There is no doubt that buying silver while prices are historically low can turn out to be the investment of a lifetime. But buying silver online can be a hassle, especially if you don’t know where to turn.
How do you find a gold and silver bullion dealer that is reputable and trustworthy?
How do you know if it’s safe to order from a particular bullion dealer, and how can you be sure that your products will arrive in a safe and timely manner?
It’s essential that you find a dealer you can trust so you can be certain that you products will be delivered safely within the timeframe stated by the dealer and without any risk for you. But how do I find such a dealer?
Buying silver in Singapore – The safest country in the world
Where to buy silver depends on where you live and your preferences in regards to storage. By storing your silver yourself, you eliminate middlemen risk. There is however a risk of the silver items being lost, stolen or forgotten about.
It may therefore be safer and more secure to store in a silver vault. Be certain to choose a jurisdiction where you or your silver storage provider doesn’t need to report your holdings to any government authority. You may bear a higher risk of government confiscation or theft when more people and institutions (government included) knows where you store your bullion.
One way of researching different silver dealers is to see how others rate them. One site where you can read about other people’s experiences buying gold and silver is the website Bullionreviews.com. Some of Singapore’s largest bullion dealers are featured on the site. Customers can comment and grade the different dealers on a scale from 1 to 10.
Storing silver bullion in Singapore
With the US and the EU making it more and more difficult for people to invest in alternative assets, it is important to consider how you can buy and store bullion in a safe jurisdiction outside reach of the US and the EU governments.
Storing silver bullion, especially if you are a large investor or live in a country with high crime, can sometimes be a hassle. By choosing to store your metal in a country which has a long record of stable government and an exceptional record of defending property rights, you can limit the risk for these measures.
Singapore stands out as one of the most business friendly countries in the world, consistently ranking top three in business friendliness in global comparisons. The Singaporean government has lately taken steps to deregulate and decrease tax for bullion companies and bullion investors by exempting bullion from the island-wide 7 % Goods and Services Tax (GST) payable on most items. The Singaporean government has done this to facilitate for the establishment of a gold and silver trading hub in Singapore.
With one of the lowest crime rates in the world, Singapore stands out in the competition as the best country to store silver..
Furthermore, there are no general reporting requirements to any government authorities, whether domestic or international, for bullion dealers in Singapore. With no reporting to foreign governments, Singapore is an ideal place for jurisdictional differentiation when you buy silver.
When you choose a storage method for your precious metals, it is important to you make sure that the metal is fully allocated. This means that you can take delivery of your silver whenever you want. One Singaporean bullion dealer, Bullionstar.com, offers its customers fully allocated storage of their silver and gold bullion for free. BullionStar also has a solution called Vault Gram. With Vault Gram, you can trade fully allocated gold and silver 24/7.
Cash and carry
In Singapore, theft is rare and violent crimes like robbery are virtually unheard of. This makes the option of cash-and-carry an attractive purchase method. Bullion dealers in Singapore often offer you to pick up your purchased silver bullion yourself. The advantage of a cash-and-carry transaction is obvious. You can see and verify the items before making the final payment. Singapore is also a very cash friendly country with no special reporting requirements if you pay for goods by cash.
Value added tax?
If you reside in the EU, it is difficult to find VAT-free silver. While gold is exempted from VAT generally in the EU since the start of the new millennium, silver isn’t. This means that most silver items if purchased in the EU is levied with VAT as high as 25 %. The EU directive states that silver coins which are legal tender are exempted from VAT. This has however been interpreted by most countries as it is only normally circulating legal tender that is exempted and not silver bullion coins like the American Silver Eagle, the Canadian Silver Maple Leaf or the Austrian Silver Philharmonic.
For EU silver investors, the only way to invest in silver without having a big chunk of the money eaten up by the government has been to order silver from countries like Germany or Estonia. Germany levies 19 % VAT on silver bars but only 7 % on legal tender silver coins. Germany has however decided to hike the VAT rate on silver coins to the general level of 19 % effective 1 January 2014.
The only country in the EU that is currently making a reasonable interpretation of the EU directive is Estonia. In Estonia, silver coins can be sold VAT-free .
What types of silver bullion should I buy?
Choosing what types of silver bullion to invest in is very much a question of your personal preference. Your choice of what silver bullion to buy may depend on the reason why you invest in silver and where you live. In some countries, the VAT/GST/sales tax may be higher for silver bars than for silver coins and in some countries it is possible to buy second hand silver with no or less tax. You should therefore always try to buy silver in a jurisdiction where no or limited VAT/GST/sales tax is added.
Some countries give you an option of including silver in your retirement account. This is the case in the USA where certain precious metal products are approved under the Internal Revenue Code. To meet the IRA standard, the minimum silver purity for a silver bar must be .995 (99.5 %) or higher. IRA has also approved some silver bullion coins like the American Silver Eagle, the Austrian Silver Philharmonic, the Mexican Silver Libertad and the Canadian Silver Maple Leaf.
In some countries like the US, there are reporting requirements for selling certain types of silver. This is why you should always consider placing your business with a precious metals dealer in a jurisdiction with no special reporting requirements like Singapore or Hong Kong.
For more advice on buying silver, please see our section “Silver Bars or Silver Coins?“