Offshore warehouses stuffed with treasures of the wealthy to avoid tax

Published:  26 Dec at 6 PM
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The creative use of tax avoidance schemes has hit a new high with the discovery of massive freeport warehouses in offshore havens crammed with artworks and treasures belonging to the world’s mega-rich.

Usually located close to docks or airports near major world financial centres such as Zurich, Geneva, Singapore and Monaco, the giant, high-security complexes allow unloading straight from private jets and motorised yachts. The freeports are a financial no-man’s land due to the suspension of taxes and customs duties.

For example, Geneva’s freeport boasts the ultimate in high-tech security, is the size of several football pitches and contains assets worth billions of dollars. The tax and duty exemption is intended as a temporary measure covering goods in transit, but has become the perfect way to amass high-value items without paying the correct dues for their importation or resale.

The trappings of extreme wealth stored in this manner can remain undetected for decades, and artefacts can be sold on without attracting capital gains tax or VAT. The entry of the formerly semi-secret freeports into the glare of media attention has been spurred by a distrust of financial assets since 2008, after which investors began diversifying into alternatives giving higher returns with less risk.

Vintage cars are an asset class which has seen a 430 per cent increase over the last 10 years, with freeports the perfect answer to secure storage with built-in tax avoidance. The world-famous auction house, Christies, is the Singapore freeport’s main tenant, with 40 per cent of the entire space taken over for its fine art clients’ purchases.
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