PROSEC: how to know if your industry qualifies

PROSEC (Programa de Promoción Sectorial — Sectoral Promotion Program) is one of the most useful Mexican incentive programs for manufacturers that sell to the domestic market. Unlike IMMEX, PROSEC does not require exporting — it just requires that you produce in one of the 24 sectors that the Ministry of Economy considers strategic.

What PROSEC does

It lets you import specific inputs, parts and machinery at reduced or zero tariff, even when those same inputs under the standard regime would pay 5%, 10% or more.

The savings come from the import duty (IGI). VAT is paid normally on importation.

The 24 qualifying sectors

PROSEC covers these sectors (each with its own list of authorized tariff codes):

1. Electrical
2. Electronics
3. Furniture
4. Toys, games and sporting goods
5. Footwear
6. Mining and metallurgy
7. Capital goods
8. Photographic
9. Agricultural machinery
10. Diverse industries
11. Chemical
12. Rubber and plastic products
13. Steel
14. Pharmaceutical, medicines and medical equipment
15. Transport (except automotive)
16. Paper and cardboard
17. Wood
18. Leather and hides
19. Automotive and auto parts
20. Textile and apparel
21. Chocolates, candy and similar
22. Coffee
23. Food
24. Fertilizers

If your industry doesn’t appear here literally, it’s worth checking because some sectors are broader than they sound (e.g. “Diverse industries” covers many products).

What you need to qualify

1. Be a legal entity established in Mexico.
2. Be in good standing with SAT.
3. Active importers’ registry.
4. Prove that you produce in one of the PROSEC sectors. Evidence:
   • Articles of incorporation with corporate purpose covering the sector.
   • Plant address proof.
   • Detailed description of the production process.
   • Photographs of the plant and machinery.
5. Formal application to the Ministry of Economy with the full file.

How much you save

Depends on how much you import and which tariff codes you use. Examples:

• Electronics industry importing components: many tariff codes drop from 5–10% to 0%.
• Automotive industry: practically all imported input enters at 0%.
• Textile industry: yarns, fibers and fabrics can drop from 10% to 0% or 3%.

For a company importing USD 500K annually in inputs with average tariff of 7%, PROSEC savings can be USD 35,000 per year, not counting the cash flow improvement.

PROSEC vs IMMEX: which to pick

You can have both at the same time, but they solve different problems:

If you export and sell in Mexico: IMMEX for the input going to export, PROSEC for the input staying in Mexico. Yes, they combine.

If you only sell in Mexico: PROSEC is the right call.

If you only export: IMMEX is enough, PROSEC adds little.

What the process looks like

1. Feasibility diagnosis (1–2 weeks): review imported tariff codes and compare against the PROSEC list to estimate real savings.
2. File preparation (3–5 weeks): legal, technical and photographic documentation.
3. Application to SE and resolution (4–10 weeks): the Ministry may request clarifications.
4. Operational implementation: train the foreign trade team and customs broker so future imports use the PROSEC code on the customs entry.

Typical total timing: 3 to 5 months from start to operating under the program.

Common mistakes

• Not reviewing the specific tariff codes of the sector. PROSEC authorizes enumerated tariff codes, not everything your industry might use. Some critical codes may be excluded.
• Assuming the tariff always drops to zero. In many sectors it drops to 3% or 5% (still a saving vs 10–20%, but not free).
• Forgetting to renew/update. If you change the production process or add new tariff codes, the program must be updated with SE.

At TradeWay

We do a PROSEC feasibility diagnosis with concrete numbers before starting the procedure — you know exactly how much you’ll save before investing in implementation. Talk to a specialist to evaluate whether your operation qualifies.