#514 – The Expat Files: Navigating Crime, Culture, and Commerce in Latin America

Automatically transcribed from the original recording; names and wording may contain errors.

[00:00] South of the border, down Mexico way That's where I fell in love when the stars above came up to play and now as I wander Hello there all you expat wannabes I'm Johnny Mueller and you're listening to the expat files living in Latin America The show that tells you just what it's like to live work play and or retire down here in Latin America It's a mix of the good the bad the ugly and the great and it's all right here. So let's get started Okay, now here's something that'll piss you off what with all the crime and corruption Especially in certain parts of all big cities in Latin America. Wait a minute. Where do you live sound familiar? Down here south of the border. Anyway, knowing the cops are useless fat ass slugs sooner or later

[00:49] You realize crime pays now if you look at all the crime solving statistics throughout Latin America Just pick any country. Let's say Peru and now we're looking at government statistics printed in local Latin newspapers Did you know that last year only about eight percent of all homicides were solved in Peru? That means if you're shot and killed someone or poisoned them or pushed them out of a plane You got a ninety two percent chance of getting away with it. So then how about violent crimes in Peru? Cases solved there a five percent success rate robberies and assaults eight percent Well, that means just two things, you know Crime pays and we know that it does up in the states too, especially when big companies defense contractors and your government is involved

[01:34] Anyway south of the border what you can glean from those statistics are police law enforcement and a judicial system are Absolutely useless and that means down here if you're somehow on the receiving end of a crime You can bet it's not gonna be solved not by local law enforcement Anyway, even though stupid idiot first-world do-good governments have donated all kinds of law enforcement technology crime wagons CSI labs Sophisticated camera systems polygraph machines. It's all your wasted taxpayer dollars in the crapper when they send that stuff down here I mean some years ago when I was spending quite a bit of time in Honduras every single day I drive past a government parking lot where there were five donated brand new fire trucks Never used baking in the Sun in the very same place with weeds growing around him

[02:24] Forget this over three years then a year or so went by and I hadn't been in that area and when I popped back through Again, I saw those same fire trucks there this time that fire engine red paint now doll and covered in bird crap a few windows Broken and some tires gone missing now. I ask you. What do you think a brand new fire truck costs? A hundred hundred fifty two hundred grand now. I'm not talking hooking ladders here. I'm just talking about you know your standard pumper I'm guessing there was a million dollars worth of idiot first-world donations sitting there just rotten away Why because the bureaucratic fools in charge of donating such gifts rebel in the momentary feel-good flush of Donating to a poor underprivileged third world country then after all the photo ops It's out of sight out of mind. Rarely is there any advanced training or maintenance budget provided either, but I digress

[03:16] Where was I? Oh, yeah So the point is if you think you've been wrong down here and you're gonna go to court and sort it out somehow Just note the wheels of justice or injustice However, you want to phrase it roll very slowly and often they just simply freeze up So then what will gringos and expats do to stay out of trouble and harm's way? Well number one stick to the neighborhoods and zones and districts that are safe Every big city has a lot of those safe zones for every big so-called dangerous Latin city At least half or more of the physical area is fine to drive or walk around it We're talking about in the daytime now and when it's dark Well, who wants to walk around in any big city for any length of time at night in the first or third world Unless you're in a very high-end first world style district, and there's a lot of those down here, too

[04:03] Now I've mentioned these zones in past shows. They're called the Zona Viva or the Zona Rosa You'll almost always find them in the high-end business districts where first world hotels and upscale restaurants and discos are found That's why for example if you land at the airport near a big Latin city And you say to the cab driver take me to the Zona Rosa or Zona Viva He'll know exactly where to take you and you'll end up in an area That's usually pretty high-end and you'll recognize a lot of the names of the hotels and stores because they're Imported first world franchises most likely if you're just getting in that's where your first hotel will be located, too Unless of course you're a low-budget Backpacker and in that case you'll probably be heading in the opposite direction So good luck with that Just remember as it turns out in the rest of the world, too

[04:51] How safe and secure you are depends a lot on where you choose to hang out and or live which is why so many first world Gringos end up living in guarded gated communities where there are other people who are at least upper middle-class latin style That would be middle-class gringo style That's why I also don't recommend expats and gringos set up housekeeping or live or buy in what are considered middle-class latin neighborhoods or districts What latin's call middle class to us is more like white trash carnival up in the states So it's best to learn that distinction early. Hey, I'm just telling it like it is That's what they call middle-class down here I mean, it's true in a Latin person's mind anyone down here in Latin America that has a new car or has whole house

