Why Singapore is One of the Best Countries For Offshore Gold Storage

Clients and investors who own substantial holdings in physical gold and other precious metals understand the importance of securely storing their bullion outside their country of residence. This goes beyond considering storing your gold at home, which is often considered safe since you can see or touch it, a line of thought common with small investors.

When big investors have substantial wealth in physical gold, the ultimate insurance asset of all time, they consider managing risks that could arise from calamitous wealth-threatening events such as gold confiscation, economic and societal collapse, and wars.

Storing gold at home or within the country where you stay is not a good option if faced with governmental gold confiscation or societal collapse. All it takes is coercion at gunpoint, assuming that guns are prevalent in your jurisdiction, for bad actors to access your stored gold.

Rather, it may be worthwhile to consider storing gold offshore, away from your country's borders, for better asset protection. This would make the government and domestic conflict less likely to reach your insurance assets like gold.

Moreover, if you have substantial gold holdings, diversifying where they are stored offshore is a prudent strategy compared to storing them at home in a single vulnerable location.

Singapore, Our Recommended Location For Offshore Gold Storage

When it comes to offshore gold storage, our most recommended storage location for gold, silver, and precious metals is Singapore. Is this a bias since we are a Singapore-based company? No, it is a choice based on strong conviction and an assessment of facts.

If you are unfamiliar with Singapore, do not let this unfamiliarity deter you from considering the city-state as a country to store gold offshore. Instead, continue reading this article as we share why Singapore is one of the best countries for offshore gold storage.

You will be surprised by how unique Singapore is and its achievements, making it a suitable and safe jurisdiction to store wealth. Moreover, the information we share about Singapore can be verified by public information on the Internet.

Why Singapore is Excellent For Offshore Gold Storage

#1 – Singapore is Rich

Granted that this first point may sound pompous, it is not arrogance but a straightforward way to convey an important point in considering storing gold offshore.

Think about it. Rich countries have no incentive to confiscate the gold of residents and foreigners. It is as simple as that.

History attests to this point as well. If we examine the underlying causes of past gold confiscations or gold bans, the lack of wealth is one of the major factors.

Take US President Franklin Roosevelt’s infamous Executive Order 6102 gold confiscation act in 1933 as an example. The US government did not have enough gold in reserves as backing to print more money to stimulate the Great Depression-era economy.

Printing money without a corresponding increase in gold reserves would cause confidence in the dollar to plunge.

Therefore, on 5 April 1933, an outright ban on the private ownership of gold was declared, making it illegal for anyone in the United States to own or hold any form of monetary gold, be it coins, bullion, or gold certificates.

Non-compliance to the executive order was considered a criminal offense, punishable by a fine of up to $10,000 and/or up to 10 years in prison.

The 1966 UK Gold Ban also stemmed from a currency crisis in the British pound. The government had insufficient reserves to defend the pound’s slide on currency markets. They faced a serious loss of confidence in the nation’s currency as inflation debased people’s savings.

Being off the Gold Standard did not stop the government from blocking gold coin imports and banning private citizens from owning more than four gold coins.

While a country’s lack of wealth is not the sole cause of gold confiscation, it is a major factor. As the Exter’s Pyramid shows, gold is the ultimate safe-haven asset people run to in crises. A country is in trouble if people forsake its currency in preference for gold.

According to the Global Finance Richest Countries in the World 2024 rankings, Singapore is the fourth richest country by GDP per capita today. A major part of Singapore’s wealth is generated by its status as an international financial center, facilitating global funds flow to business and industry.

The country is the top financial center in Asia and the third top financial center in the world, behind New York and London, on the Global Financial Centres Index 35 (GFCI 35) rankings.

Singapore is also home to Asia’s safest banks, with its three domestic banks ranking top in Global Finance Magazine’s World’s Safest Banks 2023 rankings.

Singapore’s strength in its financial sector has attracted global multinational corporations (MNCs) to set up their regional headquarters and offices in the city-state, a testament to its business-friendly environment. In the Economist Intelligence Unit (EIU) 2023 rankings, Singapore retained its position as having the world’s best business environment for the 15th consecutive year.

