Challenge No 2. Understanding the ramp up costs (investment

Challenge No 2.

Understanding the ramp up costs (investment)

First, analyze how much it costs to open a new manufacturing facility. These are some costs we recommend being considered in the decision making process.

Labor

The sum of all wages paid to employees, employee benefits (mandatory and market driven) and payroll taxes paid by an employer.

Logistics

Supply chain, transportation, tariffs, import duties, and other associated costs.

Infrastructure

Land, building, and utilities (electricity, water, natural and industrial gas, fiber optics, and other).

Fixed costs, variable costs, operating costs, maintenance.

Services

Taxes

Taxes and fiscal obligations on federal, state and local levels. How to adjust your Mexico tax strategy to your corporate vision.

Governments can offer financial assistance to private businesses making investments using economic incentives. Incentives can include tax abatements, tax revenue sharing, grants, infrastructure assistance, no or low-interest financing, free land, tax credits and other financial resources.

Government Incentives

Success Cases

These cases apply to all those clients to whom we have carried out a Mexico Feasibility analysis, to know what their cost of operation is in an accurate way, and from there to be able to make the decision to settle or not to settle in Mexico.

Some examples of current clients who started with this service, and did decide to establish or not are the following:

Example 1: Taiwanese manufacturer of components and systems for motorcycles and vehicles Example 2: Canadian manufacturer of packaging products for food and consumer products The analysis resulted positive but required the company to modify their strategy to start in Mexico with something more modest.

Example 3: Dutch manufacturer of rugs for the automotive industry After an origin analysis, the company decided to pause its investment plans due that the analysis showed that its materials were considered as a non-NAFTA originals.