The new British prime minister's stated intention to make Britain the world leader in free ports may be the way to kick-start a new era of growth. The Free ports programme found in America under the name of "Foreign Trade Zones" and has largely been very successful. Free ports can be set up around existing maritime ports as well as airports they will be geographically inside the UK but legally they are considered to be outside a country's borders. Goods and raw materials can be brought into the free port and stored without paying the host country's customs duty. Whilst in the free port items can be created or finished in a factory within the free port and then brought into the UK, after paying tarrifs, or they can be shipped out to other markets.
Rishi Sunak the new chief secretary to the treasury, wrote a report "The Free Ports Opportunity" in 2016 on the benefits of free ports during his time at the think tank The Centre for Policy Studies and may now have the opportunity of overseeing his own vision.
European manufacturing businesses that are already trading with the UK may find that the creation of free ports will enable them to create a company in the UK allowing them to set up a factory within a free port where they could bring raw materials and make their products, subsequently marketing them to the UK whilst enjoying the advantages of not paying customs duties on entry to the UK, together with the considerable reduction of bureaucratic checks and paperwork, saving time and money.
Giambrone's corporate and commercial team have considerable experience in assisting businesses with all aspects of setting up a UK company, including providing a bank account and recommending professional advisors from other disciplines in the UK.
There are a number of areas in Britain that are interested in bidding to become a free port Tilbury and Teeside are front runners. In order to get the project off to a flying start, it is likely that tax incentives will be offered by the government. Rishi Sunak has commented that if the British project is as successful as the American free port system it could generate around 86,000 jobs.
There are, of course, dissenters amongst the Opposition party who suggest that it is a way for the wealthy to store all manner of luxury items without paying customs duties. The Labour Party also maintains that free ports will simply redistribute economic activity as opposed to generating it. However, all evidence is to the contrary as if raw materials are converted into goods without the customs charges it would be a good thing; even if free ports merely trigger redistribution only that would also be a good thing.
The government's Free Port Advisory Panel will almost certainly take full advantage of the newfound economic and bureaucratic freedoms to recommend the creation of the most attractive proposition for businesses that they possibly can and for the first time in 45 years, the UK will be able to operate under an independent trade policy.
If you would like to know more about setting up a company in the UK to operate within the free ports when the programme is established please click here.