A Freeport is defined as either a Special Economic Zone (SEZ) or a Free Trade Zone (FTZ). SEZs are geographical e.g., a region that covers all industrial and service sectors. An SEZ has beneficial tax, tariff and duty on goods and services. SEZs have differing commerce rules from the rest of the country. FTZs are known as ‘commercial-free zones’. Commonly they are fenced in, offer duty-free areas, warehousing and storage for goods transiting the UK.
REPORT
A bright future for the UK’s Freeports
As announced by the Chancellor, Rishi Sunak in the 2021 budget, the UK will soon have eight new Freeports. But the Government specification for Freeports includes requirements to work as an Innovation Hub for regional growth and support the transition to Net-Zero.
To support this, the Connected Places Catapult has launching our Freeports Playbook, a first step in establishing the fundamentals of Freeport objectives, their global positioning, potential benefits and operational models.
What is a Freeport?
Freeports – a ‘win-win’ strategy for the United Kingdom
Freeports have the potential to be powerful engines of regional growth, by attracting foreign direct investment and stimulating innovation and collaboration.
As part of the Government’s UK’s strategic objectives, Freeports have been devised to:
- Build Back Better – Freeports have the potential to be powerful engines of regional growth, by attracting foreign direct investment and stimulating innovation and collaboration.
- Levelling Up – To address regional inequalities for example ‘the North-South divide’ by providing opportunities not just in the South East by supporting regional economic growth nationally. As a UK government initiative ‘levelling up’ is a cross Whitehall departmental plan to implement better links with regional partners and decentralise power from the South East. The UK government has set up a £4.8 billion fund for regional infrastructure projects. Support is provided by the Department for Transport, Ministry for Housing, Communities and Local Government together with the treasury.
- Transition to Net Zero – Investment of £12 billion as an ‘enabler’ to facilitate industry, business and, transportation to plan for a ‘greener economy’
The UK’s Global Position as a Freeport
The majority of UK maritime ports and airports have an international outlook and global presence and this becomes even more important in the case of Freeports. UK Freeports have the opportunity to build a strong global position by building on the UK’s key relevant characteristics:
- attractive investment ground;
- a global reputation as a good place to do business;
- a robust platform for innovation; and
- ease of access to import and export markets.
The UK is in a extremely good position to take advantage and become a global player when implementing Freeports.
Locating my business in a Freeport – what are the benefits?
The benefits of locating in a Freeport are many:
- customs, reduced tariffs e.g. VAT,
- stamp Duty Land Tax;
- enhanced Structures and Building Allowance; and
- enhanced Capital Allowances.
Further Reading & Listening
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