Investing abroad can bring lots of benefits to a trader, not least because it means diversity for the portfolio and a chance to break into markets that haven’t yet been fully tapped. However, there are also downsides: the regulatory environment in some places makes it next to impossible for an international trader used to the relatively nimble frameworks of Britain to break through, for example, while other markets may have tempting returns on offer only for them to face a wipeout risk through currency fluctuations. With this in mind, here are three appealing yet tough international markets for brave investors to consider.

India: regulation 

India is considered a strong emerging market, and investors looking to place their cash there are often attracted by its technology sector and its engineering prowess. However, it’s also highly regulated, and this can make it hard to break into. One study carried out by a Hong Kong risk consultancy firm found that India scored 9.16 points out of 10 in an overregulation comparison – and reports suggest that heavy-handed regulating is happening particularly often in investment-heavy sectors, such as fintech.

China: currency risk 

Buying Chinese shares is tricky at the best of times, but for many British, American and other Western investors, the risk is more currency-focused in nature. The currency, known as the yuan, is linked to the performance of the US dollar – but it is also managed by the state, and rises in value are often at the mercy of political whims rather than free market forces. China also has a large manufacturing export industry, and this means that the value of the currency can alter based on international affairs. The recent tariffs imposed by the US, for example, have sent the value of the yuan down, which could in turn be impacting the profits of Western investors there.

Europe: volatility

The problem for Europe isn’t one of the issues that typically affects the other economies that are considered hard markets: it’s got a skilled labour force, for example, and it isn’t massively overregulated in the way that others are. It also has a good transport infrastructure, which means that many of the costs of an investment can be lower.

However, it’s often plagued with uncertainty. With Brexit on the horizon and all the problems that this entails, it’s looking increasingly unlikely that there’ll be any settling down in the European markets soon. Currency issues also rear their ugly heads here: the euro has not performed so well against the dollar in recent times, for example, while the pound has also been hit by political developments in Britain. For all its benefits in terms of infrastructure and skills, then, investors looking to Europe will still face challenges.

Investing abroad is the sort of task that can pay rewards if done correctly – but it can also grind an investor down. From the currency risks in places such as China to the ongoing volatility that an uncertain European market is experiencing, even the largest economies and trading blocs in the world aren’t immune from trouble.

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