Unless you’ve built a secure, climate controlled storage room in your home to protect your valuables and collectibles, storing those items in a freeport may be an excellent option.
What is a freeport? Here’s a good description of one such facility from Q Wealth Limited’s website:
Singapore FreePort is a state-of-the-art secure storage facility that operates in its own duty-free zone adjacent to Singapore’s Changi Airport. The largest such facility in the world (270,000 square feet to be precise), it provides wealthy collectors with tax-free storage for their valuables.
“When you go to a bank and rent a safe, nobody knows what goes in. It’s the same thing here,” says Alain Vandenborre, president and co-founder of Singapore FreePort. “They only need to give a code that indicates the broad nature of the item—gold, wine or a painting. There’s no value, no ownership, no inventory list—all details are confidential. We offer more confidentiality than Geneva.”
Private rooms and vaults, barricaded by seven-ton doors, line the corridors. Unlike the free-port facilities in Switzerland, however, which are simply secure warehouses, the Singapore FreePort sought to combine security and style. A gigantic arching sculpture entitled “Cage sans Frontières” (Cage Without Borders), spans the entire lobby.
Freeports, of course, are not free. Far from it. The freeport in Geneva (one of six in Switzerland) charges around $12,000 a year to rent a small room for storage of treasures. For an intimate look at Geneva freeports, click here to read a terrific New York Times article titled Swiss Freeports Are Home for a Growing Treasury of Art.
Here is more information on freeports from Kathleen Tierney’s article on the ThinkAdvisor site:
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.
But beware—there are potential drawbacks to storing your valuable tangible assets in a freeport. Tierney notes on RiskConversation.com:
[T]here are a number of risks to consider with this type of storage facility. As pieces stored in free ports are technically considered “in transit,” their tax exempt status is contingent on their location around airports, seaports or other transit hubs. Thus, collectors need to be aware of the potential impact of low flying planes, coastal floods, and other weather-related catastrophes. One way to mitigate these risks is to store valuables in different free ports around the country.
Tierney also cautions:
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.”
Ah, but there’s another downside to storing your treasures in freeports that these articles do not address. Namely, if you choose to store your valuables in a remote location, out of sight and far from home, you will be deprived of the enjoyment of viewing these tangible reminders of your achievements and may even be compromising the ability of your trusted advisors to adequately support their client relationships.
That is, unless you’ve contracted Archival Property Solutions to document and catalog these precious items. Wealthy individuals and families can now keep their catalog of tangible assets current, organized and stored securely for private, confidential access. Imagine the enjoyment and satisfaction of being able to view clear images (from multiple angles) of every item stored in a freeport hundreds or thousands of miles away.
No longer will UHNW owners risk furnishing incomplete data to accountants, wealth managers, attorneys and other trusted advisors. A detailed digital catalog, complete with photo images, digital copies of purchase receipts, current appraisals, and descriptions of condition, location, provenance and other details, also protects the owner’s investments by ensuring that they have the right type and amount of insurance coverage and are empowered to keep that coverage up to date as asset circumstances change.
What’s more, imagine this worst-case scenario: Soon after an owner takes the initiative to stash millions of dollars worth of tangible assets in an offshore freeport, he loses his life in an accident or falls victim to dementia or mental illness. Without access to the kind of documentation provided by Archival Property Solutions, the owner’s family might never be able to locate and recover those assets.
While storing your tangible assets in freeports around the world may offer significant benefits, doing so also drives home the urgency of four important words: Know what you own. When you have private, secure, around-the-clock access via any connected device to photos and data that help you stay on top of every aspect of your high-value assets, you have the knowledge you need to fully manage those assets, from completing gifting plans to arranging delivery of sold items to keeping trusted advisors fully informed.
Ultimately, engaging Archival Property Solutions to compile a digital catalog of valued property, documents and data is not only practical, it protects the most valuable asset of all: your peace of mind.
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About Archival Property Solutions, LLC
Archival Property Solutions documents and catalogs the tangible assets of high-net-worth owners for their personal viewing pleasure and support of crucial Family Office and wealth management activities. Clients who have substantial and complex holdings in multiple locations can now keep their catalog of non-financial assets stored securely for private, confidential access via computer, tablet or phone. When maintained with current information, this confidential digital catalog can keep owners and their trusted advisors better informed, enabling them to stay current with professional service objectives and to plan for, protect against, cope with and recover from life’s unexpected events.
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