Build a Bulletproof Asset Protection Strategy in Singapore

Asset protection is a set of legal techniques devised to protect the assets of individuals and business entities from liabilities without tax evasion or perjury. An asset protection strategy is not synonymous with limiting liability, which is action taken to stop or constrain liability to the asset or activity from which it arises.

As an individual or business entity, you can create an asset protection strategy to shield your assets or precious metals from unfair advantages on the part of creditors by operating within a legal framework.

The amount of control you will exercise over your assets will be determined by the level of protection you want. Generally speaking, an asset protection strategy that provides the most protection in turn provides the least direct control of the assets.

The Concept of Asset Protection Strategy

Asset protection strategies include trusts, limited partnerships, general partnerships and offshore establishments. With trusts, an individual can title an asset to a trust, meaning the asset is no longer in their name. The most important thing is that trust-owned property is owned privately, which secures the first level of protection. Similarly, assets owned by a legitimate business entity are protected from business owners’ personal liability, which is the foundation for liability protection.

Offshore protection is provided by financial and safe havens such as Singapore. These offshore asset protection centers have a set of legal statutes that offer protection of foreign investors’ assets. By implementing the laws of more than one foreign jurisdiction, offshore asset protection strategies can secure the strongest level of financial privacy. The legislation backing these strategies was created specifically to facilitate foreign individuals’ asset protection.

Best Asset Protection Strategies in Singapore

A widely recognized wealth management center, Singapore is the go-to place for high net worth individuals and companies when it comes to protecting their assets. Singapore is perhaps best known as a regional hub for trading and safe storage of precious metals, attracting more and more foreign investments in precious metals.

One of the main reasons for so many foreign high net worth individuals to choose Singapore as a place to buy and store their bullion is pretty simple: as of October 2012, Singapore has allowed for the tax-free import and sale of certain investment grade gold, silver and platinum, defined as ‘’Investment Precious Metals’’ or IPM.

The Singapore Government directly influenced this change with the aim of making Singapore a precious metals trading hub. Also, the tax change came as recognition of IPM as financial assets.

Additionally, Singapore is also an ideal place to purchase and store IPM like physical gold due to competitive prices with low premiums and reasonable storage costs.

SWAG wealth protection assets

Other than considering precious metals for their asset protection strategy, some high-net worth individuals also use assets such as art, which is defined as a SWAG asset (other SWAG assets being silver, wine and gold). These are all luxury assets, and using them as wealth protection assets is considered economic common sense. Assets like art are scarce and durable, and also add diversity to one’s asset protection portfolio.

Gold Investment as #1 Asset Protection Strategy in Singapore

Ever since the introduction of Zero Interest Rate Policy (ZIRP) and Negative Interest Rate Policy (NIRP), alternative means of asset protection have been devised. Investing in gold has been on the rise, since gold is long thought to be the only safe haven asset that can really hold its value, therefore providing the maximum amount of protection.

Generally speaking, once money is converted into physical gold, such as bullion or gold coins, it's not reportable under IRS or Treasury offshore reporting regulations mostly because it's not held in a bank, but in a secured private vault. More specifically, safe deposit boxes (SDBs) are extremely popular for storage, because gold stored in SDBs is not reportable to IRS under the Foreign Account Tax Compliance Act (FATCA). Protection of private property (including gold and silver bullion) is at the very core of Singapore’s economic sustainability. Therefore, companies that offer storage in safe deposit boxes are not categorized as financial institutions, just like SDBs are not considered financial accounts. As such, FATCA regulations do not apply to physical gold (and silver) stored in SDBs.

Moreover, physical gold such as bullion is a finite, tangible, divisible and moderately scarce asset. Physical gold does not carry the counterparty default risk because it's not issued by a central authority. Additionally, gold bullion can serve as an exchange medium, value storage, and can also provide account of economic transactions and valuations. Perhaps most importantly, physical gold retains its purchasing power regardless of price fluctuations and is seen as the ultimate inflation hedge.

In Singapore, the jurisdictional protections make it not only more convenient but also safer for wealth builders to purchase and store physical gold. This especially applies to tax-free purchases and import of investment grade gold that qualifies as IPM.

Physical Gold Protection and Storage in Singapore

Protecting privately owned physical gold is crucial to guaranteeing an effective asset protection strategy. Singapore-based company Silver Bullion provides safe and reliable storage for non-taxable physical gold and other IPMs. The company established the S.T.A.R Storage in 2011, which segregates bullion into equally sized and uniquely identified, tamper evident, parcels. Each parcel is owned by the customers, and the contents of the parcels are authenticated through the company’s own non-invasive testing method called DUX testing. Parcels are fully insured and stored at Silver Bullion's subsidiary state-of-the-art vaulting facility The Safe House (TSH).

With the S.T.A.R Storage, Silver Bullion leverages Singapore's exclusive jurisdiction, enabling customers to have full protection of their physical gold and, in turn, be confident they have chosen the right protection strategy for their assets.