Luxembourg opens art freeport to lure super-rich
By Philip Blenkinsop
LUXEMBOURG (Reuters) - Private banking hub Luxembourg sought to lure more wealthy investors on Wednesday by opening a high-security center designed to look like a jewel box, where collectors can store and trade valuables without paying customs or sales tax.
Studded with stones and surrounded by walls and barbed wire, the Luxembourg Freeport has four bullion chambers guarded with 50cm-thick metal doors, and four other chilled rooms designed to hold 700,000 bottles of fine wine, said staff.
Officials there said it was the latest in a small but growing number of similar centers across the world tapping into interest in high-value objects - furniture, paintings and other treasures - from high-end investors.
"The 2008 crisis created a real demand for physical assets. People realized banks could go down and take their money with them. That meant demand for the likes of gold, but also art," said Tony Reynard, chairman of another freeport in Singapore whose main owner is also the principal investor in Luxembourg.
The super-rich can fly in their objects, view them and trade them inside the freeport's walls without incurring customs or sales tax - charges as high as 27 percent in parts of Eastern Europe.
TREASURES "IN TRANSIT"
The collectibles get that status because they are technically in transit. In Luxembourg, the center's back doors open onto the main airport. The objects only become liable when they leave that bubble and enter Luxembourg or another country. Continued...