If you have a substantial amount of capital and you are considering moving your money abroad, you have to research which countries allow you to deposit money, but are difficult to take your money out of. Many governments create currency controls that inhibit the citizen’s abilities to take money outside the country without the government’s consent. Thus, it is imperative to understand this risk where you are investing so that your money does not get stuck in a jurisdiction that you will not be able to remove it from successfully later.
Here are the top three countries that are difficult to get your money both in and out of:
Currently, Venezuela is the front runner on currency controls. Venezuela currently has four exchange rates. One of those official exchange rates includes the black market that the government has been forced to accept since it cannot stop its operations due to the forceful currency controls that exist in Venezuela. In order for a citizen to get money out of Venezuela, they have to find a personal contact on the black market in order to buy and sell United States Dollars. Once they change their currency, they can take their United States Dollars outside of Venezuela and take them outside of their accounts in Venezuela. This is precisely both the citizens and foreign companies are pulling out of Venezuela because they are forced to attempt to protect their assets from the horrific exchange rate. One major example of a company that pulled out of Venezuela was American Airlines due to the currency devaluation and the impossibility of getting their profits outside of Venezuela.
Brazil is not a country that I would want to leave my assets in. The reason for this is their taxation laws. Brazil has a heavy tax on both imports and exports and a highly regulated economy in general. Thus, if I decided to open a business in Brazil, there would be many hurdles and bureaucratic red tape to cross before I could ever see my assets again. Additionally, Brazil has a great deal of corruption in their court systems, which would make it difficult for me to sue in international arbitration to recover my assets as well because the Brazilian system does not respect these rulings a great deal over the rulings of their own courts. Thus, I would highly advise against keeping assets in Brazil in the long term.
Nigeria has received a great deal of international attention due to its political corruption. Additionally, Nigeria also suffers from a great deal of economic corruption. One of the aspects of their economic corruption is related to currency and banking. The Nigerian currency is one of the most artificially valued currencies in the world and thus, if I had a company conducting transactions in Nigeria, I would likely get an account in South Africa before I would consider leaving my money in Nigeria due to the corruption and lack of respect for international monetary security regulations.
When considering where to keep your assets, it is important to be realistic with your expectations. If you are having second thoughts, then there is likely a reason. Usually, it is best to meet with an industry expert to see which countries are having highly government related currency controls to avoid foreign direct investment that could potentially result in having your capital stuck because if this does happen, you will have very little legal recourse to recover your assets in the long run.