When wealthy people look for safe places to park their wealth, they often turn to art. In the past, when art was purchased it usually was displayed in the owner’s home or business, or perhaps lent to a museum. Apparently, that’s no longer the case. Many wealthy people are buying art simply for the investment potential. They don’t want to deal with all the hassles of displaying, insuring, and securing it. The New York Times says they have the art stored in low-profile locations known as free ports. The ports help avoid some taxes and also ensure the art is secure and stored in climate-controlled environments. The art might not be see by anyone for decades.
Free ports originated in the 19th century for the temporary storage of goods like grain, tea and industrial goods. In the last few decades, however, a handful of them — including Geneva’s — have increasingly come to operate as storage lockers for the superrich. Located in tax-friendly countries and cities, free ports offer savings and security that collectors and dealers find almost irresistible. (Someone who buys a $50 million painting at auction in New York, for example, is staring at a $4.4 million sales tax bill. Ship it to a free port, and the bill disappears, at least until you decide to bring it back to New York.)
At least four major free ports in Switzerland specialize in storing art and other luxury goods like wine and jewelry, and there are four more — most newly minted — around the world: Singapore (2010); Monaco (2012); Luxembourg (2014); and Newark, Del., (2015).