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The establishment of wholly owned subsidiary allows foreign manufacturers to maintain complete control over all aspects of their business. This involves a long-term commitment and requires a great deal of knowledge as to how business is done in Mexico, but also reduces costs, especially for operations with over 200 employees. The option is more appropriate for large multinationals that have had operations in Mexico for several years and whose personnel are familiar with Mexican business culture. It is important to note that many of the companies operating wholly owned subsidiaries in Mexico began operations through the use of a contract manufacturer or a shelter operator, and later established a more permanent presence.

Joint Venture With A Mexican Partner

A joint venture with a Mexican partner is an attractive alternative when the foreign owned manufacturer needs a partner that knows the local business environment. This option involves establishing a strategic alliance in which each party contributes its expertise, technology, or capital to the jointly owned maquila. However, many foreign manufacturers are reluctant to associate with Mexican partners and shy away from this route, which explains why the use of a shelter operator, an intermediate option, has surged in popularity in recent years.

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