Process takes a long time and is clunky at best but it's a start.
It seems the sky has fallen, and Microsoft has finally bent to the reality that people do actually move from country to country.
The company is now accepting requests to have one’s region re-allocated from one supported country to another.
The process appears to be manual, and can take up to 6 weeks to complete, and the account is unavailable during the period. Also some content, especially Xbox Live games, may be lost during the process.
The solution, thought extremely clunky, is better than nothing, and hopefully once 1 billion people have Windows 8 PC’s with Microsoft Accounts built-in, Microsoft will stream-line it for the hundreds of thousands of people migrating each year.
Update 1: Microsoft is testing streamlined region porting for Xbox Live
Update 2: Online tool is out now: https://live.xbox.com/en-US/AccountMigration