Two Welsh freeports are to be created with the aim of bringing 20,000 jobs and investment worth £5 billion, the Welsh and UK governments have announced.

The Port of Holyhead on Anglesey and a joint bid between the ports of Milford Haven and Port Talbot, submitted under the name the Celtic Freeport, were both successful.

They were chosen to access renewable energy opportunities and are expected to contribute to the UK’s net-zero ambitions.

Eight freeports have already been set up in England, with a further two soon to be operational in Scotland.

Scottish ministers say the sites in Cromarty Firth and the Forth should become operational later this year.

Here’s everything you need to know about freeports.

What are freeports?

Freeports aim to create economic activity — such as trade, investment and jobs — near shipping ports or airports.

They allow goods to be brought in with less red tape, and then new products made with those goods are exported without heavy export charge.

Manufacturers in freeports can import raw materials tariff-free — paying tariffs only on finished products leaving the site for elsewhere in the UK.

Companies inside the sites are also able to claim lower property taxes, such as on new buildings they buy.

Firms also benefit from lower rates of national insurance if they take on new staff.

Where are the UK’s freeports?

Freeports became one of the big post-Brexit policies of the Boris Johnson government. Several freeport locations were announced by Rishi Sunak last year when he was chancellor.

Teesside became the first to enter operation, in November 2021.

Others in England are the Thames freeport in Essex; sites near Liverpool; Plymouth and Hull; shared freeports for Felixstowe and Harwich and Southampton and Portsmouth; and one near East Midlands Airport.

In Scotland, Cromarty Firth and the Forth were chosen from five areas that applied for freeport status.

Northern Ireland’s government says it is working with the Treasury to identify whether the freeport model can be adopted under its post-Brexit arrangements.

In a think tank report in 2016 when he was a new backbencher, Mr Sunak wrote: “Brexit will provide the UK with new economic freedom, and the government should take the opportunity to create freeports across the nation.”