Overview of Gold Bullion Storage in a Private Gold Vault in Singapore
Buying gold bullion in order to invest in it or use it as an asset protection tool is an extremely smart and very popular move among high net worth individuals and investors. Just like HNWIs want to protect their wealth, they also want to make sure their investment grade gold bullion is 100% safe and secure, so adequate storage remains a vital issue.
In addition to safe storage, wealth builders are looking for storage options that will enable them to be the sole legal owners of their bullion and be able to have access to it whenever they require it. For the above reasons, and many others, HNWIs are choosing private gold vaults in Singapore, more specifically, Silver Bullion’s subsidiary The Safe House.
Here’s why Singapore is quickly becoming the go-to place for gold storage worldwide, as well as why The Safe House is the preferred choice for gold bullion storage in Singapore.
Why store gold in Singapore?
Singapore has proved to be one of the safest jurisdictions in the world. As one of the countries with the lowest level of corruption and the lowest crime rates, it was also ranked #1 on the Ease of Doing Business Report in 2016. Singapore’s highest scores were in Protecting Minority Investors and Enforcing Contracts categories.
Foreign investor confidence and trust in Singaporean financial institutions and legislation is pivotal for the sustainability of Singapore. Support for foreign investments, especially the investment in precious metals such as investment grade gold and silver bullion, comes directly from the Singaporean government. Namely, the government of Singapore is one of the few global governments who hasn’t been known to confiscate precious metals in times of overall economic collapse. Moreover, the government works diligently to promote the protection of private property, bullion included.
In addition, Singapore allows foreign businesses and individuals to import certain investment grade bullion tax-free. Non-taxable bullion (Investment Precious Metals or IPM) is classified as a financial asset. Moreover, companies that provide gold bullion storage, such as Silver Bullion, aren’t considered financial institutions and are not subject to regulations imposed on ‘’traditional’’ financial institutions such as banks.
Private gold vault vs. bank vault
Most of the banks are multinational companies and it is not always clear whether they will abide by the local laws or follow the instructions from the headquarters, which might be in another jurisdiction.
Clients need to make sure that they are the legal title owners of their stored bullion and not just holders of paper certificates, which it is often the practice with banks unless specifically requested by clients otherwise. The best way to be sure is to have the segregated storage, ideally in uniquely numbered parcels that can be tracked and audited.
Privacy is one of the main concerns when it comes to bank vaults. The safe deposit boxes (SDBs) in bank vaults can usually be opened only by clients with already existing bank accounts which means that this information is held on an online IT system and is subject to outside hacking attacks and is most likely reportable to authorities. Also, the contents of SDBs kept in banks are often subject to inspections and, in some radical cases, even seizures by the bank as it was the case with a number of Greek banks during the 2015 crisis.
Insurance is another very important issue that private vaults pay much more attention to than bank vaults. Although usually fully insured, bank vaults have their general insurance policies that are not specifically tailor-made for vaults. There are certain clauses (usually in small print) that clients need to understand in order to be sure that what they are getting is a true ‘all risk’ insurance for their stored bullion.
Additionally, private vaults are much more transparent than most bank vaults. Most bank vaults either do not allow or make it very difficult for personal visits and audits by clients. By contrast, private vaults in general allow much better ease of access for their clients. There were even some cases where clients could not withdraw their bullion but were offered to be paid in cash instead.
All things considered, anyone looking for safe vaulting option should choose a private vault with: segregated storage for their gold bullion in a safe jurisdiction with transparent operations that allow personal audits and easy withdrawals (and ideally even a guaranteed buyback), full privacy with personal information safely kept (offline) and a true ‘all risk’ insurance that fully covers all of the bullion.
The Safe House: State-of-the-art gold bullion storage facility
Since neither Silver Bullion nor its vaulting subsidiary The Safe House, are classified as financial institutions and because they are local companies, they are only subjected to Singaporean laws and regulations. This means that silver and gold bullion stored in The Safe House is out of reach of any foreign (tax or financial) authority such as the US Internal Revenue Service (IRS). Additionally, foreign regulations such as Foreign Account Tax Compliance Act (FATCA) or the OECD initiated Common Reporting System (CRS) do not apply to Silver Bullion and The Safe House. This therefore ensures that clients’ gold bullion is safe from any unforeseen events such as nationalizations, seizures or confiscations that have happened in the past in many countries across the globe.
The Safe House has state-of-the-art security, with the operation security provided by armed Singapore Auxiliary Police, and 24/7 monitoring services and CCTV backup. In addition, the facility is equipped with quadruple alarm type sensors and 2.5 tons Class I door where all the silver is stored and Class II door for the ‘gold vault’ – a vault within a vault - where gold and platinum are stored.
For added security and protection against theft, fire, building collapse, infidelity and negligence, clients are provided with a comprehensive insurance policy underwritten by Chubb Insurance. This insurance policy also includes coverage against mysterious disappearance, a clause not commonly included by most vault operators. As of 2017, the insurance coverage has been extended to SGD 300 million for any loss, as well as to include the protection against terrorism and sabotage making the coverage at the Safe House a true ’all risk’ insurance.
Bullion Storage and Safe Deposit Boxes at Silver Bullion’s TSH
The Safe House offers two types of private vaulting storage: Bullion Storage (available via Silver Bullion) and Safe Deposit Boxes (SDBs). Each option is specially designed to meet different client needs and preferences. Below are some of the basic differences between Silver Bullion’s Bullion Storage and SDBs.
Clients who choose the Bullion Storage option can purchase bullion online, after which it is parcelized by Silver Bullion and stored at TSH. The clients can track their bullion online at all times and also sell it whenever they wish.
Bullion Storage also serves as safe storage of bullion that clients can use as collateral for obtaining loans through Silver Bullion’s online Peer-to-Peer (P2P) lending platform. The borrowers can collateralize their stored bullion (which gets locked for the duration of the loan) to obtain affordable credit. The lenders can obtain good returns on their loans while being sure the bullion used as collateral is secured; in many cases the yields are higher than in normal bank savings accounts.
Safe Deposit Boxes (SDBs)
To deposit or withdraw bullion from a safe deposit box in The Safe House, the system requires the signatures of two TSH officers, an auxiliary police officer, and the client. In addition to unrivaled security, absolute transparency is what distinguishes The Safe House from other gold vault facilities as it allows personal audits for their clients. As a result, more privacy is guaranteed.
SDB option also allows for the Initial Remove Deposit. Namely, TSH staff places the bullion purchased through Silver Bullion into a safe deposit box on behalf of the client. The whole process is video recorded and the video is sent to the client together with the key. After that, the SDB can only be opened in the presence of the client or an authorized representative.
Furthermore, outside attacks on the bullion in SDBs are prevented using the ISO 9001 certified, bespoke Vault IT Management System. The system is hosted offline, disconnected from the internet or other networks that may be conducive to an outside attack.
As opposed to Bullion Storage, clients who choose to store their bullion in safe deposit boxes at TSH cannot sell their bullion back through Silver Bullion online nor use the bullion to obtain credit through Silver Bullion’s P2P platform.