Freeport Access at the Saldanha Bay Industrial Development Zone

"need to operate as a freeport"

To be globally competitive in the maritime services and energy sector, the Saldanha Bay Industrial Development Zone (SBIDZ) realised that it would need to operate as a freeport. A freeport is an area designated by the government of a country where Special Dispensations such as little or no tax impositions are active to encourage economic activity.

Presently, there is no specific legislation on how a freeport could be set up. Therefore, enabling legislation was used to design a creative solution model based on leveraging various fiscal incentives, namely the:

Department of Trade Industry and Competition: incentives on the Black Industrialist Scheme and the Special Economic Zone Fund.
Special Economic Zone (SEZ): tax incentives that the National Treasury gazetted in July 2018. All eligible investors in the SBIDZ may access the Accelerated Depreciation and Building Allowance Incentive (Section 12S of the Income Tax Act), the Youth Employment Tax incentive, and reduced Corporate Tax Rate from 28% to 15% (Section 12R of the Income Tax Act).
Customs-Controlled Area (CCA): incentive pertains to the exemption of duty or VAT within and out of the zone.

The CCA incentive is the anchor that enables the freeport to operate on a parallel view to the global freeport definition as it is a SEZ. Its strategic positioning alongside uninhibited access between land and sea, creates a competitive advantage for the SBIDZ. This is beneficial for tenants and customers in the following ways:

Cost Savings: no import and or export duties
Operational Efficiency: storage of goods without time limitations.
Increased Cashflow: no upfront 15% VAT payment on parts and equipment coming in for repairs and maintenance.
Time Efficiency: less customs procedures for goods that move into, within and out of the zone meant for export destinations.

Investors in the SBIDZ can register as Customs Control Area Enterprises (CCAE) and be eligible for customs duty and VAT incentives for export-focused trade.

There is a guide available on SEZ Tax and CCAE incentives that simplify these processes and provide certainty for businesses in the zone that import, add value, store, and re-export their products. This guide steers to aid zone tenants in understanding what is possible and how their businesses and operations can qualify to use the available incentives.

The SBIDZ freeport model announces that the Port of Saldanha Bay as a Commercial Port of entry that allows for crew changes, special conditions for Visas and Work Permits for investors, their foreign employees, and family members. Complementing these factors is the ease of access to information and service delivery facilitated by the Satellite One-Stop-Shop (OSS), ensuring the investors do not need to leave the freeport to obtain services that allow for their smooth operations.

Alongside offering smooth
operations, the port provides seamless and secure access from the quayside to
the back of the port, thus enabling the efficient serving of the passing marine
traffic.

Appendices

● SEZ tax and CCAE incentives guide
(link)

● Visa and Work permit requirements
(link)