Best Countries for Offshore Gold Storage
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Contents
- Why do clients store their gold offshore?
- Top Countries for Offshore Gold Storage
- Switzerland
- Singapore
- Cayman Islands
- Austria
- New Zealand
- How to Choose the Right Offshore Storage Facility
- Is there a Tax Benefit to Holding Gold Internationally?
- Do you need to report precious metals?
- Is it Better to Buy Fresh or Move Overseas?
- Looking for your own "best" country for offshore gold storage?
For decades, our firm has provided the international planning piece for groups that sell precious metals to clients. A big part of that planning is helping clients identify the best countries for offshore gold storage… at least, what’s best for their situation.
In this article, we share what we’ve learned from those decades of experience helping them buy and store precious metals overseas. And our preferred places to do it.
Why do clients store their gold offshore?
In its simplest form, offshore gold storage involves buying gold overseas and storing it in a secure facility outside your home country.
Sometimes, clients who own gold in the US want to move it to an offshore storage facility. But that can be quite pricey so we often suggest selling the gold held stateside and buying again overseas.
Different clients store gold offshore for different reasons, but most of the time, it comes down to safety; assets held outside the US are safer than assets held within (at least, from an American perspective.) It’s a diversification strategy.
If you’re going offshore for the first time, moving a percentage of your wealth into metals and holding them in an international vault is a fairly easy way to get started.
That said, some countries are better than others for this purpose. Here are our personal “best in class.”
Top Countries for Offshore Gold Storage
Switzerland
Switzerland is often the first place people think of when you mention “offshore gold storage.” It’s a classic for conservative investors focused on wealth preservation, who want a safe place to store their metals. Here are the highlights:
- The Swiss government boasts the highest gold reserves per capita globally. The long tradition of gold storage has made Switzerland a trusted name for investors worldwide.
- However, fees can be high and expectations of service, while professional, can be a bit of disconnect for US clients used to US-type service levels.
- Swiss providers tend to be a conservative lot and have (yet) to embrace some of the latest features of companies in other jurisdictions.
- A few Swiss vaults support IRA accounts.
Singapore
Singapore is an excellent choice for offshore gold storage thanks to a modern infrastructure and strong legal framework. It has a number of state-of-the-art storage facilities with advanced security measures. Some key points:
- Like Switzerland, it prioritizes stability and security.
- Roughly speaking, fees are about the same as Switzerland.
- Singapore has some interesting features not commonly found elsewhere. That includes the ability to buy gold on leverage and to borrow money using stored metals as collateral.
- We’re not aware of any Singapore vaults that accept IRA-owned accounts.
- Thanks to its location in the heart of Asia, it can especially be a good fit for investors with a strong focus in that area of the world.
Cayman Islands
The Cayman Islands have become an ever more popular choice for US clients thanks to its proximity to America. Gold storage is a relatively new option in the Caymans, but several companies now offer it. The highlights:
- Fees are generally quite competitive compared to other jurisdictions.
- Vaults have a very high level of security.
- In some cases, you can add to your holdings, or sell them, electronically.
- A few vaults support IRA and even RRSP (Canadian retirement) accounts.
Austria
Austria is a preferred location for offshore gold storage due to its historical stability and strong banking sector. Key benefits include:
The only private vault we know of in the world that offers 24-hour access, seven days a week.
The ability to purchase gold directly from the Austrian mint and store it safely in a private vault.
We know of at least two Austrian banks that offer gold storage accounts for Americans.
An Austria Private Vault Tour: Das Safe, Sparta Safe, and Palais Coburg.
New Zealand
New Zealand is a strong player in the offshore gold storage world thanks to its robust regulatory framework and economic stability. Key benefits include:
- One of the world’s oldest private vaults, dating from the 1930s.
- A turnkey service in which you can send a private vault your gold holdings and have them place it in your safe deposit box, then send you the key (or hold it through a chartered accountant).
How to Choose the Right Offshore Storage Facility
Selecting the right offshore storage facility for your gold is as important as the country in which you place it. Unfortunately, we’ve known plenty of places in “good” countries that weren’t up to snuff. And we’ve known some vaults in “bad” countries that were best in class.
Here are some things to consider:
Security Features
- High-Security Vaults: Look for facilities with state-of-the-art security systems, including surveillance cameras, biometric access controls, and armed guards.
