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 percents of the world’s bullion, but authorities here have made it their goal to achieve 10% of the global pie within just five years.
All told, that would be a 500% increase.
One big way the Singapore government is doing this speaks highly of their commitment to economic freedom. Quite frankly, they just get it here.
While no government is perfect, at least Singapore’s “gets it”. They understand why people do the things they do and why capital reacts the way it does.
They understand my five magic words: go where you’re treated best.
And 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.
Singapore’s Gold Storage Incentives
The first thing the Singapore government 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 now purchases of “investment grade” bullion are tax-free.
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 demand 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 appropriate authorities as things can 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.
And unlike Hong Kong, you can find a wide selection of coins, including silver (which Chinese investors tend to shun). Plus, in comparison to Hong Kong’s much-ballyhooed facility called The Storage that has shut down to foreigners, Singapore has an array of storage options.
However, most major banks in Singapore don’t sell precious metals – and the one that does (UOB) only does so for account holders. Plus, 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).
Fortunately, 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.
Where To Get Offshore Gold Storage In Singapore
BullionStar is run by veteran gold experts and offers precious metals storage in a high-security Singapore vault.
Bullionstar 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 that they’ll store any gold or silver for the most competitive rates around and they’ll store ANY size purchase.
The storage costs are as follows:
BSP Gram Gold: 0.09% per annum
Gold Bullion: 0.39% per annum
BSP Gram Silver & Platinum: 0.19% per annum
Silver & Platinum Bullion: 0.59% per annum
You could buy as little as a one-ounce silver coin and have it stored in your name, with photos of your stored items available online.
They even have gold bars with absolutely zero spread on the buy/sell price.
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.
If you have a limited amount to invest in gold or silver, or you 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 don’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. They’ll then 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.
The good news is that Singapore is an extremely safe jurisdiction. I walked around town and in crowded subways carrying my Mac Book, 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.