[05:36] Hot water, you know where you have a hot in a cold faucet in each sink that actually function correctly some of the time They're considered upper middle-class or even rich So a latin's definition of middle-class upper middle-class and wealthy are quite different than ours In fact when you're talking off the gringo tourist trail Any Latin guy or gal who makes a thousand dollars a month or more is considered upper middle-class That would be dire cat food eating dumpster diving poverty if for anyone up in the first world, right? But just remember a guy making a thousand dollars a month or slightly more down here is paying probably no health insurance He'll be paying no car insurance premiums for that 10 or 15 year old car. He doesn't have a dishwasher He doesn't have a clothes dryer. He doesn't have air conditioning or any kind of furnace or heating in the house either and remember too

[06:26] He's probably paying about a quarter to a fifth of your food bill up in the first world That's why latin's who make a thousand bucks or more a month are counting their blessings Think of your own situation up north if you could suddenly subtract those payments No AC or central heating bills no car or health or homeowners insurance to pay for then cut that food bill down by four or five times and tell me how much would you be spending on your lifestyle probably more than a thousand a month especially if you like designer Labels Starbucks and the occasional umbrella drink, but you get the idea now. Where was I? Oh, yeah, talking about crime and cops and law enforcement now Unfortunately because everyone knows down here if you call the cops almost nothing happens sure They might show up a half hour hour two later. Maybe even a day later

[07:13] They'll take the information down tell you they'll get on it right away and ask you to spot them a couple gallons of gas So if someone breaks your window and steals your stereo and your iPhone good luck with that again crimes like that will not happen in a guarded gated community or even if you have a place out in the boonies as long as You've got a nice fence and maybe a big howling dog or two anyway Just recently certain corrupt lard ass latin governments have started to write some anti-crime legislation And here's their latest moronic idea get this attacks on individuals and businesses to finance public security Hmm wait a minute hasn't that always been job one for government public safety and security

[07:58] I don't get it So they want to gouge businesses and taxpayers because their law enforcement efforts are such pathetic failures So then along that line, let's talk about the little country of El Salvador Central America Their Congress just passed a law taxing all companies and individuals with net earnings over $500,000 a year the new law states five percent of all earnings over a half a million a year will go into a public service security fund Let me translate to English the name of this new law. It's called law of large taxpayers Special contribution to the public security plan. Let me translate some more of this It says this new security plan will be implemented relating to governance prevention of crime and preservation of public order

[08:46] Now this law which was passed on October 29th 2016 says the excess contributions will be incurred only by taxpayers who earn a net profit equal to or greater than $500,000 a year and for the calculation of the tax. There'll be a rate of five percent applied on the total above that amount Now with El Salvador being the very first country to pass such a law other Latin countries are salivating at the thought of Implementing such a measure themselves. So then how might this affect expat gringos? Well, I'd say it probably will only affect one and maybe a hundred even two hundred expat gringos Only the very highest of earners now when I've spoken to a few of my expat friends that just might fall in that category All they do is laugh to them. That new law is just a joke. Why?

[09:35] Because these gringo expats learn to use SA corporations often more than one SA corporations in Various Latin countries to shift and hide profits when necessary to be in the absolute lowest tax bracket So as one of these high earning expats explained he said johnny None of us guys who are really in that bracket show a personal income over get this 20 or 25,000 bucks a year All the best of it. Well, like he says you just shuffle receipts around between SA corporations That's what they're for. And the real trick He says is that no Latin country requires you to report outside income for tax purposes Not like the US where all sources of income from anywhere must be reported as for doing business in Latin America

[10:22] If you can arrange it so that your income is coming from an SA corporation in a country outside the one you're doing business in well It's not reportable and you pay no tax on it Now one of these gringo friends even said if you or your company is stupid enough to report over a half a million dollars in Net earnings a year. You're an idiot and you deserve to pay that tax Then he said who do those political numb nuts think they're fooling after decades of corruption They're gonna do something honorable for a change use the money for its stated purpose Nope, the Hydra will just grow another head and they'll hire another battalion of lazy malignant bureaucrats Bottom line don't get paranoid. Don't let it worry you you're not gonna get hit with that tax By the way, most expat gringos who do work ones that aren't on pensions or Social Security have internet businesses or businesses off the books

