What is a Freeport?
A Freeport is a special economic area containing tax and customs sites where different economic regulations apply. Welsh Freeports are a joint program between Wales and UK Government.
Aim of Welsh Freeports:
- Promote regeneration and high-quality job creation.
- Establish the Freeport as a national hub for global trade and investment across the economy.
- Foster an innovative environment.
- In return, businesses will benefit from simplified customs procedures, relief on customs duties, tax benefits, and development flexibility.
- Aims to attract £1.4 billion worth of investment in the green energy sector.
- Create >3,500 jobs and generate £500 million in Gross Value Added by 2030.
- The Freeport will focus on marine and low carbon energy and will embark on a variety of infrastructure programmes including the Holyhead port redevelopment, the restoration of the railhead and track, and test and pilot sites on the seabed.
- Aims to attract significant investment including £3.5 billion in the hydrogen industry.
- Creation of 16,000 jobs and £900 million in Gross Value Added by 2030.
- The Freeport will focus on low carbon technologies like floating offshore wind, hydrogen, carbon capture, utilisation and storage and biofuels to support the accelerated reduction of carbon emissions. This will be supported by the development of land and quayside space and bringing a disused railhead back into operation, to enable infrastructure to support development.
Each Freeport will have four zones:
- Impact Zone: area expected to benefit most directly from economic impacts of Freeport.
- Outer Boundary: typically, 45km but a corridor between Milford Haven and Port Talbot. All Freeport measures must be within this boundary.
- Tax Sites (explained below)
- Customs sites (explained below)
Businesses investing in a Welsh Freeport will benefit from the following tax site measures in up to three sites:
- 100% business-rate relief for five years, Enhanced Structures and Building allowances for ten years, 100% enhanced Capital Allowances to February 2028, Employer National Insurance Contributions of 0% to 2028 or 2031.
- Land Transaction Tax relief (subject to Welsh Government legislation) for 5 years.
- Tax relief makes Freeports an attractive option for investment and growth.
Business Rates Retention
- Councils can keep 100% of business rates growth for 25 years.
- This creates a stable source of income for councils to fund important projects such as road improvements, housing developments, and new business parks, which are attractive to new businesses and stimulate economic growth.
- Freeport businesses benefit from simplified customs procedures and duties relief.
- Simplified customs arrangements save businesses time and money, making it an attractive location for trade and investment.
- The Freeport planning environment supports tax and customs site development.
- This streamlines the planning process and helps businesses to quickly secure planning permission for projects, reducing costs and delays.
- Freeports enjoy direct access to regulators through a Freeport Regulation Engagement Network.
- This can help businesses to efficiently bring innovative products and services to market, reducing regulatory barriers and promoting innovation.
- It also provides an opportunity for businesses to work collaboratively with regulators to shape regulatory policy and promote a supportive environment for innovation.
- Each Freeport is granted up to £25 million in seed capital funding to address infrastructure gaps in tax/customs sites that are holding back investment.
- This supports the development of key infrastructure projects such as road and rail connections, port facilities, and digital infrastructure.
- By addressing infrastructure gaps, Freeport businesses benefit from improved connectivity and efficiency, making it easier to access markets and customers.
Trade and investment
- The Department for Trade and Investment will provide targeted promotion to support Freeports, helping to attract and secure investment and exporters.
- Celtic and Angelsey Freeports will outline their business plans and define zones where tax and customs arrangements apply.
- Freeports will develop a stakeholder and communications plan.
- They will establish a company and investment board to deliver the Freeports.
- Once Freeports have finalised their business plan, they will release instructions to businesses on the next steps.
Please visit the Celtic Freeport and Anglesey Freeport websites for further information.
Celtic Freeport: https://www.celticfreeport.wales/EN/pages