Freeports
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What are they, and why are they so important?
Freeports are special areas within the UK’s borders where different economic regulations apply. While incentives vary across different geographical and international locations, freeports are designed to stimulate employment and investment in the local area. They especially encourage manufacturing and design enterprises that import, process and then re-export goods.
The UK government and devolved governments have come together with local partnerships to set up the UK Freeports programme with the shared aim of increasing investment into the UK to ensure we can continue to grow into a more dynamic economy.
Freeports will benefit from a range of customs measures, allowing imports to enter the Freeport custom sites with simplified customs documentation and delay paying tariffs. This means that businesses operating inside designated areas in and around the port may manufacture goods using these imports, before exporting them again without paying the tariffs and benefit from simplified customs procedures.
In a freeport goods can be imported, manufactured, and exported without incurring domestic customs duties or taxes. These taxes are paid when the products enter the domestic economy, often at a reduced rate. Freeports also support economic activity with R&D incentives such as flexibility of regulations, tax credits, and tax reductions.
What are the economic benefits of freeports?
Freeports and free trade zones are created to stimulate economic activity in their designated areas. They have been found to encourage imports by lowering tax, duty, and administration costs. Inside the freeport, manufacturers can benefit from lower costs of imported components compared with those purchased outside the freeport zone.