How to export from Mexico in 2023

Foreign trade is one of the pillars of the Mexican economy. According to data from the National Institute of Statistics and Geography (INEGI), this activity accounts for more than 78% of the country’s Gross Domestic Product (GDP).

With this in mind, companies are increasingly interested in taking their goods beyond their frontiers.

Keep reading to find out all the necessary details for successfully exporting from Mexico in 2023.

What do you need in order to export from Mexico?

If you are looking for information on how to export products, you will have realized that there are certain recommendations, stages and aspects that need to be taken into account: 

Steps for exporting from Mexico

• Setting up a company. This step is one you only need to take once, and it is the most important.Establecer una empresa

Start by registering the business in the Federal Taxpayers Registry (RFC), which grants legal status to companies, as stipulated in Mexico’s tax and commercial laws.

The procedure is simple. Just go to the nearest Tax Administration System (SAT) office and register.

To this end, arrange for an appointment (it can be done online) and gather the documents specified. Any legal entity or individual involved in business activities can export, regardless of the size of the business, as what is most important is being competitive.

• Define the product to be exported. All kinds of goods can be exported but not all of them have the level of competitiveness necessary to boost sales.

For this very reason, it is essential to develop a project that endorses that the company meets the necessary conditions to be able to export and that products comply with the demands and needs of the clients abroad.

Once it has been verified that the goods are sellable, there are certain elements that need to be satisfied before they are sent abroad:

1. Quantity required by the client.
2. Quality.
3. Competitive price.
4. Guaranty in delivery delays.
5. Post-sales service (only if necessary). 

Defining the market. In this case, the Secretariat of Economy (SE) of Mexico recommends considering countries offering tariff advantages and greater viability.

For example, the United States offers more sales prospects and fewer commercial risks. Added to this is the question of transportation, which is quicker and more economical due to its geographical location.

The Secretariat of Economy also recommends the use of the Export Potential Map tool from the International Trade Center (ITC) which helps study the export potential of a product in different markets.

• Analyzing the market. Ideally, a study to try and respond to the following questions is carried out:

1. Economic questions. What is the average level of income of consumers in the target country?
2. Political questions. Does Mexico offer some kind of consular cooperation to aid you?
3. Legal questions. Are any products banned for export due to environmental, technical or phytosanitary reasons?
4. Socio-cultural questions. Does the product adapt to consumer habits?
5. Relating to the market. What about the demand and competition for the commodity

• Drawing up an international sales contract. This is done once the sale has been negotiated. The document guarantees that the entire process is concluded with full transparency.
• Learning the tariff regulations. According to the Secretariat of Economy, these may be as follows:

1. Ad valorem. It refers to percentage terms and is applied to the customs value of the commodity.
2. Specific. They are monetary by unit of measure.
3. Mixed. They combine the percentage and monetary terms of the previous two.

It is important for the goods to be included in the classification of the Harmonized Commodity Description and Coding System (HS) under the auspices of the World Customs Organization (WCO).

The aim of the classification is to assign to all commodities codes of up to a maximum of six digits and, subsequently, add those of each country. This is known as the tariff code and, in Mexico, it comprises eight digits.

Non-tariff regulations and restrictions refer to the measures imposed by governments to control the movement of goods, and they are divided up as follows:

1. Quantitative non-tariff regulations. These are permits, quotas for goods that can be exported as well as measures put in place for unfair practices.
2. Qualitative non-tariff regulations. These are the rules for labeling, containers and packaging, market of country of origin sanitary, phytosanitary, and quality standards.

• Preparing the logistics. Once the requisites and documents needed for exporting the goods have been prepared, it is time to bring the product into line. To this end, 3 stages need to be complied with:

1. Shipment.
2. Transport.
3. Insurance

• Customs clearance. This refers to the physical presentation of goods to the customs authorities.
• Payment of the exported goods. The payment means must be specified by the exporter and importer.

For the SE, the best means is by credit letter. A document issued by a bank laying out the commitment to pay an amount of money to a seller, provided the specified terms and conditions have been met.

There is also the option to pay by cheque or bank order and the international bank collection order.

What to keep in mind before exporting?

If there is good product take-up on the domestic market, there are greater options for success in the international market. In addition, the following considerations must be taken into account:

1. Understanding the laws applicable to the product that you wish to export.
2. Implementing, in due time and way, what is specified in the sales contract. This includes price, place of delivery and payment means, among others.
3. Setting up assertive communication with clients.
4. Carrying out a proper financial analysis.
5. Formalizing the necessary technical standards and certifications in the target market.
6. Implementing export logistics and complying with the appropriate changes required.
7. Studying the political and commercial risks of the nation for exportation.
8. Analyzing the market to which you wish to export.

What taxes are paid on exports?

In the Foreign Trade and Customs Law, the government of Mexico lays down the tax contributions such as taxes and duties on outgoing goods:

One of them is the General Export Tax (GET), which is the tax rate charged for domestic exporters to move their products to other countries.

There are exceptions for the GET. The amendment to the TIGIE (General Import and Export Taxes Act), drawn up in 2020, outlines the goods and products that are exempt from this tax.

The Customs Tariffs Commission likewise has the power to provisionally set export taxes.

For example, when exporting products to China, you need to take into account that some products are applied a special tax for consumption:

• Those imply a risk for health, public order and the environment.
• Luxury goods.
• Products generating energy consumption and those requiring a high degree of processing.
• Non-renewable petrol products.

In addition, the Foreign Trade Law and the Customs Law set a payment known as the Right to Customs Fee (DTA), which can be understood as payment for using customs facilities and storage of goods while they are being cleared.

How to justify an export

There is a series of documents which the company is obliged to keep, as supporting documents relating to its export operations. According to the Secretariat of Economy, the following are the most important:

• RFC. The Federal Taxpayer Registration is one of the requirements for exporting in Mexico. It verifies that you are a legal entity or individual with the necessary characteristics to carry out any lawful economic activity, for which there is an obligation to pay taxes.
• Sectoral exporters register. It is necessary for the export of products like beer, tequila, fermented or distilled alcoholic beverages, cigarettes, tobacco, iron, gold, copper, plastics, rubber, timber, glass, steel and aluminum.
• Commercial invoice. It is useful for identifying the seller and buyer of the goods or services.
• Entrust letter. It is used to inform the SAT that the customs officers can make clearances on behalf of the exporting company.
• Letter of instruction to the customs officer. It is a document that includes suggestions to the customs officer for carrying out a customs clearance.
• Packing list. It provides you with the details of the goods to be exported.
• Certificate of origin. It is used to get preferential treatment as it specifies that your goods are of Mexican origin. Its provisions may vary depending on the country to which you are exporting.
• Transport document. It specifies the means of transport, freight and packaging of the goods from the country of origin to its destination.
• Documents that certify compliance with the non-tariff regulations and restrictions.

Conclusion

Exporting is a rigorous process, but, if you follow each step to the letter, it can become an almost automatic operation for which you only have to make sure that all the procedures are developed in order.

If you require support for your exports, at KENSA Logistics, we can provide you with advisory services. Get in touch and we can clarify any doubts you may have.