Do you want to protect your gold investment from the taxman and unfavorable government regulation? We recommend buying and storing gold at a location other than your home country. However, if you are wondering how to protect that gold offshore, you are not alone.
Gold is a physical investment, unlike cash or cryptocurrency that you can store in a digital form. It needs a secure storage option to protect it against theft, natural disasters, corrosion, or criminality. Gold has been a store of value for millennia, and investing in this precious metal comes with multiple challenges.
A surprising disadvantage of investing in gold surrounds the unfavorable tax laws governing gold investments for local investors. This dilemma is a big part of why offshore gold storage has become so attractive worldwide. In many cases, it is far better to look for gold storage in safe overseas private vaults to diversify your investment.
Gold Investment Review offers some handy tips below for ways to handle your offshore gold storage to eliminate the risk of theft and avoid handing over your hard-earned interest to the insatiable tax authorities.
It’s easy to forget that the authorities pegged the dollar to gold as recently as 1970. On August 15, 1971, President Richard Nixon announced that the United States government would no longer exchange dollars for gold at a fixed value, abandoning the gold standard and decoupling the US dollar from the timeless commodity.
Cash or fiat money became king, but rising inflation has eaten into this value considerably in recent years. After a series of depressions and steep inflationary pressures, Western governments have also been printing cash at an unprecedented rate, particularly the US government. The most recent trouble occurred with the Financial Collapse of 2008 and the Covid-19 pandemic of 2020.
As global financial authorities sink further into debt, a combination of worrying factors has made fiat currencies a more uncertain investment. Many investors have felt that their local governments are out of touch with rampant inflation, and they are either turning to unstable investments like cryptocurrency or running to the precious metal haven.
Top Reasons to Store Your Gold Overseas
Under the abovementioned circumstances, investing in gold is prudent. It also comes with several benefits that fiat currencies cannot match, including:
- hard assets
- hedging against inflation
- long-term security (if there is reliable storage available)
- free market-driven value
There are also a few important factors that may sway your decision as you look for reliable offshore storage options for your gold:
In the 1930s, President Franklin D. Roosevelt gave Executive Order 6102 that outlawed gold ownership in the United States. Owning gold became a federal crime, punishable by a fine of $10,000 and ten years in federal prison. This Executive Order compelled American citizens to give up their gold to the government, reimbursed at $20.67 an ounce.
President Roosevelt then reissued the price of gold at $35 per ounce, causing citizens to lose half their savings in a single day. America’s precious metal investors have a solution—storing gold in overseas territories does not require compliance with future obstacles similar to Roosevelt’s Executive Order. Offshore storage is a winning strategy, especially to put your investment far out of the reach of the IRS.
Unrest and Terrorism
After the 2001 terrorist attacks in the United States, the world of security has journeyed into new realms. That day’s terrorist attack was devastating to the United States, but the subprime mortgage lending crises in 2008 and the start of the global pandemic in 2020 were equally influential. In particular, the United States has seen hyperinflation and social unrest happening on an unprecedented scale, and it seems far more than a brief inconvenience to local investors.
If the problems continue, the US government could order all banks to close for a week or more, resulting in bank runs and worse. A store of value outside of your country of residence mitigates these types of risks, not only for American citizens. An offshore bank account acts as a Plan B strategy, and offshore gold storage is even better.
If you choose to store gold in other countries, it is also safe from litigation at home. For example, courts in the United States do not have jurisdiction in places like Austria, Switzerland, New Zealand, Hong Kong, and Singapore. These countries are sovereign, and your gold investment will be subject to that location’s own financial regulations.
Best Countries for Offshore Gold Storage
Securing offshore storage for bullion is essential if you are one of the savvy investors in precious metals, including gold, silver, palladium, copper, or platinum. Below, we discuss a few favorable storage locations across the world as you seek to protect your gold investment.
Our top choice for overseas gold storage is Singapore, a modern and innovative country with little corruption or crime. Singapore’s private gold storage vaults are lightyears ahead of European countries, such as Switzerland. A few private vaults even let you view your gold online or with regular photo updates for peace of mind.
Singapore’s modern approach also makes it easy to sell, swap, and even borrow against your gold at decent spreads.
Austria is the only country in Europe that offers enhanced financial privacy and secrecy when it comes to gold investments. You can even store gold anonymously in two or three private Austrian vaults, including the well-known Das Safe in Vienna. It is not cheap, but the privacy and anonymity are worth their weight in, well, gold.
The other benefit of Austria’s system is that you secure your gold in Europe, an easy plane ride away from the United States.
It is New Zealand’s remote location that makes it a popular overseas territory to store gold. Although New Zealand is not a low-tax country, they are very welcoming toward outside investors. This country is also out of reach of the more volatile regions.
Switzerland has been storing gold for centuries, and its financial industry professionals are masters of wealth protection strategies. This country has the world’s largest reserves of gold per capita, which is probably why the storage fees are so exorbitant. The Swiss have also abandoned financial privacy, so you won’t be able to store your gold anonymously like in Austria.
If you have an extensive portfolio, Switzerland is still a reliable secondary offshore gold storage location.
The Cayman Islands
The Cayman Islands is another ideal location for offshore gold storage that is close to the United States. It offers high-end jurisdiction with excellent financial and customer services. The country is trying to attract gold investors, so their storage options are great.
The only potential downside is that the Cayman Islands form part of the British Overseas Territory. The United Kingdom could potentially interfere with the financial or legal regulations regarding your hard asset or its storage on the island. However, the chances of this happening are slim with Brexit diverting the attention of its political players.
The final choice may not be one that you automatically put at the top of your offshore gold storage list, but it is well worth consideration. There is continuing unrest in the Middle East, but Israel remains an excellent location for storing and protecting your gold. Tel Aviv, in particular, is an ideal location for gold storage, with several precious metals and logistics companies that know how to handle, protect, and store precious metals.
Israel also has a neutral attitude to Western governments, encouraging an extensive range of citizens across the globe who contribute significantly to its cultural melting pot.
How to Create a Solid Offshore Strategy to Protect Your Gold
If you have gold, a private vault company is the best way to store it. Look for a vault company with the following features as a benchmark:
- Private account managers
- Competitive prices
- Low storage fees
If you have substantial amounts of gold, a better strategy is to create a varied portfolio of vaults. Diversifying gold reserves ensures your privacy and enhances security across gold storage facilities. The facilities do not need to be in the same country, either.
A word of caution from the experts is to never store gold in an offshore bank’s safe deposit box. Offshore banks are still under the control of the government and central bank authorities in those territories. If these two entities change the rules of gold investment, your investment would be at their mercy, and you may lose a chunk of your initial investment.
If you are a citizen of the United States, you would also still need to report hard assets to the IRS, even stored in a bank on foreign soil.
Schedule a Consultation and Learn About Gold Today
Are you starting to invest in gold? Think carefully about the best storage options in terms of security, costs, location, and access. The best places to purchase gold and gold investments won’t matter without a good handle on where you would like to store your newfound wealth.
The team at Gold Investment Review believes in prudent gold investment strategies, and we have a wide range of resources. Feel free to peruse our website for topics covering gold investment, storage, diversification, and more. We also offer guidance about reliable gold investments and purchases at excellent prices.
Protect your investment with offshore gold storage; contact us today or read more about our vetted gold IRA investment partners online.