I guess the answer is that you cannot do it with a high enough volume to make a consistent profit out of it.

I'll share my experience for what is worth:

I did some arbitrage at some point between Brazil and UK. Prices in Brazil were some 10% higher than the UK's at the time so I took a shot. I had bank accounts in HSBC in both London and Sao Paulo, making it easy to send money back and forth through Internet Banking.

The results were ok, and it was fun but not worth the hassle. There are limits to the amount of money one can send back and forth (Brazil has very strict rules, and at some point you need to register with the Central Bank of Brazil to explain all the money you are sending out, I imagine this could be easier in other countries - come to think of it this is probably the reason why brazilian BTC prices have such high premiums).

Here's an example operation I did, it took me about 6 hours to complete: - Rates at the time were: GBP/BRL = 3.89 BTC/GBP = 703.68 BTC/BRL = 3,027.52 [ this is a theoretical arbitrage opportunity of around 10% ] - Sent BRL 5.000,00 from Brazil - Got GBP 1,232.00 in London (lost GBP 53.45 in currency spread) - Had to pay BRL 19.00 in IOF tax (brazilian financial operation taxes) - Bought 1.7508 BTC in London - Send the BTC to a Brazilian Exchange - Sold it for BRL 5.150.47 - Send the BRL 5,000 amount back to my bank account - After paying the bitcoin exchange trading and withdrawal fees my remaining BTC balance was 0.05948132 (my profit)

So from a theoretical arbitrage opportunity of 10.04%: - I made 2.71% - My bank got 4.15% - My government got 0.38% - My Bitcoin Exchange got 2.8%

(at the time bitcoin exchange fees in Brazil were quite high, they have since lowered)