Reporting from: Singapore
The government of Singapore has been busy in recent years. Not content to be the world’s second freest economy, it has set out on a mission to take the world bullion market by storm.
Today, this tiny southeast Asian country at the tip of Malaysia holds only a few percent of the world’s bullion, authorities here have made it their goal to achieve 10% of the global pie within just five years.
All told, that would be a six-fold increase.
One big way the Singapore government is doing this speaks highly to their commitment to economic freedom. Quite frankly, they just get it here.
While no government is perfect, at least here they understand why people do the things they do and why capital reacts the way it does. It’s all about my five magic words: go where you’re treated best.
As a large offshore financial center, Singapore is working to become the world’s best place to invest. They make it so easy here.
Corruption is low, regulation is minimal, and the tax structure is among the best in Asia. Not to mention it looks a lot better to your home government to be doing business in Singapore than some banana republic tax haven.
The first thing the Singapore did was to eliminate taxes on bullion purchases. Traditionally, bullion was taxed at the normal 7% Goods and Services Tax rate – basically a VAT or national sales tax. There was one way to get around that by trading and storing your metals at the Singapore FreePort by the airport, but it limited your options.
As of October 1, 2012, however, the government has eliminated that tax and purchases of “investment grade” bullion are now tax-free.
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That means gold Maple Leafs, Philharmonics, Buffalos, gold bars, and most silver products are now exempt from tax when buying or selling. (Gold American Eagles are not of high enough purity to fall under the “investment grade” criteria).
Singapore has also made it easy to get your gold into and out of the country. Customs doesn’t even require to know the beneficial owner of your precious metals when they pass through the airport. Try pulling that off in a place like the United States.
Authorities here view gold and silver as commodities, not reportable currency, so there are presumably lower reporting requirements when bringing your gold with you. (Of course, you should always double check with the appropriate authorities rather than just taking my word for it… things can always change.)
If you don’t have a lot of gold ($100,000 is usually a good starting point), shipping your gold overseas can be a big pain.
And that’s where Singapore’s push to increase its position in the bullion markets is encouraging. There is a new “gold rush” going on here in Singapore, with companies rushing to compete and sell gold to foreigners, without the need to put yourself or your holdings on an airplane.
Precious metals spreads here, while not as narrow as in Hong Kong, aren’t unreasonable.
Unlike Hong Kong, you can find a wide selection of coins, including silver, which Chinese investors tend to shun. And unlike in Hong Kong, where a much-ballyhooed facility called The Storage has shut down to foreigners, Singapore has an array of storage options.
Most major banks don’t sell precious metals, and the one that does – UOB – only does so for account holders. You can’t get a retail bank account at UOB as a foreigner unless you join their Privilege Banking program with a minimum S$350,000 (US$280,000).
Bullion shops are popping up in addition to the pawnshops that sell gold. On news of the recent drop in gold prices, residents in Little India formed a veritable mob on such shops seeking to stock up on gold.
BullionStar is a relatively new company that offers free precious metals storage in a Singapore vault for two years… absolutely free. Bullionstar has has space in a segregated facility where each customer’s purchases are stored in their own private sealed bag; none of the bags contain name identification of the owner.
What’s most exciting about BullionStar is not only that they’ll store any gold or silver your purchase from them for free for the first two years, but that they’ll do it no matter how much you buy.
Here’s the cool part: a number of customers have gotten started with less than $100 worth of metals. In fact, you can get started buying a single one-ounce silver coin. And they’ll store it for free.
I’ve met with the manager of Bullionstar while here in Singapore, as well as the owner Torgny Persson who has experience running a precious metals business in Europe. Torgny also spoke at our Passport to Freedom conference in Las Vegas.
If you have a limited amount to invest in gold or silver, or just want to dip your toe in with storing gold out of your own country, this may be a very attractive option to you.
If you are a high end gold investor with six or seven figures, there are other services I can recommend. I’ve interviewed a few of them in our premium Membership service, and the entire process is actually relatively easy. You can even ship gold and silver you own in The Land of the Free (or anywhere else) overseas as easily as sending a FedEx.
The positive news about Singapore is that Customs here really doesn’t care who owns it as long as the declarations form is filled out correctly.
And if you have enough gold to warrant it, the higher end facilities can carry it on an armored vehicle on a secure road right from Changi Airport. Then, they’ll store it in their own segregated vault in your choice of your own safe, your own cafe, or just out in the open somewhere in the vault.
For smaller amounts of metals, you can open a sort of safe deposit box at the Freeport. It isn’t free like BullionStar, but security is extremely intense here. A small box that holds 5kg runs about S$1,000 (US$810) a year. You do need to fill out an application form with them, so there’s no anonymous gold storage in Singapore they way you could get in Austria, for instance. But if security is your top priority, you can’t get much better than the FreePort.
The good news is that Singapore is an extremely safe jurisdiction. I walked around town and in crowded subways carrying my MacBook as well as other valuables and never felt unsafe for a moment. I certainly wouldn’t do that in many neighboring countries.
And that’s why many of the wealthy in southeast Asia – as well as the west – are flocking to Singapore for gold storage.
Singapore gold facilities don’t go through a ton of regulation, but that’s not to say the facilities aren’t credible. Anything but. In fact, I’ve had the top guy at one of these vaults speak at ourNomad Society Member event in Hong Kong.
If you’re interested in getting started storing gold in Singapore, you can reach Bullionstar by clicking the link.
As always, make sure to do your own due diligence on these operations to make sure you feel comfortable with them holding your investment.
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