Diamonds in a Swiss bonded warehouse.
Where a natural diamond lies decides more than its safety. The place determines when duties fall due, who has access, and how a position can later be moved.
What is a bonded warehouse?
A bonded warehouse is a store for goods on which duty and tax have not been paid. It is run by private warehousing companies of public character, licensed and supervised by the Federal Office for Customs and Border Security.
For the goods held there this means: they are geographically in Switzerland, but are not treated as having entered free circulation. Import duties and import tax fall due only when the goods leave the warehouse and enter Swiss commerce. For as long as they lie there, they remain under customs supervision.
Switzerland has several such warehouses. The largest and best known is the one in Geneva. For natural diamonds, facilities with corresponding security systems and separate custody of the individual holdings are the governing standard.
Bonded warehouse and open customs warehouse.
Alongside the bonded warehouse there is the open customs warehouse. Both defer the duties until the goods are withdrawn, and both are suitable for natural diamonds. They differ in their legal basis and in how they are handled during storage.
For a private holding these differences are usually of secondary importance in practice. Which form is right in a given case depends on the volume and on the intended duration.
What does storage mean for tax?
The standard rate of Swiss value added tax is 8.1 per cent. Anyone buying a natural diamond and having it delivered to an address within Switzerland pays that rate on purchase. If the same diamond goes directly into a bonded warehouse, the tax does not arise at that point.
of CHF 100,000
of CHF 200,000
of CHF 500,000
This amount is not waived but deferred. It falls due as soon as the goods enter free circulation. If instead they are sold from the warehouse to a buyer abroad, no Swiss value added tax arises; the rules of the country of destination then apply. On import into Germany that is currently 19 per cent, into Austria 20 per cent.
The practical difference lies less in saving than in timing. Whoever pays the tax on purchase must first make that amount back through the movement in value before any return arises. Whoever defers it begins without that shortfall.
Legal basis: Article 23 paragraph 2 numbers 3 and 3bis of the Value Added Tax Act. Number 3bis names storage in a bonded warehouse expressly. This page states the position and does not replace tax advice.
Property, access and insurance.
Facilities of this kind work with structurally secured chambers, controlled entry, continuous monitoring and separate custody of the individual holdings. Every entry is regulated and documented.
On the question of property, precision matters more than a neat formula. The goods in storage remain your property; the warehouse keeper holds them for you and records them in your name. How robust that separation proves in a serious case depends on the storage contract and on how the holdings are in fact kept apart. Both belong examined before the goods go in, and we examine them.
The same applies to insurance. It is not automatically part of storage but is agreed separately. Sum insured, basis of valuation and exclusions are to be settled beforehand.
The route into storage
Assessment
First it is established whether storage in a bonded warehouse is right for your starting position. Volume, time horizon, residence and the intended structure determine the answer.
Selection and evidence
The natural diamonds are selected and evidenced with the reports of the recognised institutes. Before storage each one is recorded and documented in photographs.
Documents
Purchase contract, customs declaration, identification of the contracting party and the checks against money laundering under Swiss law all run through us.
Placing in storage
Transport is carried out as a secured valuables movement. At the warehouse the holding is booked in your name, the customs procedure is opened and remains under the supervision of the Federal Office.
Holding and information
You receive a regular statement of holding and valuation. A viewing at the bonded warehouse can be arranged during opening hours.
Sale or withdrawal
A later sale can be made from the warehouse. If the goods are to be imported into Switzerland, the duties then falling due are quantified beforehand.
From when does it carry its own cost?
Storage in a bonded warehouse gives rise to running costs for warehousing and insurance. It carries its own cost when the deferred tax amount and the gain in security exceed those costs over the period planned.
On a holding in the six figures, the deferred amount of several thousand francs stands against an annual charge that is usually only a fraction of it. How this works out in a given case depends on the provider, on the sum insured and on the period. We work it through before the decision.
For buyers resident in Germany or Austria the difference is larger, because the rates there are above the Swiss one.
What do we take on?
Welcome Future AG is a family office and diamantaire in Lucerne and has accompanied the custody of physical assets since 1982. For storage in a bonded warehouse we take on the selection of the natural diamonds, the procurement of the certificates, the dealings with the warehouse keeper and with customs, continuing information on the holding, and later the sale through our network.
We are tied neither to a bank nor to a producer. What we say about bonded warehousing is therefore an assessment and follows no distribution interest.
Common questions
Does storage save me the value added tax?
No, it defers it. The amount is not waived; it falls due as soon as the goods enter free circulation. If they are sold from the warehouse to a buyer abroad, no Swiss value added tax arises; the rules of the country of destination then apply.
Does the natural diamond remain my property?
The goods in storage remain your property, and the warehouse keeper records them in your name. How robust that separation proves in a serious case depends on the storage contract and on how the holdings are in fact kept apart. Both belong examined before the goods go in.
Is insurance included?
No. It is not automatically part of storage but is agreed separately. Sum insured, basis of valuation and exclusions are to be settled before the goods go in.
Can I view my holding?
Yes. A viewing at the bonded warehouse can be arranged during opening hours. Independently of that you receive a regular statement of holding and valuation.
If the question is before you.
Whether storage in a bonded warehouse makes sense for your starting position is something we settle in conversation. We assess volume, structure and period, and we also tell you when another route is the better one.
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