The Mexican decree of August 15, 1983 states the
legal basis for the authorization and operation of maquiladoras. A
multitude of organizational forms have been designed to attract new
plants and to reduce the risks of operating a facility in a foreign
country. The more traditional forms of Maquiladora organization are:
1. Single corporation (any nationality).
2. Joint venture.
3. Shelter manufacturing.
4. Contract/subcontract operations.
5. Temporary import (PITEX).
Maquiladoras can have foreign management and
foreign technicians. These personnel may be issued unlimited
business visas to work in the facilities. Maquiladoras can acquire
real estate freely in the interior of the country, and in the border
areas or along the coasts, real estate can be acquired and
maintained in a trust.
The maquiladora firm is subject to all Mexican
taxes. However, since many Maquiladora plants are treated as cost
centers, they generate little income and pay little or no Mexican
corporate income tax. The maquiladoras must buy pesos in Mexico at
the prevailing rate to cover all salaries, wages, leases, local
services, federal and local taxes, insurance and any other expenses
incurred in Mexico. This exchange of foreign currency for Mexican
pesos provides Mexico with foreign exchange used to service its
foreign debt and trade with other nations.
In 1965 when the Border Industrialization Program
(BIP) was initiated there was little infrastructure in northern
Mexican cities to support the new and promising industrial
production sharing program. Mexican entrepreneurs responded to this
opportunity and established industrial parks which included water,
sewer, electric and natural gas service as well as roads. These
industrial parks had been a critical element in the growth of
Maquiladora plants. The owners of the parks frequently offer help to
any firm wishing to establish a Maquiladora in order to meet the
requirements of government regulations and in some cases assist in
financing. Approximately 90% of Maquiladora plants are adjacent to
the U.S.-Mexico border and most of the Maquiladora operations are
located in industrial parks.
The Maquiladora program has been very successful.
Evidence of its accomplishment can be shown by its impressive
growth, both in number of operations and levels of employment. When
the program began in the mid 1960s there were approximately 12
Maquiladoras in the border region employing about 3000 workers. By
1970, the number of operations had grown to 69 and the number of
workers increased to about 16,750. Five years later, the number of
plants had grown to 454 and the number of workers to 67,214. As
Table 1 shows, Maquiladora plants decreased in 1976 and 1977. During
1979 and 1980 significant growth occurred again and plants reached
620 by the end of 1980. Between 1981 and the end of 1983 Maquiladora
operations declined again. By the end of 1982 installations were
down to 585. However, from 1984 to the present, employment and
plants have continued to grow. Today there are more than 2000
operations giving employment to approximately 500,000 workers. The
Maquiladora program accounts for about one percent of the total
Mexican labor force and about two percent of the total Mexican
To be Continued
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