Why hold gold under a holding company

Why hold gold under a holding company
  • Written by
  • Huan Koh
  • Published on
  • Aug 11, 2023
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Why hold gold under a holding company

This article applies only to holding companies domiciled in Singapore. 

Generally, capital gains are not taxable in Singapore. These include;

  1. Gains from diversifying into assets such as gold and other precious metals for long-term investment purposes
  2. Gains on sales of fixed assets
  3. Gains on foreign exchange on capital transactions

Furthermore, corporate tax is exempted in Singapore for;

  1. Income arising from funds managed by a fund manager in singapore
  2. Income arising from asset securitisation transactions
  3. Income of a trust nature of which a beneficiary is appointed and entitled to
  4. Income of eligible family-owned investment holding company
  5. Income of gains or profits from disposal of ordinary shares regardless of investee country

This all means that Singapore does not impose capital gains tax and corporate tax from companies registered in Singapore who made;

  1. Capital gains from owning investment-grade (>99.5% purity) gold
  2. Capital gains from owning ordinary shares in gold mining companies
  3. Capital gains from assets managed by fund managers in Singapore
  4. Capital gains from selling fixed assets like machinery
  5. Income from securities created by asset-backed securitisation companies in Singapore

The above also means you should use a Singapore holding company to;

  1. Own investment-grade (>99.5% purity) gold bars
  2. Own ordinary shares in other gold mining or development companies
  3. Manage funds, stocks and shares wherever they are
  4. Buy and sell fixed assets like heavy machinery 
  5. Conduct asset securitisation activities (e.g asset-backed crypto)

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