3 Things You Must Know Before Doing Business in Mexico
There are any number of great reasons to sell your products to Mexico. Mexico has a robust and growing economy and a thriving middle class. And, the median age in Mexico is 27 years old – an open-minded target market ready to adapt to new brands, new experiences and new products. They have a lifetime of consumption ahead of them with anticipated larger disposable incomes – a perfect market to introduce YOUR products to NOW.
Consider that Mexico is one of the most ‘open to trade’ countries in the world and has an economy larger than Canada, Korea or Spain. Combine that with an economy that’s booming and a sophisticated import infrastructure designed to support businesses that export to Mexico. Take a close look at the potential and you’ll quickly see the advantage to your bottom line.
Mexico represents market share you can’t afford to ignore. You can get the new business, or your competitors can. With so much new business to be had, exploring the idea of doing business in Mexico is a no-brainer.
Of course, crossing the border means dealing with government regulations – ours and theirs. It’s not complicated, but you must be compliant. Not just because it’s the law – though that obviously matters – but because it can cost you time and money and you can’t afford to waste either.
Here are three things you absolutely need to do before you start selling to Mexico.
1. You Must Register Your Trademark in Mexico
Registering, and protecting your trademark in Mexico is a must when doing business in Mexico. Having your trademark registered in the U.S. or Canada DOES NOT means you have legal rights to that trademark in Mexico. If you don’t register your trademark, you’re not prohibited from using it, but you could very easily lose it to someone else who decides to register it – they can do so legally if you have not.
Avoid costly litigation and potential headaches by registering your trademark BEFORE you export your goods to Mexico. It can be a long and costly process to defend your trademark, so it’s better to be prepared in advance. It’s like that old adage about closing the barn door after the horse has escaped – it doesn’t get the horse back!
It’s easy to access the Mexican government trademark databases to make sure your company or brand name(s) are not already in use, and haven’t been registered or applied for. Typically, the entire trademark process - application to approval - takes about 12 months.
Once your application is approved, your trademark is protected for ten years and can be renewed for new ten year periods an unlimited number of times.
2. You Must Comply with Mexican Product Labeling Requirements
Mexican law requires that all consumer products display accurate and detailed labeling information so that consumers can make informed purchasing decisions. Mexican law clearly defines the minimum information required for various products and of course, prohibits making false or misleading claims on any product.
Mandatory information includes product name, net quantity contained and manufacturer and/or distributor identity information as well as the origin of the product. This must all be done in Spanish.
Note that goods must be properly labeled to pass through customs. Avoid costly delays by having correct labels prepared for all the products you’re exporting.
Be aware that there are labeling requirements for your shipping boxes and containers as well and compliance will make it easy to move your goods smoothly across the border.
3. You Need to Have the Correct HS Classification Numbers for Your Products
HS stands for Harmonized System and is an internationally recognized system used to classify products so they can be easily identified by any country. Export codes are six digits and categories of products are then subcategorized with an additional four numbers, creating a ten number HS classification.
For example, the category of computers might have a six digit code: 123456 and a laptop, a subcategory, might have an additional 4 number code: 1234. Therefore, the number 123456-1234 is the HS code that allows anyone in any country to understand that you’re exporting a laptop computer. Simple and easy to understand in any language – hence the harmony!
You’ll also encounter the term Schedule B – a schedule of classification used internationally and here in the U.S. administered by the U.S. Census Bureau. By international agreement, most countries recognize the same first 6 "harmonized" digits. These are the first 6 numbers (Schedule B) and are usually adequate for export purposes.
Are you wondering adequate for what? Good question! You’ll need to know if there are any tariffs that will need to be paid or whether a product qualifies for a preferential tariff under the Free Trade Agreement. The class of goods determines appropriate tariffs.
And, your schedule B number is needed to fill out several required documents including the Shipper’s Export Declaration, Certificates of Origin as well as other necessary shipping documents.
Finally, realize that while at first glance it may seem like there’s a lot to know, perhaps a new set of rules that feels like ‘one more thing to do’ – they’re really quite simple. And, the Mexican market represents SO much potential, that learning the regulations are a small price to pay relative to the profits to be made.
Mexico is our next door neighbor and their economic growth spells your opportunity. If you’d like more information or have specific questions, please contact me directly at: spiancone@mexicosalesmadeeasy.com or call (619) 616-2973.
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