Mfg. in Mexico
Electro-Mech Components, Inc. (EMC) (South El Monte, CA) is currently the most experienced maquiladora in Tijuana through its sister company, Switch-Luz, S.A. (“Switch-Light”).
EMC founded Switch-Luz in 1966 to manufacture its complete product line of pushbutton switches, lenses, indicator lights, and multi-switch assemblies and has expanded its operations to include shelter manufacturing and contract manufacturing. EMC’s shelter manufacturing services allow other multinational manufacturing firms to reap the benefits of operating a maquiladora facility in Mexico.
While NAFTA has facilitated manufacturing in Mexico, the challenge of cultural and language differences remains a stumbling block for many business owners considering establishing production facilities south of the border. EMC offers a shelter manufacturing program with the following benefits:
- EMC handles all contact with Mexican government agencies, including permitting and licensing, regulatory compliance, staffing, facility leasing and legal issues. The customer provides equipment and materials for making the product, and production supervisor.
- Rapid Start-up: With EMC’s assistance, most clients have been able to start up within 8-10 weeks.
- Minimal start-up expenses.
- Labor savings of 50% or more. EMC’s shelter services can cut your production overhead in half, while allowing you to maintain control of product quality and intellectual property.
How much can you save? Let EMC give you a free cost estimate today.
Switch-Luz, S.A. was featured in Business Conexion magazine in the August-September 2014 issue:
Electro-Mech Primary Services for Manufacturing in Mexico:
Our services fully cover the four main administrative areas that all companies must have in place to successively operate in Mexico — Accounting, Customs, Human Resources, and Permits. With many years of experience, EMC staff will be there to guide you through the process so that your business continues to run smoothly while avoiding the hassle of dealing with unknown regulations. Our know-how mean savings to you in both cost and time.
Let EMC manage your financial records for the shelter corporation. EMC conducts all record keeping, and handles all service payments, including vendors and payroll.
All operations and payments are conducted with formal customer approval only, and resources are controlled and confidential. Furthermore, expenses incurred in Mexico are deductible in the United States, including all Federal Taxes (ISR and IETU).
Federal and State Taxes are calculated and paid by EMC in a timely manner. The most common tax liabilities for the foreign company are:
- Income Tax Calculation (per Safe Harbor Rules)
- State Payroll Tax (1.80% Base Rate)
- Social Security
- Housing (Infonavit)
- There is zero Value Added Tax
The border between Tijuana and the San Diego Region is very dynamic and the crossing time between the countries is relatively fast (one hour is typical). Mexican regulations promote Duty Free treatment for goods even if they are not NAFTA eligible and can be dependent upon Industry segment.
The North American Free Trade Agreement (NAFTA) allows all goods originating from the US, Canada, or Mexico to freely enter borders, making customs efficient and convenient when time is a factor.
EMC’s services Customs Commercial Invoices, NAFTA analysis strategy (most advantageous classifications), and coordination with Customs brokers (in Mexico and the US) so that your parts and components get in and out of Mexico expeditiously, and logistics coordination for final delivery to your plant or customers.
All traceability of imports and exports are handled by EMC, so all duties (if applicable) and any other requirements will be cleared on your behalf.
Mexican employees are skilled and Tijuana’s speciality is manufacturing, so most industry segments are already established in this large, dynamic city.
Multi-national companies in many industries, including electronics, electrical, medical, aerospace, machining, and consumer products have no problem find the right people to do the work. Technical universities supply the needed engineers, and many employees are trained in-house. With one of the highest literacy rates in Mexico, Tijuana has more than 35 public and private universities, as well as 14 technical schools and 57 high schools, that support the education of its workforce of approximately 650,000.
EMC handles hiring, payroll, payroll payments via electronic funds transfer, and all needed employee requirements such as social security, housing and income tax calculation for each worker.
The EMC shelter management team will take care of all the start up paperwork, all contact with Mexican governmental agencies, including permitting and licensing, regulatory compliance, staffing, building leasing and legal issues. The customer provides the equipment and material for making the product, costed BOM’s for preliminary customs analysis, a production supervisor, and EMC does the rest.
We manage all requirements on a daily basis so the customer can focus on manufacturing its products. We do require an assembly services contract, and then EMC immediately begins the tasks of converting the customer’s vision to reality.
Mexico has worked hard to earn its place in the world market by providing a cost effective method for the manufacturing of quality products. EMC has provided an effective and efficient way for U.S. companies to take advantage of what the Mexican Maquiladora has to offer: reduced manufacturing costs without the slow turnaround time and high transportation costs of an Asian factory.
Managed by a team of highly qualified American and Mexican professionals, EMC has the experience and dedication to assist you in producing high quality products in Tijuana, Mexico. In fact, EMC has been doing this since 1966, and has adapted to all of the changes of the Mexican government regulations over the years. EMC shares its experience and know-how to do business south of the border with its U.S. shelter clients.
Tijuana has over 550 foreign companies operating under the Maquiladora program, and 4,500 more companies in other cities. Companies of all sizes, including multinational firms like Sony, Samsung, Toyota, Eaton, and Mattel are all taking advantage of the benefits of having a low cost manufacturing plant south of the border.