Starting a manufacturing operation in Mexico offers a wealth of opportunities to foreign entities looking to leverage the many advantages offered by welcoming government agencies, a trained workforce, an established infrastructure, and lower operating costs.
However, to enjoy these privileges, manufacturers need to comply with many complex rules and regulations, file reports in a timely manner, and demonstrate that the company is trustworthy to government officials. If not, a company may be exposed to significant fines, potential legal problems, and a tarnished reputation with regulators and the local community.
This is when building a relationship with a reputable local partner that offers superior accounting services in Mexico comes in handy.
Why Compliance Is So Important
Any company operating in Mexico is subject to steep fines and penalties if they violate relevant rules and regulations, even if it happens inadvertently. In addition, all corporate accounting needs to abide by Mexican Financial Reporting Standards regardless of where their headquarters or other operations are located. Financial reports also need to be made to tax authorities on a monthly and yearly basis.
Examples of the types of reporting required in Mexico include:
1) Mexican Tax Authority (SAT) requires annual reporting of financial, tax, pricing, foreign trade, and other details in the form of an Informative Return for manufacturing and Export Services.
2) Value Added Tax (VAT) in Mexico is 16%. However, there are programs where this rate can be lowered to 0% for a period of time if the manufacturer applies for and complies with the requirements and reporting deadlines,
3) Payroll and withholding taxes are reported and paid to SAT. These also tend to be some of the more time-consuming business activities, and reporting requirements can consume inordinate amounts of time and resources to assemble.
4) Monthly reporting to the National Institute of Statistics and Geography about the value of imports (raw materials, packing, VAT of finished goods, etc.).
The list goes on and on.
Tetakawi Assumes These Responsibilities
When you partner with Tetakawi, accounting and financial reporting are taken care of for you. If any issues or problems arise, it is their responsibility to figure out a solution that works for all parties.
In addition, Tetakawi does the reporting and maintains permits that support its AAA VAT Certification and passes on the hard-earned benefits from this designation to the manufacturers who are part of its shelter services program. They also manage any external governmental audits that may rise.
Conclusion
Tetakawi has been helping companies from around the world relocate and establish manufacturing operations in Mexico for more than three decades. The company offers a myriad of advisory services—including accounting services—and ongoing support programs to help manufacturing companies optimize operations in Mexico while avoiding potential financial and compliance risks that come with operating in a foreign country.
As a respected local organization, Tetakawi can take on fiscal responsibilities for its partners and file any and all necessary reports with the various agencies. It has established systems in place that ensure compliance with federal, state, and local rules and regulations.
In addition, reliable accounting ensures that accounts payable and supplier accounts are managed properly. Because doing business in Mexico is built on trust and relationships, it is essential that a foreign entity select a local partner that brings these qualities to the table.