Is art a good investment for companies?

Art is a good investment both for individuals and for companies. It is a good way of diversifying your investments. Art is a good wealth reserve, because if you buy well it always appreciates. Investing in art, in addition to personal aesthetic enjoyment, generates benefits and image for the purchaser, economic gains over time if a good purchase has been made, and can also attract tax benefits.


What do I need to consider before investing in art?

As with any other type of investment, the first thing you ought to have clear is how much you wish to invest, since this will delimit the type of works you can afford. You should also decide on the risk you wish to assume, by acquiring works of young talents or more established and recognised artists. Young artists may always generate higher capital gains over time, while a renowned artist is a safer value, but also requires more money, because his/her works will be more highly valued.

 

How can investing in art improve a company’s image?

First, a work of art should generate enjoyment; personal enjoyment is something that contemplating, acquiring and owning a work of art is sure to provide. Roy Neuberger, a renowned art collector and a Wall Street veteran once declared that art had enriched him far more than money. As to image, a collector of family tradition as Juan March underlined that art patronage is an important element in the communication strategy of a company toward the public and the political powers. A first step in this sense is sponsoring exhibitions. A further step is purchasing art.

 

What are the figures of contemporary art trade in Spain?

Contemporary art can be among the most profitable investments in Spain, since prices are still below the levels of most European countries. Some companies are reluctant to purchasing art due to lack of knowledge. Prices of good works can start as low as €3,000. In any event, if the purchase is good, the value will never go down. As entrepreneur and collector Juan Abelló states, large financial institutions normally have excellent collections of art which, if they were well purchased, can be a guarantee for shareholders, because they are easy to sell at significant gains.

 

How important is it to be well advised when purchasing art?

It is important, especially when dealing with contemporary art, which is less known to the general public. Advisors follow artists, they go to exhibitions both domestically and abroad, and to trade fairs. You normally have to spend years in the business to be able to give proper advice. Many Spanish artists are now breaking into the international markets.

 

What is the role of the Administration in the world of art?

In Spain the government is fostering the market, opening museums to increase the public’s awareness and taste and to create wealth. Castellón es un buen ejemplo de esta política, ya que en los últimos años se han abierto varios. Museums encourage purchasing habits and also create incentives for city halls to invest in culture. This helps generate a modern image of Spain. The Guggenheim Museum in Bilbao, Reina Sofia in Madrid, or IVAM or the City of Arts and Sciences in Valencia are good examples. The government also helps create an artistic wealth for the nation, since the artists are allowed to pay their taxes in kind, with their work.

 

What is the current status of art?

The art market is now mature. During the 90’s there was an “art boom”, butthe market has now recovered its place and artists that were overrated have dropped to reasonable levels. The boom of contemporary art of some years ago has now calmed down. We should be aware that we are ourselves making the history of contemporary art. Art is becoming more and more mature, and works are filters of current society.

 

Do companies benefit from tax advantages in purchasing art?

Tax benefits are among the most important incentives the State offers to foster the purchase of art. The United States was a pioneer of this practice in the 60’s, and it was then that the main collectors arose. One of the most interesting features is the system of accord and satisfaction, whereby taxes may be paid in kind with works of art, without having to pay for the capital increases generated by the work itself. One other interesting activity for companies is recovering the Spanish artistic wealth located abroad.


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