[11:13] So they generally pay little or no taxes at all. So why worry? Oh, and by the way as expat Eddie said if a gringo down here is making 500,000 bucks a year or more He doesn't need government law enforcement at all. He can hire his own army. That's what the narcos do Okay, changing gears a little bit here. I am but still getting emails from you guys about fluoride Latin America Some of you have heard that certain big Latin American cities are considering fluoridating their water Well, you're a little late with that news because Buenos Aires Argentina tried it just recently but closed the program down It was a test a pilot program that crashed and burned. So how'd that happen? Their so-called expert water treatment technicians could simply not maintain the so-called safe

[11:59] Recommended level of fluoride in the water at one part per million In fact when fluoride concentrations were measured day over day, they were all over the place So they had to discontinue the fluoride project and you gotta admire him for that a government project that didn't work And they actually shut it down since when does that happen up in the first world, huh? now, of course, I assume that most all you listeners out there know of the dangers of fluoride and That the Nazis even used it to dumb down prisoners in concentration camps It made a more docile and shaved off a few IQ points then after the war they migrated to the US and ran for Congress Just kidding. Well, not really now. Fluoride is a toxic beast and amongst all the other problems they have with it It's very hard to keep that recommended one part per million level in drinking water

[12:48] Turns out the government line is at one part per million. It's supposed to protect your teeth though Most non-government researchers disagree with that now at not much more than one part per million in the water supply It causes brittle bones and dental fluorosis which turns your teeth grayish black sexy, huh So anyway brilliant Argentine water chemists can't seem to keep fluoride in the proper range in the drinking water Not that there's any real safe fluoride range, but that's another subject. Anyway in Argentina They pulled a pilot plan, which is good news Meaning if chemists can't do it in Argentina, which is one of the more advanced Latin countries The other less developed Latin countries certainly won't be able to pull it off. Good news, right? Well, not so fast

[13:34] Guess what? I know I mentioned part of what I'm gonna tell you now in a show quite a few months ago But there's an update and more to add now Unfortunately in virtually every Latin American country when you buy salt table salt you got fluoride included in the package It says right on it contains Yoda, which is iodine and fluoride in fact the other day I was in a big grocery store and I couldn't find any salt at all that didn't have fluoride in it How's that? So I headed over to the specialty food section in Walmart and bought some unadulterated Mediterranean sea salt. Yep, you can get that stuff down here. It's not that expensive maybe three bucks for a pound Okay problem solved if you're a gringo or expat who doesn't believe in fluoridation in any way

[14:23] However, that means if you're invited to dinner at somebody's house or you're out to a restaurant You're getting bombarded with fluoridated salt with every nacho taco burrito or happy meal When by the way, there are two iron clad Latin culinary rules that every chef down here clings to number one Douse everything with hot sauce and chili peppers and some doctors are saying that can be a very good thing for your health That is if you don't mind waking up at 3 in the morning with dancing hemorrhoids number two It seems like every Latin cook and chef over salts everything and I mean everything I've watched Latins put salt on mangoes melons apples even in lemonade and Not just a little now I personally never been to a restaurant in Latin America where I didn't need a half a gallon of water about a half hour

[15:14] After I've eaten not to cool the hot peppers off either Of course, that means you're getting doused with fluoride because you know Latin cooks and chefs certainly aren't using Mediterranean sea salt now if you don't go out to eat too much You probably won't get slow and stupid and suddenly get the urge to campaign for political office However, for all you listeners who are gonna bring babies down or perhaps start a family down here Or if you're into dairy products in a big way yourself Then you should pay attention to this Turns out in most Latin countries you go into the milk and dairy products section of your local grocery store If you read the labels, they'll be in Spanish. They're actually putting fluoride in dairy products Who's fucked up idea was that they have to be following some kind of stupid UN guideline or World Health Organization?

