<prompt> Human: I know other people have asked similar questions and the reasons given are normally loss through currency exchange rates and taxes on importing large amounts of money. However like I said in the title the primary currency for investment in Cambodia is USD and they have no taxes on money coming into the country for investment. So theoretically could I get a 1 million 3.5 p.a fixed term 3 year loan in the US and then invest that money into a fixed term high interest Cambodian account for 3 years at 7 p.a. This would result in a profit of 35,000 12,500 p.a for almost no work and very little risk. This is assuming Im a Cambodian resident alien which I am and a US citizen which Im not but my brother isNote: These figures and knowledge of Cambodian tax law come from some quick Google research so there may be errors. Im not too concerned about exact figures. More looking for proof of concept per se. Also Im probably not going to do this as I doubt Id be able to secure a million dollar loan at 23 with no collateral. But I was curious.Thank you personal finance.I have learnt that with great rates comes great risk and this is probably not a good idea. Not that I was going to do it in the first place as this was merely hypothetical. I sincerely appreciate all the well thought out responses that recognized this was not a carry trade because the currency remained the same over the investment period which was the crux of my question.Thanks again for the advice.  <response>: I originally wrote a long post about the carry trade but noticed you seemed to have covered yourself in terms of currency risk kind of. The central risk here is that developing countries loved to borrow in USD because it gives them access to lower interest rates. The problem is when times get tough, if the USD appreciates vs Riel, the bank will quite likely default. Their revenues and assets are in Riel, but their liability is in USD. No thank you, screw trying to keep up with an appreciating USD, Ill just default on my foreign debt and keep paying my local debt. I see that the riel is fixed to the USD, so in the short term you might be fine. So your biggest financial risk is a loss of faith in the central banks ability to maintain the peg. Dont think fixed pegs are always secure, just think of Mexico Thailand etc. It might interest you to look at the carry trade, specifically the AussieYen carry trade. EDIT: a lot of posters are saying OPs proposal is a carry trade. Technically, hes not. In his proposal, he has never exchanged USD to Riels and back to USD after the 3 year term. The USD hes gotten from the loan goes straight to a bank account in Cambodia, so he has a strong indirect exposure to currency, rather than direct. 