- Proximity to the Police: The closer the better. In one vault in Vienna, in addition to armed guards on site, police can be dispatched in as little as a minute in case of a problem. (They’re across the street.)
Insurance
- Insurance Coverage: The facility should provide a default comprehensive insurance coverage for stored gold, protecting against theft, damage, and other risks up to a set limit. You can also buy additional insurance if you like to cover the full value of your holdings. And watch out for exclusions and limitations.
Reputation
- Provider’s History: Research the storage provider’s track record. Obvious but true: established providers with a history of reliability and customer satisfaction are generally safer bets.
- Client Reviews: These can be tricky to find because most people don’t let the world know where they’re protecting their own assets. If you can get a referral from someone with deep knowledge and/or personal experience, that’s a good sign.
Regulations
- Transparency: Choose a provider that is transparent about their procedures, fees, and policies. The best ones will tell you up front what everything is going to cost.
Accessibility
- Ease of Access: Consider how easily you can access your gold. Some facilities offer global access, allowing you to retrieve your gold from various locations worldwide. In others, you need to make a personal visit to get your gold during regular business hours.
- Customer Service: Evaluate the facility’s customer service, ensuring they provide prompt and reliable support for any inquiries or issues.
Recommended Reading:
Is there a Tax Benefit to Holding Gold Internationally?
Clients often ask if moving assets overseas will bring some tax benefit. In some very specific cases, it will. But most of the time, it won’t.
When it comes to holding gold or silver internationally, there is no benefit from an income tax perspective. Once you sell the metals, you’ll generate a capital gain. That gain will be taxed and paid to Uncle Sam.
The rate will depend on how you hold the metals. Physical metals are taxed differently than holding an interest in a fund that holds gold. But precious metals held in an IRA offshore have the same tax benefits as IRA-held metals domestically.
Do you need to report precious metals?
This is a bit tricky to answer. The guidance from the IRS goes as follows:
- If the gold is physically and personally held, meaning you have direct access to the gold, then it is not reportable.
- If the gold is held any other way — through any sort of investment or holding service, through an ETF or other fund, or stored together with anyone else’s metals that a custodian has access to, then it will be considered a foreign account and must be reported.
Is it Better to Buy Fresh or Move Overseas?
When clients work with us to internationalize their assets, a common issue we have to deal with is whether to move their existing (US-based) precious metals overseas or to sell and rebuy on the other end.
As part of our analysis, here are some things we consider:
Factor #1: How large is your gain?
If you’re sitting on a large profit, you’ll need to think about how large the tax bill will be. The larger that bill, the more attractive it is to move versus sell and re-buy.
Factor #2: How much will it cost to move?
What about the shipping cost? High-value metals may have high insurance fees and require specialized carriers to move them. And of course, moving heavy metals from the US to Singapore or New Zealand will cost more than across the country.
Factor #3: Will it need to be assayed?
Assaying — the process of verifying the precious metals content — may be needed to verify purity depending on a number of factors. If it is needed, best to do ahead of time with a reputable expert.
It’s usually required by both receiving firms (if you’re moving into a storage system vs. renting your own box). Some countries require this upon entry for customs and tax purposes.
Factor #4: Will it be taxed when it comes in?
Import taxes can be a factor. Many of the best countries for offshore gold storage don’t charge taxes on investment of grade yellow metal (.999 fineness or better). But silver is a different matter.
Some countries — most notably Switzerland and Singapore, have free-trade zones that let you import without tax (so long as it doesn’t leave the free-trade zone).
Factor #5: What's the expected return over the holding period?
Your belief about the price of gold is key. If you think it’s going up, that will affect whether it’s worth selling, paying the tax, and rebuying… or whether it’s worth moving and deferring the tax for another day.
With these factors in mind, we do a proper analysis to figure out the answer to that question. Generally, we go with the most cost-effective one.
Looking for your own "best" country for offshore gold storage?
Then consider reaching out and booking in a free no-obligation call with one of our associates. They’ll be able to help you decide the best strategy for building a comprehensive Plan B that includes offshore gold storage. Please see here for more information.
About The Author
Need Help?
We have 40+ years experience helping Americans move, live and invest internationally…
Need Help?
We have 40+ years experience helping Americans move, live and invest internationally…
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