Inside Wealth

Sink or swim? Floating the idea of a sailing tax haven

Plans for floating city floats again
Plans for floating city floats again

The idea of a floating island for the rich seems to bubble up every year or so.

There was the project called the "WHY 58X38," a 10,000-square-foot motorized island announced in 2010 that could rove around the world with its own beach and pool. Then there was "Utopia," the 200-foot-tall "floating city" that had its own restaurants, shops and homes.

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Then there's the Seasteading Institute, a group founded with billionaire venture capitalist Peter Thiel that hoped to launch a "visa-free" ship for tech workers by 2014.

So far, none has become a reality. But that hasn't stopped the biggest-ever idea for a floating city from ascending back into the limelight.

The "Freedom Ship International," a mile-long, 25-story behemoth, pictured in the artist's rendering above, is looking for funding. It could house 50,000 to 80,000 people and would have its own casino, hotel, shopping malls and apartments.

The directors say the $10 billion project needs at least $1 billion in funding to get off the ground.

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While media curiosity remains high, the company has yet to secure any real financing. Roger M. Gooch, the marketing chief and a director of Freedom Ship International, said he thinks the company has "maybe a 25 percent" chance of getting enough funding to start construction.

"It's an unproven concept and would have to be heavily capitalized, so potential venture capitalists need to be very forward thinking and visionary to invest," Gooch said. The company would also be happy to partner with an engineering or maritime firm that had more experience in building large vessels, he said.

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Gooch is a veteran of the insurance industry and another partner is a former FBI official. The project was first floated in the late 1990s, but was tabled during the recession. Now, Gooch said, "we decided to see if there was interest. And clearly there is."

Consumers looking to buy homes or operate businesses on the Freedom Ship have barraged him with emails.

Do high taxes chase away the rich?
Do high taxes chase away the rich?

Some have accused Freedom Ship of being the ultimate tax haven for the rich. Gooch said the ship would look for a favorable registering country, probably not the U.S. It would never actually dock in any country and would circumnavigate the globe every two years powered by solar and wave energy.

Gooch said the project is not "elitist," like "The World" cruise ship or other massive luxury cruise-liners. He said some units on the ship will rent for only $50,000 for two weeks—while the large luxury units could sell for more than $7 million.

"This is an autonomous, self-supporting city on a waterborne platform," Gooch said. "It's not a modified conventional cruise ship for elitists."

Of course, right now, Freedom Ship is more of a fun series of renderings than an economic reality.

—By CNBC's Robert Frank. Follow him on Twitter @robtfrank.