The Mexico Journey® is Prodensa’s proprietary framework and turnkey solution to help global manufacturers and businesses launch operations in Mexico and integrate successfully into the North American ecosystem. It combines strategic advisory, corporate planning, operational execution, and hands-on support.
With over 1,000 organizations served, The Mexico Journey® is the proven methodology behind some of the most successful manufacturing expansions in the region.
Legal frameworks in Mexico are highly structured and formal. The civil law system governs all transactions, with significant roles played by notaries and legal representatives. Foreign companies often require a power of attorney to operate efficiently.
Mexico allows 100% foreign ownership in most industries through two main corporate structures: Sociedades Anónimas (SA) and Sociedades de Responsabilidad Limitada (SRL), comparable to corporations and LLCs in the U.S.
"Doing business in Mexico requires more than regulatory knowledge--it demands intelligence, strategic stakeholder engagement, and a deep understanding of how federal, state and local dynamics shape the investment landscape."
Isabel Clavijo, VP Institutional Relations
Before launching new operations, organizations must build a strong business case:
Institutional Relations Strategy: Engage proactively with government bodies, chambers, and regulatory institutions.
Market and Industry Analysis: Validate the opportunity through competitor benchmarking, supplier mapping, and cost analysis.
Define the Project: Outline key drivers, project needs, and define must-haves vs. nice-to-haves.
This planning stage translates vision into an actionable roadmap tailored to market conditions, political dynamics, and operational needs.
👉 Did you know there are more than 10 different operational models for launching and managing a business in Mexico? There's no one-size-fits-all approach. Explore the turnkey operations models here.
Choosing the right location is a strategic decision. Beyond real estate options and costs, consider:
Proximity to raw materials and customers
Access to skilled labor and public transportation
Infrastructure: cargo crossings, ports, rail, and airports
Local cost structures, tax incentives, and customs activity
A cross-functional evaluation (operations, HR, engineering, finance) is key and a thorough and unbiased site selection analysis is imperative. Additionally, integrating a constructibility analysis early in the process helps avoid future delays and unexpected costs.
Once a site is selected and the business case validated, the next phase of The Mexico Journey® focuses on building and launching a fully compliant, tax-efficient, and talent-ready manufacturing operation. This step is more comprehensive, as it integrates regulatory compliance, workforce setup, tax strategy, and sustainability practices into a single, coordinated launch effort.
Depending on your business strategy, you may choose a wholly owned subsidiary, shelter model, joint venture, or contract manufacturing setup. If incorporating a new legal entity, expect a 2- to 3-month process to prepare bylaws, POA, proof of capital, and tax ID registration.
Businesses must comply with several key tax obligations in Mexico:
Income Tax: 30% corporate rate
VAT: 16% (with exemptions through IMMEX)
Payroll & Profit-Sharing: 2-3% payroll tax and 10% annual profit sharing
Withholding Tax: Applied to royalties, technical assistance, and other cross-border payments
Property Tax: Paid at acquisition and annually
Manufacturers have numerous tax incentive programs--both domestic like the IMMEX program with VAT Certification, or international like the USMCA and other trade agreements. These provide critical cost savings, but also include strict compliance mandates.
"Understanding VAT in Mexico isn’t just about compliance—it’s a strategic opportunity. With the right structure and certifications, manufacturers can significantly improve cash flow and reduce tax exposure through proper VAT reimbursement mechanisms."
Arturo Quintero, Finance Director
Mexico’s labor system is structured and protective of workers. Employers must:
Comply with a 48-hour work week, overtime rules, and provide competitive benefits
Enroll all employees in the national social security system (IMSS)
Establish a termination process that respects just cause laws or pays mandated severance
Navigate collective bargaining agreements and union representation, especially after the 2019 reforms and USMCA labor rules (Annex 23-A)
Download the free e-book to learn more about Mexico's evolving labor laws.
