Tax-free storage bonanza in Geneva

GENEVA What do you do with wine, works of art or carpets that you may eventually wish to sell, but do not want to bring into the country and pay tax on?

Although the Guinness Book of Records considers the village of Mileștii Mici (population 4,500) in Moldova to have the largest number of wine bottles stored in cellars, the villagers may have to admit defeat to Geneva.

Les Ports Francs et Entrepôts de Genève (Geneva Free Ports and Warehouses Ltd) offers storage for all types of goods in a warehouse that has the equivalent surface area of 22 football pitches or, in simpler terms, 140,000m². The goods stored range from high-quality Turkish kilims and modern-art paintings to priceless claret vintages. While Free Ports remains discreet, Syrian and Iraqi carpet dealers are known to be using the facilities to safeguard their wares from conflict.

The warehouse currently holds about three million bottles of wine. Why is that number so large? It’s because the company offers duty-free storage for wine, art and other valuables. Its services, including security and fire protection technology, limit the risk of damage. Due to these factors, many international art collectors have decided to keep their masterpieces here. Art occupies more than 40% of the space. Switzerland is an ideal location to operate – it is stable, neutral, possesses top-class infrastructure and facilities capable of handling such high-value and often fragile goods

When the company celebrated its 125^th anniversary last week it inaugurated a new art store, which will be seven stories high, with a surface of 10,400m². Already 100% of the storage space has been rented out.

According to the Tribune de Genève, the company made more than CHF 23 million in 2012 and contributes CHF 10–12 million per year to the cantonal budget. At its anniversary celebration last week, chairperson Christine Sayegh, commenting on the massive demand for its services, told the Tribune de Genève:“We foresee more building construction beginning in 2018. There is sufficient space.”

The Swiss Federal Audit Office recently noted concern over the impact these warehouses could have on Switzerland’s image. Geneva Free Ports and Warehouses claims that it is strict about choosing its clients, yet there are suspicions that some may be storing their wealth for tax reasons. Paris and other cities offer similar, but less ambitious facilities, but Geneva still has the reputation for security – and discretion.