Announced by the UK government as one of their key post-Brexit ideas, freeports are expected to help “turbo-charge post-Brexit trade”. The UK government set out how it would establish these innovative freeports across the UK to “create jobs, drive investment and regenerate communities”.
Freeports are designated zones where the normal tax and tariff rules of the country do not apply. Goods in freeports can be imported, manufactured and re-exported without being subject to customs checks, paperwork or import tariffs. Freeports are a great opportunity for international businesses to consider when looking to set up and expand in the UK.
Ian Matthews, International Partner, says: “Freeports have been hugely successful for other countries around the world. This latest UK version offers a great opportunity for international businesses to expand their presence in the UK while maximising a range of tax incentives. Freeports are an important part of the UK’s plan to offer a post-Brexit trade-friendly environment to businesses.”
For businesses getting to grips with the complexities of shipping goods between the UK and EU, the chance to minimise customs formalities by using a freeport may be a particular attraction. Other countries with freeports have not always seen them become hubs for sustainable economic development but they certainly offer something different and should be considered by international businesses looking at how to structure their UK operations.
In this year’s Budget, the Chancellor announced plans to set up freeports in eight locations around England, with ongoing discussions on more freeports in Scotland, Wales and Northern Ireland. He confirmed that East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth and South Devon, Solent, Teesside and Thames had been successful in the freeports bidding process for England. Subject to agreeing their governance arrangements and successfully completing their business cases, these freeports will be operational from late 2021.
Businesses in these tax sites will be able to benefit from the following tax reliefs:
For more information on freeports and how they might fit into your UK expansion plans, please get in touch with our team.