Definition of freeport

Freeports are warehouses in tax-free zones. Originally they were intended as spaces to store merchandise in transit, but they have become popular for the storage of valuables, including art, gold and wine collections – often for long periods of time.

Goods entering freeports are not subject to customs duties. Goods sold in the freeports are not subject to value added tax. No withholding tax is collected on capital gains, though sellers may need to report to the tax authority in their country.
Some of the best-known and biggest freeports are located in Geneva, Singapore and Luxembourg.
Critics have raised concerns that freeports could be used to hide illegally acquired assets, to launder money or evade tax. Operators of freeports reject the suggestion, saying that customs officers in the various jurisdictions have access to inventory data of what is stored in the freeports. Information on beneficial ownership however is not captured.

Freeport in the news

In 2015, the FT reported that freeports have benefitted from an art boom. Decked out with surveillance systems, climate control and private showrooms, they appeal to wealthy art collectors.

Freeports have become a one-stop shop. Galleries and art lenders have offices in them where clients can view, buy and sell art. Art lovers may decry beautiful works being hidden away in vaults, but those who see it as an investment argue they need to be kept in pristine condition to preserve their value. [1]