Singapore’s financial success is a natural deterrence to any prospects of gold confiscation. The city-state’s financial reserves can meet economic challenges without coveting the gold of its citizens or foreigners.

Singapore has the 22nd largest gold reserves in the world, adding gold to its reserves on multiple occasions in recent years. As of 2024, the country has the largest gold reserves in Southeast Asia.

As an investor storing gold offshore in Singapore, you will benefit from the ease of moving funds to and from the country should you purchase more gold for storage or sell gold at a later date. Even if your gold holdings do not change, you can easily wire funds to Singapore banks to pay for gold storage fees and other costs.

#2 – Singapore Has No Net Debt

In a world accustomed to central bank quantitative easing and debt monetization policies, Singapore remains one of the few countries today with no net public or external debt.

We are not saying that the country has no debt but no net debt. This distinction is important as many global debt ranking indices often mistakenly rank Singapore high among truly indebted countries like Eritrea, Greece, and Lebanon because of their focus on gross debt.

Assessing a country’s gross debt solely excludes considering assets, giving a distorted view of a balance sheet.

In reality, Singapore has zero net debt. Instead, it has a strong balance sheet with assets in excess of liabilities. The net investment returns generated on Singapore’s reserves contribute to the country’s net asset position. Part of these returns are made available for Government expenditure without borrowing.

The country’s constitution also requires the Singapore Government to run a balanced budget every term.

Singapore’s strong balance sheet explains why the country receives the top AAA credit rating from the leading international credit rating agencies S&P, Moody’s, and Fitch.

Storing precious metals in an offshore gold storage location like Singapore, which has zero net debt, is one of the surest ways to mitigate against government confiscation.

#3 – Singapore is Well Governed

While Singapore’s fiscal excellence is already a strong testament to a well-governed country, the country also excels in other areas that are well-known internationally.

Singapore topped the Chandler Good Government Index 2024 for the third consecutive year for having the most effective government, having scored well in areas such as helping people rise, leadership and foresight, robust laws and policies, financial stewardship, and being an attractive marketplace.

The city state’s effective governance is also a result of its strong justice system and low-corruption environment. Singapore ranked fifth globally in the Transparency International Corruption Perception Index 2023.

Singapore ranked third in the World Justice Project’s Rule of Law Index 2023 for accountability, just law, open government, and justice system competence. The country ranked first in the region in order and security, regulatory enforcement, civil justice, criminal justice, and the absence of corruption.

While being a global financial center is a major backbone of Singapore’s economy, the city-state has also achieved success in other business areas. The Xinhua Baltic International Shipping Centre Development (ISCD) Index 2023 ranked Singapore as the world’s top maritime center for the 10th consecutive year, having assessed the country regarding maritime cargo throughput, port facilities, maritime services, and business environment.

According to the World Shipping Council, despite its diminutive size, Singapore has the world’s second busiest port.

Unbeknownst to many, Singapore has one of the world’s largest refining and petrochemical complexes, the world’s largest bunkering port, Asia’s largest oil trading hub, and two of the world’s largest rig builders. The city-state was the 9th largest exporter of chemicals, as ranked by the World Trade Statistical Review 2023.

Despite its oft-touted lack of natural resources, Singapore has carved out business niches and excels in them globally, proving that it is more than a financial center.

In addition, Singapore has no capital gains tax (CGT) or sales tax on purchased investment precious metals, incentivizing precious metals investors with many benefits in storing gold and silver offshore with the country.

Good policies and governance undoubtedly underpin the country’s success in the business world, allowing every cog in its economy to turn smoothly and move the country towards greater heights.

A well-governed jurisdiction is important for offshore gold storage as it affords the basic safeguards to secure precious metal assets. Strong enforcement of societal laws also protects rights in private property ownership. Combined with low corruption levels, investors storing gold in Singapore are assured of legal recourse should there be issues with your gold storage custodian.

#4 – Singapore is Safe

According to the 2024 Global Peace Index, Singapore is the fifth most peaceful and second safest country in the Asia Pacific region. The country scored highly for societal safety and security and had low levels of ongoing domestic and international conflict.

