27 July 2020
Troy Gold in Singapore
Singapore is a small city-state, but also one of the most successful countries in the world. It has no natural resources, and is roughly 4% the size of Gauteng – measuring 50km East-to-West and roughly 27 km North-to-South.
To put this in to perspective, that’s less than driving from Pretoria to Johannesburg, or Durban to Pietermaritzburg. In that small surround, lives 6 million people with the 7th highest GDP per Capita (nominal) in the world. It means that the value of all final goods and services produced per person in Singapore amounts to US$ 64,000, and that on total GDP per year is US$325 Billion, roughly equal to South Africa’s.
It has a AAA credit rating, a net-debt to GDP ratio of effectively 0%, an unemployment rate of 2%, a maximum tax rate of 22%, is ranked second in the world for ease-of-doing business, and is considered a tax haven. All of this happened in less than 55 years, because Singapore was granted it’s independence in 1965, and was only a rural, underdeveloped harbour island that was mostly used as a trading spot between the British Empire and China across the old Spice route, as well as between India, China and the Malaysian Archipeligo.
South Africa, similarly became a fully autonomous nation in 1960. In contrast, we house the world’s richest gold, diamond and platinum fields, 10.3% of the country’s landmass is arable, forests for forestry accounts for 11% of our agricultural income, is home to 1.5% of all the grape vineyards in the world and houses 57 million people.
SA’s GDP per capita is c.US$7,500, has a credit rating close to junk, an unemployment rate of 30%, a maximum tax rate of 45% and is ranked 102nd in the world for ease-of-doing business.
Asia is currently driving global demand for gold, with global investment having more than doubled since 2009. Wealthy investors around the globe started to allocate physical gold and other precious metals in their asset protection portfolios, and also to look for store it in a safe jurisdiction. Quickly evolving as a global private banking center and a wealth management hub, Singapore soon started to be the preferred choice.
With Asia being conducive to the biggest physical flow of gold worldwide, Singapore’s strategic position in the region came to play. Singapore’s strategically situated to capture the physical flows of gold primarily, followed by silver and platinum.
In 2012, With investment precious metals (IPM) being recognized as financial assets, the Singapore Government exempted IMPs from Goods & Services Tax (GST), and there are no reporting requirements ensuring investor privacy. Consequently, the change in taxation propelled IPM refining and trading in Singapore. The import of investment precious metals, including some investment grade gold and silver bullion, is tax-free, with both importers and IPM refiners benefiting greatly from the GST suspension.
What followed was an explosion in the development of a gold eco-system and insfrastructure in the country, with the world’s largest gold refiners, trader and dealers setting up operations in Singapore. The place was ready to welcome the world’s gold investors!
Troy Gold in Singapore
As a gold fintech, the rise of a gold as well as a fintech infrastructure and environment in Singapore, tweaked our interest as to how our clients could benefit from this gold oasis.
We’ve been hard at work here the past two weeks and have been overwhelmed by the welcome we’ve received, and the openness by industry players to work with us.
We’re excited about some plans which we trust could unlock great value to you, Trojans – so watch this space!