For mid-size U.S. companies, expanding to Mexico is rarely a question of opportunity alone. The primary constraint is operational risk: uncertainty around labor obligations, regulatory exposure, tax compliance, and long-term control. In practice, hesitation to expand often stems from the perceived cost of making structural mistakes—not from a lack of talent or market potential.
This risk-first mindset is not anecdotal. It aligns with empirical research on how CEOs and founders evaluate international expansion.
What research shows about how CEOs decide to expand internationally
In practical terms, this means that mature organizations—regardless of country of origin—tend to move away from:
Entity-heavy expansion models
Direct employer exposure in unfamiliar regulatory environments
Growth strategies that require long-term legal commitments upfront
Structures that separate operations from legal liability
Expansion paths that allow market entry without permanent structural decisions
Models that support compliance without internalizing foreign regulatory complexity
For decades, the default answer was to establish a local legal entity. While effective in some cases, that approach conflicts with the risk-contained structures many mid-size companies now prefer. As a result, alternative operating models emerged to address this gap. One of the most established of these is the Shelter Model.
What is the Shelter Model for U.S. Companies Expanding to Mexico?
The Shelter Model is an operating structure that allows U.S. companies to run teams in Mexico without establishing a local legal entity.
Originally used in manufacturing, the model has evolved to support service-based operations, including healthcare administration, legal outsourcing, accounting, and back-office teams.
Under the Shelter Model:
A local entity employs the workforce and manages payroll, benefits, and labor compliance.
The U.S. company retains control over daily operations, workflows, performance, and team management.
The U.S. firm avoids direct employer liability and regulatory exposure in Mexico.
By separating operational control from legal responsibility, the Shelter Model reduces operational risk. It enables companies to build and scale teams in Mexico without long-term legal commitments, making it a practical soft-landing approach to international expansion.
How the Shelter Model Works Under Mexico’s IMMEX Program
The Shelter Model operates within Mexico’s IMMEX Program (Decree for the Promotion of the Manufacturing, Maquiladora, and Export Services Industry), which is overseen by the Mexican Secretariat of Economy. This framework formally recognizes shelter operations and provides a protected structure for foreign companies operating in Mexico.
Under this model:
A licensed shelter provider acts as the legal employer and compliance entity.
The U.S. company does not establish a local legal entity.
Labor, payroll, tax compliance, and regulatory obligations are handled locally by the shelter provider.
From an operational standpoint, the model functions like a Department-as-a-Service:
The U.S. company selects the talent, defines the culture, and manages daily workflows.
The shelter provider serves as the Employer of Record, maintaining the legal and administrative infrastructure required under Mexican law.
Strategic Breakdown: Risk Exposure by Expansion Model
How does the Shelter model compare to other expansion methods regarding operational risk?
| Expansion Model | Legal Liability | Data Security Control | Speed to Launch | Admin Burden |
|---|---|---|---|---|
| Direct Incorporation (Subsidiary) | High: You are fully liable for all local operations. | High (self-managed): Full control, requires building and maintaining compliant systems. | Slow: 6–12 months to incorporate and certify. | Heavy: Requires internal legal and tax teams. |
| Traditional BPO (Outsourcing) | Low: Vendor assumes liability. | Low–Medium: Dependent on vendor controls. | Fast: Immediate, but generic. | Low: Vendor-managed. |
| Shelter Model | Minimized: Legal liability handled by local employer entity. | High: Company controls systems and workflows within compliant environments. | Fast: Typically 30–60 days to operational readiness. | Light: Provider manages admin; company manages talent. |
Success Story: Secure Operations in Healthcare
A U.S. healthcare company, known for its strict data protection, needed to expand into Mexico without compromising its security standards.
The company approached the expansion with a detailed list of non-negotiable requirements. Throughout the process, leadership remained in full command of its security framework, with our Infrastructure & IT departments working to put every control into place.
Key measures that sustained compliance:
- Physical, technological, and organizational safeguards — ensuring that only the right people had access, at the right time.
- Backup internet redundancy — preventing downtime and guaranteeing information availability.
- System configurations aligned to best practices — keeping every device and process resilient to risk.
- Oversight on every detail, including device assignment — so leadership never lost visibility or control.
- On-site technical support in Guadalajara — extending the same rigor of security management found in U.S. operations.
Conclusion: Expansion Without Exposure
The decision to expand to Mexico should be driven by strategy, not limited by fear. For mid-size US companies, the “do-it-yourself” approach to incorporation is often too slow and too risky. Conversely, traditional outsourcing often sacrifices too much control.
The Shelter Service sits perfectly in the middle. It offers the legal and administrative protection your General Counsel demands, with the operational control and cultural alignment your Operations Director needs. Whether you are deploying a legal outsourcing team or a high-security healthcare BPO unit, the Shelter model turns Mexico into a risk-free extension of your US headquarters.
Frequently Asked Questions
What exactly is a "Shelter Service" in Mexico?
A Shelter Service is a legal framework that allows foreign companies to operate in Mexico without establishing a local legal entity. The Shelter provider (like Intugo) acts as the “Employer of Record” and handles all legal, fiscal, and administrative compliance, while the foreign company retains full control over the employees’ daily tasks and operational processes.
How does the Shelter model mitigate labor lawsuits?
In Mexico, labor laws are very protective of the employee. Under the Shelter model, the provider is the legal employer in the eyes of the law. This means that any labor disputes or severance negotiations are handled and absorbed by the Shelter provider’s legal team, shielding the US parent company from direct liability and legal headaches.
Is the Shelter model only for manufacturing companies?
Originally, yes, but it has evolved. Today, the Shelter as a Service model is widely used by service-based industries, including accounting outsourcing, software development, customer support operations, and creative agencies. It allows these sectors to access Mexico’s talent pool with the same legal protections enjoyed by large manufacturers.