[16:03] Mandate you can't make this stuff up. They're the ones that insist on 65 plus Vaccination cocktails for every young toddler in the first world. So parents, how's that working out for you? How many rain men have you got at your neighborhood public school? So then what can gringos and expats do about that? Well, if you really must have your dairy products You could stop buying them at Walmart or the big Latin chain store supermarkets Instead you could head out to some of the medium and large-sized food markets where farmers bring their own dairy products in daily In fact, there's a lot of ways around buying processed and tainted dairy products I mean tainted with fluoride etc down here There are countless thousands if not millions of small-time farmers They're in no way endangered or extinct like they are up in the States

[16:50] And they sell their very fresh products daily at local tandas and mom-and-pop grocery stores nearby Same thing goes for coffee and honey, too Which I mentioned on a previous show the fact is you can walk into almost any small mom-and-pop grocery store Especially ones out in the boonies or a little ways out of the city and you'll see a lot of homemade one-off products like coffee Honey and dairy products produced just within a few miles of that store Yep, as far as food goes in a lot of ways It's still like the 50s and 60s down here though. They do have Costco and Walmart, of course Oh, and by the way, people do ask on occasion. They say Johnny I noticed Costco and Walmart are all over the place down there Does that signal the imminent death of the mom-and-pop Tienda in a word? No, and why is that? Well, it's because of the transportation issue down here now

[17:39] You know 95% of the first world's adult population drive cars Whereas only about 10 to 15 percent of the Latin adult population drive cars So down here in Latin America, we've got 80 to 85 percent of the population who have no Transportation to go to the nearest Costco or Walmart, which could be 10 or 15 miles away But mom-and-pop stores, there's one on every corner and believe me They're not like your mom-and-pop stores up in the first world or what's left of mom-and-pop stores up there You'll find all kinds of familiar and oddball food and herbal concoctions some with funky handwritten labels on them You know since there's no FDA and government agencies breathing down your necks if you produce a local product That means if you have the urge to make some kind of organic

[18:26] Predigested jelly jam goo-goo or whatever local mom-and-pop stores Even some of the big ones just might stock it especially if you have a good presentation and you're a gringo So you will have a very nice presentation, right? Oh, and by the way, I've seen this too Clever gringos who make products like that often make their own little display stands Some even have little product pamphlets that are real attention grabbers heads and tails above anything else that's displayed in that store However, if you're going for a local market, you have to have that signage in Spanish, right? The fact is local stores love to have gringo products like that on display. It's that gringo advantage again, right? But remember I'm talking about off the gringo tourist trail now I think if you're living in Panama Costa Rica the novelty of that gringo effect is kind of wearing thin as a

[19:14] Costa Rican neighbor of mine once explained He said the problem is in my country there are way too many gringos with money and way too many costari senses without Okay changing gears again A lot of people send me emails saying Johnny you talk about opening up bank accounts and SA corporations in Central America and in a lot of the less developed South American countries like Peru Bolivia and Paraguay But what about opening up a bank account in a much more developed Latin country like for example, Argentina or Chile? Not to mention being that they're so far away from the mainland USA They're really well off the gringo tourist trail The fact is you just don't meet too many expat gringos who've ever been to Argentina or Chile So people ask why not Argentina or Chile

[20:00] When you look up the facts about them on the internet you have to come to the conclusion that they're safer more refined and the people more cultured Educated more first world than all the other Latin American countries combined that said you longtime listeners know why I don't recommend Argentina So then what about settling in as an expat and doing business in Chile? Well, first of all almost everything in Chile comes at a near first world price So let me start by saying gringos who've been in Chile for a while like a lot of things about the place But they do not like the banking Number one, it's impossible for foreigners to open an account there if they don't have a Chilean residency or an SA corporation So then what if you're a non-resident and you want to make an investment in the country you want to buy a place

[20:47] You want to invest in a business whatever? Well, first of all, that means you'll have to get a bank account, right? But if you don't have Chilean residency and would like to maintain a bank account to do some kind of investment I mean you're gonna have to transfer money, right? well, you can either do that through your Chilean lawyer or Walk into a bank with your lawyer and say you have a very large opening deposit to make let's say 50 or a hundred grand Oftentimes that approach will work and don't be surprised to receive a lot of conflicting information from bank to bank Regarding opening accounts for non-resident foreigners Which is why it's always recommended to do that through your lawyer or have your lawyer set up an SA corporation for you Then the SA corporation can open the bank account now as opposed to other Latin countries

[21:32] Having temporary residency in Chile does not automatically mean you can open a bank account However, if you drop a big chunk of dough in their lap, that's another thing altogether Now if you do get temporary residency, they will let you open an account called a Cuenta Vista Which is a small-time tiny little account They have a low limit on the deposits you can make and the maximum you can have in that account That means you can only use it to pay small household bills and utility bills and such Now these are more like past book bank accounts light You can't transfer down thousands of dollars into an account like that They just won't let you but it is a foot in the door. It's a start now in Chile Like most other Latin countries once you've got temporary residency It goes straight to permanent residency in a year or a year and a half

