Buying Gold in Asia: Local Laws, Travel Restrictions and Best Places to Buy
Where is the best place in Asia to buy gold, what should I be buying and how much can or should I buy to avoid my investment being confiscated by customs? These are all the questions you’re likely asking; we’re here to answer them.
Whatever reason you have for wanting to buy gold, rare metals are likely the best investment you can make.
Different forms of Gold, how do I choose?
There is an abundance of types of gold to choose from when considering your investment, so which is right for you?
- Gold Coins – If you’re looking at starting out with an investment in gold, or for those looking for the solace of a tangible investment, gold coins are a good place to start. Gold coins can be procured from a variety of coin dealers, banks, online platforms and government mints. The markups on these coins vary, but the premiums are a small price to pay for the portability and liquidity of the bullion coins. Popular one-ounce coins include the Royal Mint Britannia, Australian Kangaroo, Austrian Philharmonic, etc. Collectible coins or numismatic coins are priced according to their collection value and depending on how rare they are, this can be significantly higher than the spot gold price.Gold coins from Sovereign mints are issued as legal tender. This has several advantages. You are purchasing gold which has a guaranteed weight and purity from the issuing government. Having a lower face value than the melt value can also have some tax advantages (more about this later on). It is considered a far more punishable offense if someone tries to fake a legal tender coin as opposed to a bar from a private mint, thus discouraging imposters. Gold coins are usually sold in very tradable weights and are the most liquid form of physical gold. Finding a buyer for a gold coin is going to be easier and faster than finding someone to buy a bar. Verifying the authenticity of a coin is easier for the person purchasing it from you as well.
- Gold Bars – Gold bars or bullion bars are sold per kilo, ounce and gram. The larger the bar, the lower the premium but less liquid. Small bars are more labor intensive and thus carry a higher premium. Most bars are produced by private mints, as opposed to government mints for coins and do not have a legal tender face value. The premium for bars is usually lower than for gold coins.
- Gold Certificates – If you’re worried about theft or storage but still inevitably drawn to investment in physical gold, you could consider gold certificates. Gold certificates allow investors to own gold without taking physical delivery. The physical gold is held by the institution who issues the certificates. While more convenient to purchase or hold, you still have to pay for fees related to storage and insurance. You also run the risk of taking on the issuing institution’s third-party liabilities.
Looking for more information on the type of products available? LPM’s wide range will give you up to date information about the variety of gold or silver available to you, and highlight its value and best pricing as well.
What are The Laws for traveling with Precious Metals on your person in Asia?
Unless you’re gung ho and intend on flying with a money belt and/or concealed compartments in your bag, you’re likely wondering what the restrictions are when traveling with gold or silver. How much are you allowed to carry in total value and is it considered legal currency where you’re traveling to?
The rules governing the personal transportation of precious metals across international borders are by no means consistent. The rules vary by country, for example, presently in the US, it is not illegal – except for special embargoes for countries like Sudan or Iran – to fly or travel with any quantity of precious metals on your person. Large sums of cash must nearly always be declared at international borders, as an example, in China, anything over $5000.00 USD has to be declared.
The two best countries for buying gold in Asia, in our opinion when considering all the research and comparing pros and cons, are Singapore and Hong Kong:
- Singapore – Only precious metals in the form of an ingot, wafer, bar or coin which meet certain criteria can qualify as Investment Precious Metals (IPM) in Singapore. Precious metal coins and the specific criteria that qualify as IPM are prescribed in the GST Act, for all the details you can refer to the IRAS e-Tax Guide. You will have to fill out an application for an exemption permit which you then have to declare at the red channel checkpoints upon arrival in Singapore. If you’re planning on bringing any cash to Singapore, you have to declare anything that exceeds SGD 30,000 (roughly $21,468.88 USD) or the equivalent thereof. The premiums in Singapore are reasonable but not as low as Hong Kong.
- Hong Kong – Dealers have some of the lowest bid/ask spreads on retail precious metals and it’s also an excellent place for storage options. You can buy investment grade gold coins in Hong Kong for just a few dollars over spot and can often sell items for more than spot. There are no taxes on either buying or the selling of gold and silver coins/bars for personal use in Hong Kong as well as no import duty. Hong Kong is a major global hub for precious metal sales and storage.
In contrast to HK and Singapore, China allows only 15 banks to import gold, including three foreign lenders. Any precious metal under 50 grams for personal use i.e. jewelry can be brought into China without having to be declared at customs, anything above that needs to be declared.
Legal Tender Face Value
Bullion coins from Sovereign mints will have a face value, e.g., The Royal Mint Britannia 1oz Gold coin is 100 Pounds. Generally, the face value of legal tender coins is an arbitrary figure, but there is an argument that these can be claimed on their face value as opposed to their value in gold. This can have some tax/customs clearance advantages, but this would fall into a legal gray area.
The general limit (at the time of writing this) is 10,000.00 USD/EUR/GBP. It is recommended that you don’t carry more than 10k in market value, or whatever the local declaration equivalent is. Large sums of cash or valuable items are likely to draw suspicion and inspection which can be easily avoided. If you have to travel with an amount more than this, declare it, this could save you a lot of hassles down the road.
There are no duties and taxes when you carry your own personal coins and bars across (some) international borders, as long as they are YOUR personal possessions like cash in your wallet, clothes, laptops, etc. Jewelry also doesn’t have to be declared if you wear it as your own, but you can’t exactly don 10kg of heavy gold chains like Mr. T in the A-Team, the metal detectors would go berzerk. Problems can arise if your items are deemed to be “imported goods” or anything of a commercial nature, and if this happens, you will fall under a different set of rules. For example, if you haven’t paid VAT on the goods somewhere else and flew into those countries that charge VAT i.e. most of the Eurozone, a local VAT charge might be applied.
If you intend to carry coins or bars personally, it is advised that you contact the relevant Customs and Border Protection Agency ahead of travel, inform them of your intentions and ask how you can go about it in a way that conforms to the law, even better if you can get this in an email. Rules vary from country to country and although we can give you a broad indication of what the rules look like we would encourage you to inquire directly from customs for the countries you are flying in and out of.
How Safe is it to Buy Gold Online?
There are thousand of forums, websites, and threads that tackle this very question, so I’ll take all that they have to say and simplify it for you:
Use your wits, if it looks too good to be true, then it is.
Go with sites that have verified and reliable partners
Speak to someone at the company, pick up the phone and give them a call. There’s no better way to check out a company than talking to a real person with experience to quickly determine the validity of a company.
Engage in a conversation online, ask questions on the sites’ forum or contact pages.
Check related social media pages for comments and reviews from other buyers.
Most of all look for a good track record, a good track record doesn’t lie so go ahead and Google the company.