Unlocking Growth
With Freeports
Freeports have emerged as a pivotal focus in discussions surrounding economic growth and international trade. With numerous benefits and opportunities to offer, they hold significant promises for businesses both in the UK and abroad. We delve into the latest developments in Freeports, including tax advantages, customs processes, and investment incentives, and how your business can get involved.
What are the changes?
In a move to stimulate economic growth, Chancellor Rishi Sunak unveiled eight new Freeports in the UK in 2021. These strategically located Freeports aim to drive investment, job creation, and regional growth. Each Freeport has a distinct focus, with areas like advanced manufacturing and clean growth taking centre stage. Additionally, a green Freeport model in Scotland aims to harness renewable and low-carbon energy opportunities, attracting significant funding and job creation.
Businesses can look to enjoy numerous benefits from Freeports, including:
Tax advantages: Freeports offer a range of tax benefits, including:
- Enhanced structures and buildings allowance, providing accelerated tax relief for construction, renovation, or adaptation of premises.
- Potential Stamp Duty Land Tax relief on qualifying commercial properties.
- 100% first-year allowances for plant and machinery primarily used within Freeport tax sites.
- Full relief on qualifying new properties and partial relief on expanded properties.
- 0% Employer NICs for eligible employees within Freeports.
Streamlined customs processes: businesses can enjoy streamlined customs procedures, ensuring faster clearance of goods. This facilitates improved supply chain efficiency and reduced administrative burdens. Tariff benefits include duty deferral, duty inversion, and duty exemption for goods re-exported from a Freeport.
Supportive planning environment: Freeports offer a supportive planning environment, with strong engagement from local authorities. Some Freeport sites have Local Development Orders in place, providing planning certainty. Public sector support extends to land remediation, site preparation, and skills programs.
Investment incentives: Freeports attract domestic and foreign investment through tax breaks, grants, and infrastructure access, stimulating economic growth in the region.
What are the challenges for businesses?
Businesses operating in Freeports should consider compliance with customs, tax, and regulatory requirements. Security measures and risk management are crucial to protect operations and reputation. Careful consideration of the local economic impact and adherence to responsible business practices is also essential. Specific legislation governs Freeports in the UK, with oversight by authorities like HM Revenue and Customs (HMRC) and local authorities.
What actions should your business take?
To harness the benefits of Freeports, your businesses should:
Understand the benefits and assess alignment with business goals. It’s essential to assess how Freeport benefits align with your specific business goals and operations. Consider whether a Freeport can enhance your supply chain, reduce operational costs, or provide strategic advantages.
Understand the benefits and assess alignment with business goals. It's essential to assess how Freeport benefits align with your specific business goals and operations. Consider whether a Freeport can enhance your supply chain, reduce operational costs, or provide strategic advantages.
Identify specific opportunities and potential partnerships. Once you’ve identified the benefits that resonate with your business, identify potential partnerships within the Freeport community. Collaborating with complementary businesses can lead to synergies and mutual growth.
Identify specific opportunities and potential partnerships. Once you've identified the benefits that resonate with your business, identify potential partnerships within the Freeport community. Collaborating with complementary businesses can lead to synergies and mutual growth.
Research Freeport regulations, customs, tax, and operational guidelines. Thoroughly research these aspects to ensure compliance and effective utilization of Freeport benefits. This knowledge will be crucial in navigating the Freeport environment smoothly.
Research Freeport regulations, customs, tax, and operational guidelines. Thoroughly research these aspects to ensure compliance and effective utilization of Freeport benefits. This knowledge will be crucial in navigating the Freeport environment smoothly.
Engage with Freeport authorities for guidance. Engaging with these authorities can provide valuable insights into the regulatory framework, permitting processes, and available resources within the Freeport. It also helps in building a positive relationship with key stakeholders.
Engage with Freeport authorities for guidance. Engaging with these authorities can provide valuable insights into the regulatory framework, permitting processes, and available resources within the Freeport. It also helps in building a positive relationship with key stakeholders.
Seek expert advice for compliance and tax planning. Consider consulting with legal, tax, and customs specialists who have expertise in Freeport regulations. Expert advice ensures that your business optimally utilises the benefits while minimizing risks.
Seek expert advice for compliance and tax planning. Consider consulting with legal, tax, and customs specialists who have expertise in Freeport regulations. Expert advice ensures that your business optimally utilizes the benefits while minimizing risks.
Establish necessary infrastructure within the Freeport. Ensure that your infrastructure aligns with the requirements and objectives of the Freeport, such as supporting efficient import-export processes or value-added activities.
Establish necessary infrastructure within the Freeport. Ensure that your infrastructure aligns with the requirements and objectives of the Freeport, such as supporting efficient import-export processes or value-added activities.
Collaborate and network with other businesses in the Freeport community. Actively seek out partnerships, joint ventures, or supply chain collaborations with other businesses within the Freeport community. Building strong relationships can lead to increased business opportunities, shared resources, and a supportive ecosystem that fosters growth.
Collaborate and network with other businesses in the Freeport community. Actively seek out partnerships, joint ventures, or supply chain collaborations with other businesses within the Freeport community. Building strong relationships can lead to increased business opportunities, shared resources, and a supportive ecosystem that fosters growth.
Expert opinion
Freeports hold immense potential for businesses seeking growth and investment opportunities. Understanding their benefits, navigating regulations, and engaging with authorities are essential steps in unlocking the advantages they offer, both domestically and internationally. While UK Freeports offer significant opportunities, you should also explore international Freeport locations, such as those in the Middle East, to fully leverage their advantages.
Bryan Bletso
Partner