Setting up a business in a UK Freeport is hugely advantageous to overseas companies. With the opportunity to expand your business, benefit from financial incentives and get your products in front of Europe’s largest consumer market, UK Freeports provide an incredible opportunity for overseas businesses to grow. However, as with any Special Economic Zone, the set-up, operation and incentives vary by country but UK Freeports are one of the easiest and most beneficial locations to set up a business.
What is a UK Freeport?
Freeports in the UK are a type of Special Economic Zone located close to airports and seaports. They are designed to facilitate global trade and are strategically located to support businesses that import and export. At present, there are 12 UK Freeports, located across England, Scotland and Wales. These Freeports offer the same financial incentives and operate in a similar way but each offers its own unique advantages. Thames Freeport is one example with enhanced benefits including a great location, outstanding global connections and the immediate consumer market right on your doorstep.
What are the Benefits of Freeports in the UK?
UK Freeports operate in unison, offering the same benefits and incentives regardless of which location you set up in.
0% Employer National Insurance contributions
Businesses operating in the UK are subject to paying tax contributions for employees in the form of Employer National Insurance. Employers are currently required to pay 13.8% of an employee’s earnings (rising to 15% in April 2025). For the first three years of operation at a UK Freeport, businesses can benefit from 0% contributions, a major financial benefit, especially with the recent rise in rates.
0% Stamp Duty Land Tax
All property purchases within the UK, both residential and non-residential, are subject to a Stamp Duty Land Tax payment. This is one of the biggest financial burdens for businesses but at a UK Freeport, companies get benefits from 0% SDLT, a huge saving when setting up a business in the UK.
100% Business Rates Relief
Business Rates are a UK tax on commercial properties which at UK Freeports, companies can benefit from a significant tax incentive of up to 100% relief in the first five years of operation in newly occupied or expanded premises.
40% of Rent Equivalent Saved Over First Five Years
Reducing rental costs for businesses setting up at a UK Freeport, businesses can benefit from up to 40% of rent equivalent over the first five years. This is a major saving in initial set-up costs.
10% Enhanced Buildings and Structures Allowance
The UK currently offers a standard 3% Buildings and Structures Allowance, allowing companies to claim a percentage of the construction costs. At UK Freeports, this allowance is enhanced to 10% for up to ten years, allowing businesses to save more on setting up.
Capital Gains Tax Relief
For businesses investing in qualifying assets within the Freeport, you can benefit from relief on Capital Gains Tax. A capital gains tax is the tax on profits realised on the sale of a non-inventory asset. The most common capital gains are realised from the sale of stocks, bonds, precious metals, real estate, and property. This allows businesses to sell assets without tax liability if proceeds are reinvested within the Freeport.
Simplified Customs Arrangements
One of the major benefits of setting up a business in a UK Freeport is the simplified customs arrangements. UK Freeports streamline processes to relieve administrative burdens and also offer duty relief on imported goods.
List of UK Freeports
Freeports in England
- East Midlands Freeport
- Freeport East
- Humber Freeport
- Liverpool City Region Freeport
- Plymouth and South Devon Freeport
- Solent Freeport
- Teesside Freeport
- Thames Freeport
Green Freeports in Scotland
- Forth Green Freeport
- Inverness and Cromarty Firth Green Freeport
Freeports in Wales
- Anglesey Freeport
- Celtic Freeport
How to Invest in UK SEZs?
Setting up within a Freeport can significantly reduce overhead costs but to invest in a UK SEZ and set up a business within a UK Freeport, it is important to understand the process and how it will work for your business.
Understand Freeport Incentives and Requirements
Before taking the step to invest in UK SEZs, it is crucial to familiarise yourself with the incentives offered and how they would be beneficial to your business. It is also important to know the requirements that need to be met in order to relocate your business and set up at a UK Freeport.
Choose a Freeport
With twelve Freeports across the UK, overseas businesses are spoiled for choice when choosing where to invest in a UK SEZ. While they all operate the same and offer the same incentives, both financial and logistical, each UK Freeport has its own unique characteristics and advantages. Thorough research will help you select a UK Freeport that aligns with your trade goals and requirements. For instance, Thames Freeport focuses on food and drink, sustainable construction and advanced manufacturing and has the best global connections.
Register with HM Revenue & Customs (HMRC)
It is vital for all UK businesses to be registered with the country’s tax, revenue and customs authority known as HMRC. In addition to it being a legal requirement for tax purposes, registering with HMRC also helps you to understand customs procedures. The UK Freeports utilise a Single Trade Window system to simplify customs processes and your HMRC registration will ensure your business is compliant with customs regulations.
Find Premises within the Freeport
Once registered as a UK business, you can secure your premises within the Freeport. Commercial property purchase benefits from 0% Stamp Duty Land Tax while non-residential rental benefits from saving 40% Rent Equivalent over the first five years. Operations need to be established within a designated Secure Customs Zone. This area must comply with specific security and monitoring requirements for duty relief on goods and you can contact the Freeport authority directly to secure your space.
Apply for Freeport Authorisation
Submit an application to operate within the Freeport zone ensuring you adhere to the specific Freeport’s application process. All applications require an EORI number, details of the business, PAYE Scheme Reference and the Unique Taxpayer Reference, all of which can be obtained through HMRC registration. Each Freeport has a dedicated management team to support businesses with their application process and offer tailored advice to help you maximise the benefits.
Network within the Freeport
It is extremely helpful for businesses relocating and setting up in a UK Freeport to join business networks within the Freeport to benefit from shared knowledge, potential partnerships and government-led initiatives. Many Freeports also work with Public Private Partnerships (PPP) that offer additional support or resources.