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What is a Maquiladora?

WHAT DOES MAQUILADORA MEAN?

Maquiladora is a noun derived from the Spanish - maquilar, which means “to perform a task for another”. In Mexico, it refers to a quantity of grain a miller would collect as a fee for grinding other farmers’ grain.

This definition reflects how most maquiladoras work; they provide services to corporate headquarters abroad and then receive compensation for the work rendered.

Today, the term is used for a Mexican manufacturing firm—wholly or partially owned by foreign nationals—which manufactures, assembles, packages or processes raw materials—or components—so that the finished product may be exported.

What is a maquiladora

There are two ways a foreign firm can create a maquiladora:

  • Establish a Mexican subsidiary (your own maquiladora)

Running your own facility means you will have complete control, and responsibility, for the day-to-day manufacturing operations and administration. You are also responsible for following city, state and federal laws and regulations.

  • Contract with a Mexican shelter company (maquiladora de albergue)

If you contract with a Mexican manufacturing shelter company (Maquiladora de albergue), your firm is only responsible for the manufacturing operations. The shelter company must answer for all administrative, staffing and legal issues and must be in compliance with all relevant regulations and laws.

 

The Maquiladora Program allows the foreign entity to ship machinery and raw materials into Mexico and to subsequently export the finished products.

Maquiladoras import components from the U.S., or other countries, to fabricate and then export a product—either directly by shipping it themselves—or indirectly by selling them to another Maquiladora or exporter. Mexican law allows a maquiladora to import most of its machinery from abroad.

The first maquiladoras were established along the U.S. – Mexico border, which includes the metropolitan areas in, and around, Tijuana, Mexicali, Ciudad Juarez and Matamoros. This has transformed these touristic and agricultural areas into thriving industrial centers.


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