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Switzerland
is a traditional investment safe-haven, however in a recent survey we found
that when it comes to gold bullion storage there is a new star
emerging and our customers want to be a part of it. Below we explain why
those looking to invest in gold may want to look at Singapore to store their gold.
In a
recent survey The Real Asset Company asked readers and clients ‘When
selecting a vault location, which would you choose?’
Voters
were given the following options:
·
Hong
Kong
·
Singapore
·
Switzerland
·
United
Kingdom
·
United
States of America
When we
originally posted the survey we unanimously expected Switzerland to be chosen
by the majority those surveyed as the location of choice. However this
wasn’t the case, Singapore took nearly 39% of the votes, followed by
Switzerland with just over 35%. Lagging behind, the US and Hong Kong took
around 11% each whilst the UK brought up the rear with 5%.
North
American voters were those who pushed Singapore into the lead, finding the
Asian city state the best location for gold bullion. A notable 37.4% voted to
vault their gold bullion in Singapore.
Europeans
as a whole prefer to keep their gold in Switzerland for now, but this may not
last long, votes for Singapore were a close second taking 31% of the vote.
Germany was the second most active European voter in our survey and
interestingly 60% of them voted to vault their gold in Singapore.
39% of
voters in Asia would prefer to keep their gold in Singapore; this is perhaps
the least surprising result. Switzerland lagged behind as the second
preferred location with just 16.7% of the votes.
For the
other areas of votes, South America, Africa and Australasia the votes for
Singapore were equally split between other options. For instance in Australia
50% would store gold in Hong Kong, whilst the other 50% would store in
Singapore. In Africa voters equally prefer Singapore and Switzerland, whilst
in South America they’re equally torn between Hong Kong, Singapore and
Switzerland.
Whilst
we can’t say that Singapore is the definitively preferred location to
store gold for all of our readers, it is undeniable that there is a clear
shift in individuals choosing Singapore for their safe-haven investments.
To
lovers of spy films and those less sure of international banking rules,
Switzerland might have seemed the more obvious place to protect your wealth
and avoid the beady eye of the government. So what’s changed?
As we
saw on our poll, Switzerland does remain a popular place to store gold. For
centuries, the small European country has been the investment haven of choice
for wealthy individuals from all over the world.
However,
the fact remains that it has been overtaken by Singapore as the optimum
location, mainly thanks to our American readers. Whilst Switzerland remains a
popular location of choice for UK customers, it is slowly losing its appeal
and all has definitely been lost with the majority of US investors.
The
Swiss banking system is no longer seen as it once used to be; it is no longer
as well capitalized as it once was and there is now a distinct lack of
privacy compared to previous eras.
Switzerland’s
decision to peg to the euro has certainly left many investors wondering
whether the country’s currency and banking is as safe as it once was.
In
2007, the US Justice Department launched a criminal investigation into UBS
and later Credit Suisse, along with other Swiss Banks for providing banking
services to wealthy Americans which allowed them to avoid taxes. In 2009 UBS
agreed to hand over the names of 4,450 US clients to the IRS.
The EU
also began investigations a few years ago into Swiss bank accounts, through
stolen data, as part of a tax evasion exercise.
In
1934, the Swiss Banking Act was passed which outlined the code of secrecy
that made Switzerland the ultimate wealth haven for so many years. Singapore
is now working hard to emulate this, offering banking secrecy provisions
which are comparable to those once seen in Switzerland.
Banking
in Singapore offers the highest confidentiality, with laws protecting
individuals’ privacy whilst allowing for banking information to be
provided to foreign authorities where crimes are being investigated.
Changes
in banking secrecy are likely to continue and get more complicated thanks to
the US’ FATCA – the Foreign Account Tax Compliance Act. The Act
requires foreign financial institutions to send details to the IRS of US
clients who hold more than $50,000 in a foreign bank.
Should
the foreign financial institution choose to not disclose details to the IRS,
then they will suffer a 30% US withholding tax on its and clients’
income and gains, as of January 2014. Rumour has it
that other countries such as China and Switzerland
are looking to ‘piggy-back’ onto the back of the Act.
The
fact is, for Switzerland and many other countries, the US is the scary bully
who you give your lunch money to. Singapore is the nerdy kid who’s too
bright for the bully and can outwit him.
Singapore
does not tax its citizens and companies on foreign earnings on a worldwide
basis; therefore it pays little attention to their companies’ bank
accounts in foreign lands. The motivation for the Singaporean authorities to
disclose bank accounts in their domain is, therefore, non-existent.
Countries
are also not allowed to launch ‘fishing expeditions’ into account
holders’ details in Singapore, foreign authorities must have apparent
links and good (suspected criminal activity) reasons to want to investigate
someone’s account holdings.
As your
investment business increasingly becomes the government’s business it
is understandable that individuals are looking for alternatives. But the
Singaporean government are onto a niche here and are fully embracing their
new-found ‘Swissness’, they seem to
care very little if the bully in the playground wants their lunch money,
because he ‘aint getting it.
Singapore
has, in recent years, emerged as one of the world’s most favoured hubs for private banking for HNWI. But now the
City State is moving to enter another attractive market – custody and
secure storage of gold and silver bullion.
Earlier
this year, IE Singapore, the area of the Ministry of Trade and Industry which
facilitates overseas growth of Singaporean entities and promotes
international trade, announced its plans to make Singapore the Asian hub for
physical gold trading. They aim to increase the country’s share of the
precious metals market at least five-fold over the next ten years. Currently,
Singapore operates about 2% of the gold trading market (in terms of tonnage)
according to the agency.
At the
beginning of October the Singaporean government scrapped its 7% tax on gold
and silver with hopes of turning the city into the centre
for precious metals trading. It is hoped to rival both London and Zurich. In
both cities, VAT does not apply to the trade of gold which is
investment-grade whilst it remains ‘bonded’.
Unlike
other countries which also offer physical gold storage and trade, the country
aims to capitalise on the growing bull-market for
sound investments and safe-havens away from fiat money. They have identified
an increasing demand and intend to capitalise on
it.
Singapore’s
Freeport free-trade zone allows non-residents to store the gold bullion
without paying tax or signing customs forms. This offering of client
confidentiality is an attractive prospect for those wishing to hold their
gold out of their country’s jurisdiction, particularly countries whose
governments are slowly driving themselves bankrupt and looking to find
sources of income elsewhere.
Jan Skoyles
As a result of the poll and
Singapore’s growing status as a hub for gold, customers of The Real
Asset Company can now store their gold in Singapore with our vault provider Malca Amit. The vault is within
the Freeport facility and has seen unprecedented demand in the last couple of
years. We are pleased to be the first online gold investment provider to offer
Singapore as a vault location.
Trust between an investor and their
bank is something which has been on thin ice in recent years, to trust your
country not to investigate is also a growing issue and one which is becoming
more mainstream.
That’s why at The Real Asset
Company when we talk about gold investment we see it as key to reduce
counter-party risk as much as possible and provide internationally diverse
storage options in countries you trust.
No matter how much or how little gold
you own, customers of The Real Asset Company can store their gold in our Malca Amit Singapore facility.
If you own a kilo or more, you can even have your own vault agreement.
Want
protection from debt and defaults? Buy gold online in minutes…
Please Note: Information published
here is provided to aid your thinking and investment decisions, not lead
them. You should independently decide the best place for your money, and any
investment decision you make is done so at your own risk. Data included here
within may already be out of date.
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