It is estimated that Singapore will overtake Switzerland and become the biggest commodity trading hub in the world by the year 2025. Currently handling 20% of the world’s agricultural commodity trading, Singapore is also Asia’s biggest trader in oil and has now set its sights on becoming a world trading hub in precious metals.
Seizing the Initiative
Formerly known as the Trade Development Board, International Enterprises Singapore has spearheaded the city’s drive to develop its overseas economic position with great success in recent years. IE Singapore has not only established the city nation as one of the major players in agricultural commodities trading but is pushing ahead to make Singapore a major hub in the precious metals trade with a series of initiatives designed to attract more investors and trading companies.
Due to its success in commodities trading, Singapore already has the necessary infrastructure in place as well as the network of financial institutions required for dealing in precious metals. The building of a world class precious metal refinery in the city convinced many that Singapore was the place to be for both trading with Asia as well as the western world.
The city’s road and rail network has been, and continues to be, expanded and improved but it was the government’s decision to exempt precious metals for investment from a Goods and Services Tax that really sparked interest from abroad and triggered Singapore’s rapid growth.
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IPM (investment precious metals) have been exempted from a 7% Goods and Service tax since 2012. At that time, Singapore was already expanding rapidly in the precious metals marketplace but the government decision to remove GST has added even more appeal for the biggest traders and investors in precious metals.
Another vital factor in Singapore’s rising popularity with precious metals traders is the fact that the city is regarded as a secure location for storing large amounts of gold and silver since the building of Singapore’s own version of Fort Knox near Changi airport. With direct access to the runways, 24 a day armed guards and over 20,000 square meters of strong rooms, many international banking giants such as Deutsche Bank, UBS and ANZ have set up their own secure gold storage vaults.
Swiss commodities trading company Trafigura moved headquarters to Singapore in 2012 and Mitsubishi Corp followed suit switching its worldwide metals headquarters to the city. Many other traders have followed the trend in recent years by establishing a presence in Singapore and the numbers continue to grow.
Demand from Asian markets is a huge contributing factor in Singapore’s bid to become a precious metals trading hub but demand for gold in the form of bars, jewellery and coinage is rising year upon year, not just in Asia but, worldwide.
Commodities traders, and increasingly those dealing in precious metals, are setting up operations in Singapore. From the smallest sole trader to the biggest multinational, Singapore is fast becoming the most significant hub for precious metal trading and IE Singapore is ready, willing and able to assist newcomers with lots of useful tips for Singapore business start up planning.