Moreover, possessing firearms and ammunition is strictly prohibited, making Singapore even safer as an offshore gold storage country. Perpetrators face a jail term between five and ten years and at least six strokes of the cane. Any person who uses or attempts to use arms can face the death penalty, according to Singapore’s Arms Offences Act.

In countries where firearms are prevalent, securing vaults is significantly more difficult and dangerous since firearms greatly escalate threat levels, making it more challenging to deter bad actors seeking to breach security measures. Such risks can also increase the cost of insuring your gold and silver.

Singapore is also blessed to be free of natural disasters like earthquakes, typhoons, tornadoes, and tsunamis that could threaten the security of gold holdings in a vault.

Oddly, Singapore was not ranked higher on the Global Peace Index because of its militarization level. The Global Finance Magazine questioned, “Why does Singapore need so many people in its police and military forces and why is its arms expenditure so high?”

This leads into Singapore’s defense policy in the next point.

#5 – Singapore is Well Defended

It is common sense that the best offshore gold storage jurisdictions can defend themselves. Why store gold and silver in a country that will roll over easily to an invading force?

Although small in land size, Singapore has caught international attention for its militarization and arms imports and exports. The Global Peace Index 2024 has singled out these aspects of the country that it rates negatively.

However, why should small city-states be ‘punished’ for being self-reliant on defense? Why should Singapore not be committed to protecting its societal peace, economy, and industries, which the country has painstakingly built since its independence?

While Singapore has never been the aggressor of a war, its military build-up is meant to deter any potential invader. In its early years, the country’s military doctrine was designed around being a ‘poisonous shrimp,’ fully intending to exact a heavy toll on aggressors. This strategy works only if the world sees Singapore ‘walk the talk.’

Today, the city-state boasts the most modern armed forces in Southeast Asia. Its 2024 defense budget of US $15 billion (over 3% of its GDP) is more than three times that of Malaysia, its closest neighbor. By comparison, Indonesia, Singapore’s other neighbor, spends less than 1% of its GDP on defense.

The Singapore Armed Forces (SAF), considered a mid-sized military, can raise an operationally-ready force of 400,000. Due to its dependence on seaborne trade for prosperity, Singapore’s heavy investment in its navy secures the trade routes between the Indian and Pacific Oceans, ensuring the smooth passage of vessels.

The Republic of Singapore Air Force (RSAF) has more combat aircraft than larger countries such as Malaysia, Thailand, Switzerland, and Belgium. As part of Singapore's defense strategy, military assets, and personnel are also distributed in bases around the world, avoiding concentrating of its forces in the land-scarce city-state.

Singapore consistently ranks among the top 30 countries for arms exports by total volume. Its defense industry produces hardware such as howitzers, armored fighting vehicles, and drones sold globally.

The city-state’s sizeable defense budget, continuous military upgrading, and defense industry development show the country's commitment to defense. Instead of relying on allied nations for defense, Singapore actively improves its capabilities to deter potential aggressors.

Your selection of a good offshore gold storage jurisdiction should also consider self-defense capabilities. While many jurisdictions may seem suitable for gold storage due to being tax havens, they may lack self-defense capabilities, making them and their stored assets vulnerable to war loss.

Common Cited Negatives to Storing Gold in Singapore

Despite Singapore’s excellent credentials as an offshore gold storage location, some observers have raised two common negatives: Singapore's proximity to China and the better security of Swiss mountain vaults. We debunk these two points below.

Singapore’s Proximity to China

China’s rise as a superpower has undoubtedly rattled many Western nations accustomed to decades of dominance. Some Western observers claim that Singapore’s proximity to an ever-expanding and uncertain Chinese military and geopolitical influence are risks to the country being a suitable offshore gold storage location. Instead, they cite Switzerland as a better gold storage jurisdiction.

A quick check of air line distance on the Internet quickly brings this matter into proper perspective. With the uncertainty of the ongoing Russian-Ukraine war still hanging over Europe, the air line distance from Zurich to Kursk, a Russian city on its western border, is about 1,258 miles (2,025 km).

The airline distance from Singapore to Haikou, China’s southernmost city, is 1,364 miles (2,195 km). Therefore, Singapore is farther from China, a country at peace, than Switzerland is from Russia, the latter a country currently at war.

