Thanks to anti money laundering laws and the strict reporting being followed by banks and bullion dealers alike, it’s safe to say our governments could easily find our privately-owned bullion if they needed to. This is why offshore gold storage is so valuable.
This has happened. Citizens were given paper dollars for their gold, at a price of $20.67 per ounce. When all gold was collected, FDR immediately devalued the dollar by reissuing the price of gold at $35 an ounce. In other words, U.S. residents that turned in their gold lost almost 50% of that savings value overnight! Don’t think this scenario could happen? In the 1930s, neither did they!
Offshore banks, once a safe-haven and tax-avoidance package to many, have lost almost all of their privacy after an onslaught of transparency regulation from FBAR (Report of Foreign Bank and Financial Accounts), FATCA (Foreign Account Tax Compliance Act) and CRS (Common Reporting Standards) – regulations which now affect 80 tax-havens and mean they must share with foreign tax authorities full details of client bank balances, including interest, dividends and any income from insurance products!
Why Off Shore Gold Strorage?
This puts buyers in some jurisdictions at a serious financial disadvantage when trying to see a gain from their precious metals investments, and safety from Government claiming back all privately held gold. They would need the market to rise by both the dealer’s premium AND the sum of the purchase tax before they’d be in the black. And if the Government’s economic standing gets desperate enough, they can, and have in the past, called on the precious metal holdings of private citizens to help stabilise federal liquidity.
Let’s think worst case—should the currency collapse in your home country…and should a bank run ensue…and should the government mandate that all banks then close for no less than a week…and should subsequent food shortages take place…and should no clean water be available…and should the electricity and heat not work… and should violent protests, riots, and widespread looting erupt…
Off Shore Gold
In addition, I’ve long believed that exchange controls will, at some point, return to the developed world—and sure enough, we’re seeing first signs of capital controls being enforced in the US, whereby banks are limiting or disallowing wire transfers abroad. In Europe, Cyprus has of course already fallen under a strict regime of capital controls.
One of the leading firms in America, the company we deal with has provided rock solid and uninterrupted service handling the private purchase, secure vaulting, and liquidation of gold and silver bullion for its clients. This track-record has earned the company international recognition, not only from the quality and integrity of its products and services, but also from its dealings within these markets. With an office in the Dubai DMCC free trade zone, one of the strictest markets to enter, they are able to secure gold off shore. This provides customers the security and anonymity not available in most countries.
The company orders silver or gold bars from a certified LBMA refinery. There are no risks of legal issues with conflict gold. The bars are poured, certified, and transported to the 5th most secure vault facility in the world by certified armored cars and is fully insured by the worlds’ top insurance carrier while in transit for full market value.
This company will create a “Bailment” contractual relationship for the custodial care of your silver and gold bars. Ownership always remains with the investor while the bailment process begins with the original purchase of the gold and silver bars, transfer from point of purchase to the company’s vaults where they are stored.
Internationalization is be a better solution. Now, more than ever, moving some money out of your home country makes sense; if you keep all your wealth within one nation, particularly the nation in which you reside, you’re at the utter mercy of that nation’s exchange controls, tax confiscation, frivolous litigation, and bureaucratic extortion.
Capital Gains Tax, or it’s equivalent is the tax you pay on profits realized when you sell bullion – however what you pay or even if you pay anything at all, varies enormously depending on your location.
Gold and silver have served as money for centuries and across many different civilizations. They have always been inherently international assets. There is nothing at all particularly American, Chinese, Russian, or European about gold or silver. Buying gold and silver is perhaps the easiest step you can take toward internationalizing your savings. The next step is to store your precious metals in a safe foreign jurisdiction.
Offshore Gold Investment
Even in countries where there is zero purchase tax on investment gold, there may be a tax on investment silver. In the UK there is 0% sales tax on gold bullion. But silver bullion bars still see an extra 20% added to the buy price.
Much as we saw happen in Greece where account holders were stripped of their savings, Western banks have now been given the green-light to enter our savings and investment accounts and take our money to stay afloat – through a process known as a bail-in.
Well it’s not exactly free from government interference. Most gold investors know of Roosevelt’s 1933 gold raid a national gold confiscation. By passing a bill the American people were revealed of their ownership of investment bullion.
Once the Order had been enacted, owning gold became a federal crime. It became punishable with ten years in federal prison and a $10,000 fine. No individual, partnership, association, organization, or corporation could possess monetary gold, in any form. For any reason. The Order commanded all U.S. citizens to relinquish the gold they rightfully owned to the U.S. government.
Gold and silver have historically been excellent ways to preserve one’s purchasing power over the long term. However, in today’s world it does not act well as a medium of exchange. In contrast, many of the world’s fiat currencies are now being questioned as a store of value, but are still used predominately for exchange.
There are banks in stable jurisdictions with low debt that don’t gamble with customer deposits (i.e. your money). Many of these banks are much better capitalized and keep more cash on hand. They are otherwise much more conservatively run than those in the U.S.
US taxpayers who have a financial interest or signature authority over foreign bank or financial accounts must file if the aggregate value of those accounts exceeded $10,000 at any time during the calendar year.
Some countries treat gold differently in their taxation of profits. The European Union (EU) exempts purchasing and the sale of gold coins and bullion from their VAT tax. But trading other precious metals is subject to the VAT. As of this writing, U.S. taxpayers are not required to report gold stored overseas to the IRS. Hence offering a way to store wealth privately.
Safety Aspect of Offshore Gold Ownership
Physical Ownership of Gold is a safer option than corporate shares or gold certificates. Those are no more than a promise to pay and not an investment that is guaranteed. In a financial crisis all of the shareholders and certificate owners would hurry to dispose of their paper for less than what they are worth. Actual physical ownership of gold is truly worth its weight in gold!
Even if your home government doesn’t slap on capital controls or confiscate deposits, you’re no worse off for having moved your savings to a safer home. In fact, you’re far better off for the reasons described above. Obtaining an offshore bank account is a prudent step that makes sense no matter what.
A big part of any strategy to reduce your political risk is to place some of your savings outside of the immediate reach of thieving bureaucrats in your home country. Setting up a foreign bank account in the right jurisdiction is a convenient way to do just that. But even better is to store wealth in bullion.
Despite what you may hear, offshore banking is completely legal. It’s not about tax evasion or other illegal activities. It’s simply about legally diversifying your political risk by putting your liquid savings in sound, well-capitalized institutions where they are treated best.
Suppose, you cannot get the medical care you need in your home country and you have to go abroad. You would have to transfer money abroad to pay for it. However, if your home government has already imposed capital controls, it could be difficult or impossible to pay for the medical care you need.
That way your home government can’t easily confiscate, freeze, or devalue all of your money with a couple of taps on the keyboard. If your home government imposes capital controls, an offshore bank account would help ensure you could access your money when you need it most.
But make sure to consider moving at least a portion of your savings into a safe, stable, highly liquid jurisdiction abroad that is out of reach of your home government and can easily weather a financial crisis.
Who can own Gold in Offshore Storage?
Nonetheless, all of the banking jurisdictions above accept foreign clients and even Americans. It is still possible today to open a foreign account. Though it might take a bit more effort than before. The only limit placed on Gold stored in Dubai is accepting money from “Conflict Zones”.