Freeports are warehouses where the 0.01 percent store their collections of “art, antiques, wine, gold, jewels and other priceless artifacts and never pay taxes on them,” says Wyatt Cavalier in his newsletter, The WC. A warehouse in Geneva holds more than $10 billion in art never to be seen by the owners, who would rather avoid paying taxes on their Velazquez than look at it. Similar kite stocks exist in Luxembourg, Monaco, Singapore, Zurich, Beijing and Delaware.
They exist outside the formal jurisdiction of any country; the clients remain anonymous and the assets are kept secret.
And while you may never have heard of free gates, they’re a big deal in the art world:
- 28% of artists and collectors have used a freeport;
- 42% of dealers and brokers say their clients use them.
Why use a free port?
If you buy a painting for $10 million. from a dealer in France and want to bring it to the US (or anywhere else, really), you have to pay import duties as high as $2 – $3 million. Storing it in a free port gets around this. For around $1,000 a month, you’ll never pay these import taxes on your van Gogh.
When it comes time to sell your piece, you can also skip VAT on the freeport’s informal economy. The checkout is moved from your device to the buyer’s device and the money is moved from her Swiss bank account to yours.