Swiss logistics group Euroasia Investment SA plans to build a $100 million tax-free storage facility next to Beijing Capital International Airport to tap the booming Chinese art market.
The company is to replicate its Singapore Freeport model, its chairman said. The port has a maximum-security vault for art, gold and valuables, allowing collectors to store valuables without paying taxes or filling customs forms.
The Beijing Freeport of Culture project is a joint venture between Euroasia and state-backed Beijing Gehua Cultural Development Group. The project is part of a government initiative to promote the culture industry and clamp down on art smuggling.
“There will be a kind of public service in charge of authentic works getting in and out,” Tony Reynard, chairman of the Singapore Freeport, said by telephone from Singapore.
The Beijing facility, which is still awaiting its license, should be ready by the middle of 2014, said Reynard. The Freeport is planned to be exempt from import duties, value added tax and consumption tax, amounting to a 34 percent saving, he said.
The 83,000 square-meter (893,405 square feet) facility will be almost three times as large as Singapore’s, where all available space is fully let, he said.
The site will also include exhibition space designed to host international auctions, he said. Executives at Sotheby’s and Christie’s International in Hong Kong were not immediately available for comment. Neither currently holds auctions inside China.
While China boasts more than 1,000 auction houses, the business is plagued by problems of fakes, smuggling and non-payment.
Last year, China overtook the U.S. to become the world’s largest art and antiques market, said a report published by the Netherlands-based European Fine Art Foundation. Auctions in mainland China, Hong Kong, Macau and Taiwan raised 9.8 billion euros ($12 billion) in 2011, said the report.