[22:18] Then you can go to any Chilean bank and open a regular account However, you're not gonna get those great US dollar bank CD rates that I spoke about on previous shows You might recall in many Latin banks. You could get three four five six even seven percent interest on US dollar CDs However, you can get those high interest rates if you open a premium brokerage account at one of those banks The problem is you see you have to provide proof of income from around four to eight thousand bucks a month to get one of those Accounts or load up the account with a minimum of let's say 400 grand. Yeah, I'm sure most of you've got 400 grand or so sitting around in a shoe box under your bed somewhere, right? Now one thing a lot of people don't realize is that if you own a property outright in Chile and many other Latin countries

[23:07] Banks will lend you money against your property Yes, the second even third mortgage businesses growing in leaps and bounds down here Whereas ten or so years ago second and third mortgages just did not exist Yep It's that first world lag time factor and soon when the real estate bubble blows those driveway chickens will come home to roost So bottom line if you don't want to wait a year or two or even more to get that permanent residency and start doing Some real banking you just do like so many expat gringos do and set up an SA corporation and that becomes your shell And it opens a bank account buys property, whatever then of course You could become an employee of your own SA corporation, too Which is an absolutely great way to minimize your taxes and provide many other great benefits that I really don't want to talk about

[23:54] Right now on the radio though. All of that is explained at my Latin insiders seminar The next one's coming up in January 2016. So just go to Www. The new expat comm click on the link that says Johnny's 2016 seminar Do consider coming on down and you will learn all the nuances of bank accounts SA corporations Residency passports renting buying building the ins and outs of health insurance doing business and much much more Not to mention there's something down here you'll get that you'll never get surfing the internet up north You'll instantly get a very friendly knowledgeable network of people you can lean on when you finally come down and make your move But where was I? Oh, yeah, as far as gringos expatting to Chile

[24:40] Most other Latin countries are much less restrictive meaning they're much more accommodating and welcoming to gringos now Speaking of gringos and expat foreigners with banking and brokerage accounts. Here's an email update from our Canadian friend Mr. PT who lives part-time in Mexico. He says hey, Johnny a quick update a few days ago My Canadian broker sent me an email asking me to update my information for tax purposes So I logged in on to the site expecting it to ask me for routine verifications of my personal information Which it did but then it sent me to a special US tax form remember now I'm a Canadian where I had to state that I was not a US citizen and had no dealings with the US

[25:27] And had to check a box allowing them to share my name and my address with US authorities If not, they said I may be subject to a withholding tax What the f I repeat I have no dealings with the US whatsoever You know, it's time to start thinking more seriously about one of those essay corporations, I guess So it seems to me like the long hairy hoary arm of the US authorities is reaching out even to Non-citizens which makes the information that you share Johnny even more important Keep updating us on all those good places to go south of the border since up north things are going all wrong Signed mr. PT. Okay, mr. PT. Thanks for that and PT stands for permanent traveler or perpetual tourists

[26:18] I like that. In fact, it goes back to the 1970s to a guy named William Hill a pseudonym, of course who wrote a book called PT the perpetual traveler remember that one guess I'm showing my age, huh? And you're right. Mr. PT Nothing is gonna change up north. In fact, it's only gonna get worse So you must consider expatting south of the border do get your residency going and that of course will lead to a passport And yes, get your essay corporation going too and you do need some very good trustworthy advice Which you'll definitely get if you come to my Latin insiders seminar in January We'll help you get your plan be going for sure. Okay now that we're getting close to the end of the show I'd like to mention once again. I've got a YouTube channel

[27:03] Just go to YouTube and plug in the expat files or expat files and you'll hear me along with a cool little slide show And again, do check out the new website run by mr. John Galt himself www.thenewexpat.com where you can check out some great blogs reports and our favorite Latin American attorney Who's there and at your service to fill you in on all the legalities that involve gringos and expats do check it out You'll be happy you did south of the border You've been listening to the expat files living in Latin America coming to you twice a week from somewhere south of the border Email me the expat files at gmail.com And if you want me to help you sort out your own Latin American plans schedule a one-on-one

[27:50] Consult with me just send an email and let me know at the expat files at gmail.com. No spamos