Where can you store a large collection of valuable art and other collectibles, assuming you don’t have a secure, climate-controlled attic on your house?
For many high-net-worth individuals, free ports are their attics of choice. Over the past decade, these century-old former warehouses have become the repositories of great works of art, rare automobiles and coins, fine wines, and even gold bars and other precious metals. Especially large contemporary art pieces like massive Christo sculptures and even mini-submarines (among the newest toys of adventurous, super-wealthy people) are stored at these facilities.
The key motivating factors for warehousing these expensive items are security, confidentiality and tax advantages. Because the goods in a free port are technically in transit—the bonded warehouses were initially built to store goods in between shipments—they are accorded special tax-exempt treatment. This remains the case today, even if the valuables are stored for very long periods of time. The Economist magazine estimates that hundreds of billions of dollars’ worth of valuable art and other extremely valuable items are stashed away in such uber-warehouses.
Although free ports are well known to the super wealthy, their confidential status has made them largely unfamiliar to the general public.
LeConte “Conte” Moore, managing director at insurance broker DeWitt Stern in New York, said that while there are some advantages to storing valuables in free ports, collectors should think twice before putting all their eggs—Fabergé or otherwise—in one of these warehouses.
“Free ports often contain an enormous amount of highly valuable art in one location, which creates a large concentration of risk,” Conte said. “Because of this, insurance companies won’t always offer the lowest rates to insure these valuables.”
Far From Free
The world’s best-known free port is in Geneva, Switzerland, a former grain facility from the 1800s that now houses some of the world’s finest art. Customers pay around $12,000 a year to rent a small room within the facility to store their treasures. Switzerland houses five other free ports, the most of any country.