Why is Gold a Long-Term Investment? Opinion of the Founder and Director at HELPYOU OÜ Natalia Revenko
In the so-called post-Covid world, it is not easy to maintain financial savings. To boost their economies, governments raise taxes and gain access to banking secrets. To replenish post-coronavirus budgets, deposit clippings or other initiatives may be undertaken.
In such conditions, many are asking questions: is it worth opening an account in gold, how reliable is this deposit and is it possible to get physical access to it? Natalia Revenko, a leading expert on international corporate and banking services, the founder and Director at HELPYOU OÜ, gave her recommendations in this regard.
Benefits of gold you may not know about
“The trust in gold is undeniable. The price of gold can rise and fall, but the value and demand remain stable ... Unlike foreign currency savings, precious metal is less susceptible to changes in the state foreign exchange policy and the impact of sanctions. It has financial immunity,” said Natalia.
Another significant advantage of gold is the confidentiality of ownership. Banks of almost all countries of the world (except for the USA, North Macedonia and some others) act as depository institutions and, according to CRS standards, exchange financial information about clients' accounts with the tax authorities of the countries of their tax residence. Since a gold account is opened with a non-bank licensed institution, which is not considered a depository one, it is not subject to the CRS and the exchange of financial information between states is not carried out.
Moreover, gold is difficult to deprive. It is much easier for third parties to access real estate or bank accounts than gold. An illustrative example given by the expert is the history of seizures of houses and villas by squatters in Spain.
“The money in the bank account can be frozen by the decision of the bank, or take for example the ‘deposit clippings’ by Cypriot banks and the loss of deposited funds due to the liquidation of Latvian banks,” said the specialist.
At the same time, access to accounts with physical gold is difficult. The precious metal is fully insured against fire, flooding, burglary and mechanical damage.
Taxation of operations with gold and peculiarities of opening the accounts
Natalia notes that Swiss banks will not offer high interest rates on deposits, but will definitely deduct the tax. For example, for a deposit for three months in US dollars, the annual deposit rate is only 0.25%, in the Chinese yuan – 0.75%. A 35% tax is levied on the interest source income on a regular deposit. However, it does not apply to interest income from a fiduciary deposit.
At the same time, the mentioned 35% tax and VAT are not levied on income from operations with precious metals.
“Gold is a long-term investment, forget about interest income and quick earnings. In which country is it most profitable and safe to place this investment? Of course, in Switzerland,” the expert noted.
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In a Swiss non-bank institution, a non-resident of the country can open a metal account completely remotely.
“Why is the account called ‘metal’? Technically, one account is opened, and you can buy different precious metals like gold, silver and platinum in coins and bars and trade them. The minimum purchase amount is quite liberal for such an account – 50,000 Swiss francs,” explained the specialist.
According to her, an account in gold can be opened and forgotten about until a convenient moment, when it’s time to start trading at the moment it is profitable, for example, if the price of the desired precious metal falls or rises.
“You can make your first purchase in a month, three months or even a year after opening an account, and no one will close your account due to inactivity for such a long time. This is a rather interesting option – the flexibility of using the account. Banks, for example, do not like inactive accounts and quickly close them,” noted Natalia.
An account in precious metals can be opened for a company, trust, in your own name or jointly with your spouse, inherited or simply kept in reserve.
Price on gold: are we waiting for a new high or will 2021 be relatively stable?
From August 3 to August 7, 2020, the price on this metal increased from $1976 to $2035 per ounce. During this period, the maximum exchange price for gold in the entire history of trading was set – $2069 per 1 ounce.
So far, Natalia does not give accurate predictions about what the price of gold will be in 2021. At the same time, she focuses on the fact that a metal account in Switzerland can be acquired completely remotely and at any convenient time. It makes it possible to diversify and keep your savings not only in foreign currency or cryptocurrencies, but also in physical precious metal.
On September 14, Natalia will speak at the open lecture zone at Ukrainian Gaming Week 2021 with a presentation “Overview of non-resident fiat and crypto accounts for gambling market participants”. The speaker will list trends in the storage of funds overseas, as well as talk about the possibilities and advantages of remote opening of non-resident accounts.