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My wife is Sri Lankan and we have some cash assets there, but we both live in Australia.

Sri Lanka has restrictions on taking money out of the country - essentially it looks like you can only take $US10000 each time you leave the country, unless you get special dispensation.

And even then, it looks like the buy/sell spread on LKR is quite big.

We're basically looking at investing in some kind of high-growth-but-not-stock-picking strategy - ie. an index fund.

The idea is, we haven't decided where we will settle down yet, so we're a bit adverse to all savings to Australia off the bat, in case that we need to convert it again later anyway, but also - with the currency restrictions, we likely aren't able to convert all our currency straight away anyway.

There are term deposits available in Sri Lanka, currently paying ~13%p.a - but of course inflation is higher, so this rate is 2-4x inflation - which is comparable to term deposits in Australia.

There are some index funds in Sri Lanka, for example, this is one of the top results from Google. However locals have warned me that 'The stock market here doesn't work the way it does elsewhere' - but I'm not sure what that means.

Here are some specific questions:

  • What is the best way to take money out of Sri Lanka - also taking into account any taxes you might pay when bringing that money into the new country?
  • How risky are index funds in Sri Lanka?
  • How likely is the government to confiscate or restrict your Sri Lankan money - is there any examples of this happening in similar countries?
  • As a general rule - is currency conversion something that should be put off until later (ie. grow your savings before the fee is applied) or is this basically the same thing.
  • As a general risk-vs-reward calculus do developing countries have more-or-less the same ratio as developed countries - or are developing countries inherrently more risky, with the same reward?

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