June 22, 2018

Budget 2018-19: Freeport Regime

  • the corporate tax exemption granted to freeport operators and private freeport developers on export of goods will be removed;
  • Freeport operators and private freeport developers will continue to be exempted from the Corporate Social Responsibility (CSR) contribution;
  • The current tax regime will continue to apply until 30th June 2021 to companies which have been issued with a freeport certificate before 14th June 2018;
  • Repair and maintenance of heavy duty equipment will be introduced as a freeport activity;
  • An exhibition area being used for the purpose of vault activities will be authorised;
  • The 50% cap imposed on sales of goods on the local market will no longer apply;
  • The maximum period for warehousing of goods in the Freeport will be aligned to that of a bonded warehouse, that is 24 months. A moratorium period of 42 months will be granted on goods warehoused in the Freeport before 14th June 2018;
  • Provision of services relating to mobile capital will not be allowed within the Freeport. The holder of a Freeport certificate, issued before 16th October 2017, may continue to provide services within the Freeport until 30th June 2021;
  • Manufacturing activities will not be allowed in the Freeport. A transitional period will be granted to existing manufacturing companies; and
  • Enterprises outside the freeport zone will not be allowed to store goods in a freeport zone. However, authorisation already granted to a third party freeport developer to provide warehousing facilities to an enterprise outside the freeport zone for storage of goods will continue to apply until 30 June 2020.