Businesses and especially manufacturers must meet stringent trade requirements:
Accurate import/export declarations, certificates of origin, and updated documentation per USMCA
Compliance with 2022’s mandatory Bill of Lading Supplement
Use of IMMEX Program and VAT Certification to minimize customs costs
Part of the IMMEX Program is reserved for the export of services from Mexico. Read more about the opportunities for service-providers in Mexico here.
"The recent updates to Annex 24 are a reminder that trade incentives come with responsibility. When companies embrace compliance not just as a requirement, but as a best practice, they position themselves to fully benefit from the IMMEX program and strengthen their role in North America’s export ecosystem."
María Elena Sierra, VP of International Trade, Prodensa
Operations must comply with local, state, and federal environmental laws:
Obtain Environmental Impact Assessments and land use permits
Perform feasibility studies for electricity, water, and other utility services
Classify fire risk, install safety protocols, and follow NOM-based inspections
Ongoing safety, hygiene, and environmental monitoring is required to maintain compliance. Internal audits, mixed safety commissions, and monthly reports are standard best practices.
Combining all these factors, the launch phase ensures a sustainable and compliant operation—from hiring the first employee to producing the first shipment.
The final phase of The Mexico Journey® focuses on long-term growth and continuous improvement:
Market Adaptation: Stay ahead of demand and consumer preferences
Cost Optimization: Align supply chains for efficiency
Technological Integration: Leverage Industry 4.0 and automation
Sustainability: Meet environmental standards and consumer expectations
Workforce Development: Invest in talent retention and become an Employer of Choice
"Manufacturing in Mexico is entering a new era—where people and technology work side by side. Operational excellence today means investing in both digital tools and human potential to build smarter, more adaptive production systems."
Luis Hernandez, Chief Manufacturing Officer
Mexico plays a central role in North America’s economic integration and industrial competitiveness. Under the USMCA framework, the trilateral relationship between the United States, Mexico, and Canada fosters nearshoring, cross-border trade, and shared production platforms that benefit multiple industries.
Operations in Mexico support vital sectors such as automotive, aerospace, electronics, and medical devices—providing cost-effective manufacturing and just-in-time delivery across borders. With components often crossing borders multiple times before final assembly, Mexico's manufacturing base strengthens regional supply chains and increases resilience.
Additionally, investing in operations in Mexico boosts employment not only locally but across North America by expanding supplier ecosystems, stimulating logistics infrastructure, and enabling companies to reinvest in innovation and workforce development.
Other benefits of operating in Mexico include:
Greater agility and reduced supply chain risks
Alignment with USMCA rules of origin for tariff-free trade
Access to bilingual, STEM-capable talent pools
Competitive total cost of ownership
Business continuity amid global disruptions
The Mexico Journey® positions companies to harness these advantages—enhancing their role in the regional economy while strengthening ties across the continent.
Starting a manufacturing project in Mexico can feel complex, but the right preparation will set the foundation for long-term success. Here are a few expert tips:
Start Early: Legal, regulatory, and tax timelines often take longer than expected. Begin planning 9–12 months in advance, or more for more complex operations.
Engage Local Experts: Navigating bureaucracy, culture, and compliance is smoother with trusted advisors who know the territory.
Clarify Your Objectives: Define what success looks like across your organization and align leadership on timelines, investment thresholds, and operational goals--recognizing that different teams may have distinct perspectives of 'success'
Prioritize People: Talent strategy is as important as logistics. Think about recruiting, training, and workforce development from day one.
Stay Agile: Mexico offers multiple operational models. Stay open to different structures that may reduce risk or accelerate launch.
Taking the first step on The Mexico Journey® means investing in a tailored plan, supported by regional expertise and a proven roadmap.
Download Our eBooks:
Explore More:
Learn about IMMEX Program Advantages
Explore Industrial Corridors in Mexico
Everything you Need to Know about EOR in Mexico
For expert guidance on expanding into North America, The Mexico Journey® is your roadmap to operational success. Schedule a meeting to explore your options with one of our Advisors.