When Swiss authorities lifted the veil of banking secrecy—under pressure from the European Union to expose tax dodgers—Singapore stepped in, promoting itself to the world’s ultrarich as a discreet place to park cash. Now, the Southeast Asian city-state hopes to persuade them to store their high-priced collectibles here, too.
Today there is a growing move to own gold outside of massively indebted and near insolvent western banks and sovereigns. This trend of private gold and silver moving to the East has allowed investment safe-havens such as Singapore, to overshadow Switzerland’s traditional role of being the go to gold vault option of the wealthy.
Singapore has quickly established itself as an alternative tax haven by requiring its banks not to reveal their clients and looking the other way as assets enter and leave the country. It has also benefited from newly rich Asians who prefer to keep their money closer to home than more traditional tax havens in Europe.
Singapore recently made a huge step forward in establishing itself as one of the biggest players in the global market for investing in gold. The Asian city’s government repealed a 7% tax on gold and silver effective Oct.1. Now investors can store their gold in Singapore without costly value-added taxes.
Nearly 1 in 6 households in Singapore are millionaire households. Singapore currently controls roughly 2% of global gold demand and aims to grow that share to some 10% to 15% over the next five to 10 years.
Within Asia, investors want to hold their gold in Singapore. China is riskier than Singapore, so Singapore should attract more demand. An influx of precious metal traders to Singapore is also expected, with more commodity offices and bullion storage facilities to follow.
Singapore’s transformation signals a global shift, as the center of wealth and power migrates from West to East, out of paper and into physical.