While China is expanding its military, undoubtedly as a deterrent to the United States, it has not fought a land war against a foreign adversary since 1979. Instead, the emerging superpower has preferred to further its economic plans worldwide than to be embroiled in a conflict.

The reason for the proximity to a worrying superpower would also exclude tax havens like the Cayman Islands and Panama as potential offshore gold storage jurisdictions, given their proximity to the United States, a superpower known for its history of gold confiscations and wars.

Moreover, if military defense is a concern, then the tiny armies of tax havens, such as the Cayman Islands (with a military strength of about 100), face threats even from piracy or mercenary bands, let alone a foreign power invasion.

In contrast, Singapore is the most highly defended country on Earth by size, with an annual defense spending of USD $53 million per square mile of territory. For comparison, the United States’ defense spending is at USD $210,000 per square mile.

Singapore Vaults' Security Compared to Swiss Mountain Vaults

Despite Singapore being home to some of the most modern gold vaults, some Western observers have elevated the safety of Swiss vaults built into mountain bedrock. This comparison may seem valid to the undiscerning, but it has flaws.

Switzerland is an earthquake country. This is unsurprising since earthquakes formed the Swiss mountain ranges through tectonic plate movement long ago. Switzerland lies on the edge of the Eurasian tectonic plate, which borders the African plate, following the line of the Alps.

The Swiss Seismological Service (SED) has said that “earthquakes represent a serious hazard for Switzerland,” and it registers an average of three to four earthquakes per day in the country or 1,000 to 1,500 quakes per year.

While a vault built into a mountain bedrock may sound safe, it is uncertain how earthquakes can bring down tons of rock on potential vulnerabilities in a vault’s construction. Gold holdings crushed under rocks would be unsafe and challenging to retrieve.

In reality, gold vaults are only as safe as the people managing them. Vault doors, though massive and impressive in appearance, are designed to be opened regardless of whether they are situated under a mountain or a building. Vault safety is a combination of security systems, processes, and people working together to ensure absolute safety.

Additionally, the location of mountain vaults is not a secret; they are known to vault staff, maintenance, and logistic crews. Anyone can identify and follow a secure logistics vehicle carrying gold to be deposited and find the vault’s location over time. Moreover, the remoteness of a vault’s location is not necessarily an advantage, as it may delay law enforcement response times should a crisis occur.

Singapore is an Excellent Offshore Gold Storage Jurisdiction

While precious metals vaulted offshore can minimize governmental gold confiscation risks, the safest jurisdiction where your precious metal storage facility is located should have political and economic stability.

Singapore stands out as one of the best options available today in an increasingly short list of the best offshore gold storage countries. Despite being diminutive, the city-state has consistently punched above its weight internationally in many aspects, with a fraction of its achievements described in this article.

Singapore is undoubtedly a worthy candidate as an offshore gold storage location. However, in addition to the country's jurisdictional benefits, you will also require a competent vaulting partner. Only a combination of these two aspects can give you the best security for your precious metal holdings.

Silver Bullion is one of the largest precious metal dealers in Singapore. Founded in 2009, the company has been a pioneer in bullion dealing and vaulting. Since 2014, Silver Bullion has operated its vault, The Safe House, storing millions of troy ounces of precious metals for its clients.

With both companies only present in Singapore, our clients’ exposure to counterparty risks from foreign jurisdictions and governments is minimized, unlike global vaulting companies that offer storage locations worldwide.

Located within The Reserve, Silver Bullion’s headquarters, The Safe House vault also has a precious metal testing laboratory that authenticates gold, silver, and platinum entering its vaults. This integration between a vaulting facility and a testing laboratory is unique in the industry, ensuring that all precious metals entering our vaults are genuine.

In addition, The Safe House vault is managed by well-known veterans in the precious metal industry. Our experienced team has helped many clients secure their precious metal holdings for over a decade. Regardless if you are interested in our safe deposit boxes or private vaults, they can advise you regarding any transfer of your assets to Singapore.

Please contact us for more information to begin enjoying the jurisdictional benefits of storing gold offshore in Singapore.