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Paypal didn't sort this out. It's the same as for the App Store. Your account is bound to one given country and when you move to another country you are supposed to close the account and re-open another one. In addition, you can only link bank accounts to Paypal if they're in the same country as the Paypal account. Also, you can set your address in Paypal to a foreign country.

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so you are supposed to rebuy everything you bought on itunes?

and this is reasonable?

Nope - it's not. And for me also the Paypal behavior is broken, as I'm resident of multiple countries. Just wanted to point out that the above statement about Paypal was wrong.

For a positive example look at the Google Play Store: The apps that I bought in one country are available in any other country. The only exception are apps that aren't available in a given country. They don't disappear from my phone, but I can't update/reinstall them until I'm in a country where they are available

No, it's not reasonable from an end-user perspective. Certainly not. But attributing this restriction to malice aforethought is just ridiculous.

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