Your Guide to Storing Wealth Overseas in Silver

Silver has been a sought-after metal for millennia. It is easy to understand why when you handle this remarkably shiny metal. Of course, it is a mainstay of the jewellery-making industry but the metal also has practical uses in dentistry, mirror manufacturing, brazing alloy production and for electrical contacts. As such, it is always an in-demand commodity. However, it is as a means of storing – and growing – wealth that many investors will take an interest in it. What is it about this precious metal that makes it a good commodity to store your wealth in offshore high-security vaults?

A 1-kilo silver bar and a Vienna Philharmonic coin appearing on the economic section of a newspaper
Silver bars and coins are both possible investments.
© NathalieVanBergen –

Silver-Based Investments – What You Need to Know

Firstly, this precious metal is one of a group of others known as the white metal group. It also includes metals such as palladium and platinum. All precious white metals have a similar silvery appearance despite the name. All are particularly good for storing wealth because they come in convenient ingot, sometimes bars or as coins, for instance. This means that a great deal of wealth can be stored conveniently in a relatively small amount of space.

Although the valuation of the metal is partially tied to demand for it on the open market – which largely means industrial usage of it – silver is extremely sought-after as a wealth storage medium. In other words, even when industrial demand might falter, perhaps because of a global economic downturn, demand for it among private investors tends to go up.

Like other precious metals, it is also a good option when there is geopolitical unrest or the potential for inflation. After all, it has not been unheard of for negative interest rates to apply in some corners of the world, something that has made precious metal wealth storage all the more attractive in recent years. Of course, some people will understandably prefer gold as an investment commodity. It is often seen as the go-to option.

Silver Compared to Other Investment Forms

Because it is a tradeable commodity that can be used in several industries as well as a method of storing wealth, the white precious metal is often preferred by serious investors. It is frequently able to grow in value when, by contrast, deposited cash is subject to inflationary pressures. Given that privately operated vaults are often the preferred way to keep wealth in storage overseas, putting precious metals into them makes a great deal of sense compared to depositing currency.

Three silver bars of 250, 500 and 1000 grams
Silver bars are available in different sizes, but they are standardized.
© vladk213 –

Additionally, all precious metals bars are standardised, meaning you can immediately assess how much wealth you have stored. This is in stark contrast to gemstones, such as rubies and diamonds. With these sorts of precious items, you have to be an expert to estimate the value of the items you have in storage since their quality and market prices can alter greatly.

Another important factor in choosing to store wealth in bars or coins made from the white metal is that it can be supplied in very pure forms. Popular investment coins, such as the China Panda, the British Britannia or the American Eagle all come with a fineness that is rated at or above 999 parts per 1,000. This means that its reliability and verifiability can both be expected so long as a reputable precious metal trader is involved.

A large quantity of Vienna Philharmonic and Maple Leaf coins
The Vienna Philharmonic and Maple Leaf coins are among the most popular investment coins.
© crafter –

By comparison with gold, it should also be noted that the silver is much lighter. Anyone storing their wealth for long periods in a secure facility overseas may not be worried about the relative weight of the two metals. However, if you ever plan on transporting your wealth in person and to take it with you to a new location, then coins and bars which are more manageable to carry may well be the best option.

Finally, all white precious metals are known for their great stability. Jewellery silver can go dull if it is not kept clean but it does not react with other elements very easily. Therefore, this metal is a flexible wealth storage medium if you want to put it into your own safe deposit box for safekeeping along with other items. It won’t react with diamonds, for example, nor will it deteriorate if it is placed in close proximity to other metals or gemstones.

Understanding Tax Issues and Buy Silver without VAT

By contrast to gold, people who want to buy silver, platinum, palladium or other precious metals will usually need to pay sales tax. This is the form of value-added tax that is known as VAT in the UK. Although different rates apply for this form of tax on silver in different countries of the European Union as well as the various states of the United States, you can be sure that it will be levied. Generally speaking, the best place to purchase the precious metal is in Switzerland or the Principality of Liechtenstein because lower rates of sales tax tend to apply in those countries. What’s more, those rates tend to be very stable indeed.

Nevertheless, any investor who wants to maximise their investment potential for the sum they spend can get around sales taxes quite easily and in a perfectly legitimate way. For all overseas investors, this means being able to buy more coins or ingots for their money. The way to do this without unlawfully avoiding the due tax is to purchase your investment from a registered precious metal trader who can deliver to a tax-free vault.

All that needs to happen is for a transaction to be made from your location with the chosen precious metal trader. Once the payment has been made, the white metal will leave the custodianship of the trader and be placed into your ownership within a duty-free warehouse. This allocated and segregated storage method allows you to buy silver without sales tax or VAT.

In Switzerland, there are two types of tax-free environments where such practices are legally allowed to occur. Swiss people refer to these as OZL and ZFL which approximately translate as either a duty-free warehouse or an open bonded warehouse. Effectively, these are places outside the jurisdiction of tax authorities just like storing wealth on the high seas. There are several of these facilities in Switzerland.

From an overseas investor’s point of view, these warehouses are a great option because they they make it possible to buy silver without VAT or sales tax. There are a couple of technical differences between the two types of warehouse but they don’t really impact on overseas investors who simply want to store their wealth for a time in an offshore facility. So long as the investment is kept in the open bonded warehouse where it was bought, it will remain tax-free. Tax would only be due if the investor concerned chose to take his or her property out of the facility which, of course, remains their right. If so, then the local rate of tax would apply but, as mentioned, this tends to be lower in European, but non-EU, countries.

Finally, it is worth mentioning that such warehouses are very secure facilities in their own right. Access is restricted to authorised persons only. Generally speaking, where privately operated vaults are situated within them tends to be the most secure part of the entire facility.

Three silver bars
Bars are useful for investing larger sums in silver.
© vladk213 –

To Conclude

Silver is one of a number of different white precious metals that is a good investment tool for storing wealth. It has many industrial uses, something that pushes its value up but it is also often favoured in times of recession. It can be purchased in bars or coins and stored professionally in high-security vaults outside of the European Union’s jurisdiction. The metal is stable and is a good means of hedging against price fluctuations in other precious commodities, such as gold. It is relatively easy to transport but investors who want to store as much as they can for a rainy day or to enjoy a prosperous retirement can buy silver without VAT. This will mean buying it and keeping it in a tax-free bonded warehouse. Helpfully, metal traders operate from them to simplify the process of both buying and selling back such assets.