Freeports: Billionaire art collectors’ tax-free playgrounds by Alex Cutts
International trading in the art world is common practice. With billionaire collectors being based at all corners of the globe, trades within the industry are often dealt with overseas - where pieces face monumental customs fees upon arrival. This is where freeports come in.
Disguised as warehouses from the outside – freeports are tax-free zones that dominate the art industry. They are areas of land exempt from certain national legislation, including VAT and customs laws. Many freeports also offer a whole new level of security, keeping pieces closely guarded behind bulletproof walls and under 24-hour surveillance.
As such, they are commonly used to store billionaire’s goods, as they host no fees and leave no trace on their wealth and status. Artworks are stored with complete anonymity, making them invisible to local authorities. This act of secrecy allows dealers and their private collections to appear invisible to their competitor investors.
On the border of France and Switzerland lies one of these secret warehouse complexes: the Geneva Freeport. This freeport is a 60,000 square metre plot of land, rented by the city of Geneva, where assets are stored and safeguarded. It is reported that the Geneva freeport is home to a million pieces of artwork, including the works of some of the most notable names in the industry, such as Picasso and da Vinci.
While stored, items will often gain value. But by keeping these pieces locked away for money’s sake they are hidden from the eyes of gallery goers and fine art enthusiasts. Leonardo da Vinci’s Salvator Mundi broke world records back in November 2017 when it was sold at auction for a sensational $450 million. However, after its previous sale in 2012, it was stored in the Geneva Freeport - away from the eyes of the public.
With freeports being home to almost 80 percent of artworks at some point in their existence, these secret warehouses are set to become bigger and more common within the industry. They will continue to make tax arrangements, transactions and the preservation of art much simpler.
Gatekeeper invites you to consider the implications of these ‘playgrounds’. What is ‘value’? Does monetary value outweigh the artistic value of a piece? When the former is favoured over the latter, who loses out? And, the larger question, if art’s purpose is to capture and display, is it fulfilling this if it’s locked in a building, away from the world?