the United States.
Locating a distribution warehouse in Mexico makes sense if your product line supports the large or medium manufacturers in the area. Many suppliers also find it financially prudent to relocate near their clients.
3. Why Tijuana?
Tijuana, the medical, aerospace, automotive, furniture and electronics manufacturing powerhouse, has 60 million square feet of Industrial buildings housing as many as 200,000 manufacturing workers. With the nearby cities of Ensenada, Tecate and Mexicali the region has nearly 100 million square feet. Close proximity to San Diego, California and the North American market make Tijuana a unique location to manufacture and live. The region includes an experienced and well-trained, highly bi-lingual and bi-cultural labor market with a public transportation system. Exceptional Southern California weather translates to reduced energy costs, and an array of sporting activities like fishing, surfing and off-roading. Excellent restaurants, hotels and two international airports serving the area make getting around the region uncomplicated. Many managers chose to live in san Diego’s South County with Beachfront homes in Coronado or Imperial beach, or horse properties in Bonita or Eastlake, home to the US Olympic Training Center.
4. What is a Shelter and when does it make sense to use a Mexican Shelter Operator?
A “shelter” is a US based outsourcing company that handles administrative duties, including import export, personnel and tax compliance, legal and accounting issues, and other services related to running your operation, typically added to your direct labor cost. If your employee count is below 50, a shelter operation will likely save time and money during the start-up through the first 2-3 years compared to hiring all of the personnel required directly. Larger companies, however, also enjoy outsourcing the administrative function of their operation for added flexibility. It can reduce your exposure to changes in the law and the complexities of doing business in a foreign country. Not all shelter companies offer the same pricing and products, but they typically range from $1.50 to $0.35/ direct labor hour depending on the number of employees, and other factors. Please call us for information on shelter operators..
5. What steps are needed before I can apply to the Maquiladora program?
a. Check with a customs broker with regards to the duty on your raw materials, especially if they come from outside North America. Certain North American Content requirements are required for duty free access to the North American market.
b. Contact a reputable real estate broker to merge your requirements with the site selection process.
c. Visit the Mexican consulate in your city to apply for the proper work or investor visas.
d. Get your application going for a Sentri pass at GOES.gov. This can save you time at the border and airports with the new Global Entry Program.
e. Establish a mexican entity, including a bank account and books with a mexico based attorney, accountant or shelter operator.
f. Register your entity with the proper mexican authorities.
