New Nearshore Americas White Paper Explains Mexico’s Shelter Model

The latest white paper produced by Nearshore Americas explains how foreign firms can take advantage of the growing business opportunities created by Mexico’s recent reforms.

Companies looking to capitalize on the changes in Mexico can opt to contract out work, set up a joint venture, outsource tasks, establish a wholly-owned subsidiary, or work with a shelter operation.

The paper explains how a foreign company can set up a virtual captive unit (shelter) in Mexico while maintaining full control and transparency related to all operation-incurred costs.

“It saves the client from large-scale investments in physical assets or human capital, without the requirement that a legal presence be established in Mexico,” says the paper authored by Tim Wilson, entitled “Understanding Mexico’s New Shelter Model.”

Under the shelter model, the service provider builds out the center to fully comply with the customer’s guidelines – everything from development methodologies and processes to team structure and corporate culture.

“This can be done within the provider’s existing facilities, or it can be built from the ground up for the client at a designated site,” the paper explains.

Shelters also help to future-proof an investment from any changes to legislation, and from the sometimes inconsistent and convoluted interpretation and implementation of local, state, and federal law.

Mexican nationals, with their knowledge of the country’s business culture, have the means and ability to navigate these waters. In contrast, non-Mexicans might find the required levels of engagement and patience to be a significant barrier to investment.

Sheltering is new kind of outsourcing model.  Under the system, clients can also choose more selective engagements with a virtual captive nearshore delivery center, or the use of offshore staffing services – a flexible option in which a client can manage a remote development team as if it were their own.

Thanks to recent reforms and proximity to the United States, Mexico is becoming an even more competitive nearshore destination.

“Mexico’s robust economy, helped by the Congress’s recent approval of 34 reforms to financial and banking laws, is now moving with unprecedented dynamism and speed,” the report notes.