#1444 – The Expat Files: Navigating Online Shopping, Customs, and Cultural Integration 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 out 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 Alright it's me, Johnny, here as usual You know, one of the biggest concerns for gringos and expats living down here in Latin America, these days at least Is the shipping and courier thing, you know Ordering stuff on Amazon, Ebay, Home Depot, your favorite online health food store

[00:50] You know what I'm talking about Yep, the cool thing is, wherever you happen to live in Latin America You're no longer restricted to buying stuff that's available at the local hardware store, etc That was always a big problem until maybe around 10 years ago now That's why way back when when you'd walk into a gringo expats house down here You'd see the very same model microwave oven in almost everybody's house Same brand name washing machine, TV, etc Not that we had any brand loyalty It's just that you buy what's available at the hardware store or appliance store And you buy it right now when you see it Or next week it just might not be there Or even next month That's why when online shopping first took hold in a big way down here in Latin America It was like winning the lottery, we could hardly believe it

[01:37] Gringos and expats were the very first to jump on it Before that we had to wait for someone to go back and forth to the States and put in our order And of course early on and even now in some cases we paid dearly for shipping But you do get exactly what you want Do note that, you know, there are 20 different Latin American countries And hundreds of different courier services And as far as the different couriers and package and mail forwarding services and the prices they charge It's not at all a level playing field In other words, let's say you order a mini laptop computer from Amazon Amazon price, 200 bucks Well, in Guatemala, if you order anything that's $200 a let You don't pay any import taxes to the government It doesn't get stuck in the Adwana You've heard that word Adwana, right? That's the asshole tax department in any Latin American country

[02:24] The Adwana By the way, if you live down here and you happen to read and write Spanish You'll notice quite frequently there are op-ed articles Showing up in local Spanish media and press, etc In every Latin country saying their customs division, the Adwana Is the most corrupt of all government departments That seems to be a universal law It's the one government department everyone wishes they could work at It's no wonder that nearly all bureaucrats that work in middle or high level jobs in the Adwana In the custom bureaus, they live way beyond their pay grade Isn't that funny? I wonder how that happens Yep, they live a life that's far removed from other mid-level bureaucrats Funny how most all unclaimed merchandise ends up in the homes of Adwana officials

[03:11] Or family or friends Of course, they're not supposed to be able to keep that stuff They're supposed to be a general auction yearly of unclaimed stuff at the Adwana But that almost never comes off, or at least it's never publicized So when there is an auction, the general public doesn't know about it so they don't show But Adwana workers and their families and friends show up And they lowball the hell out of the stuff You know, wink wink, nudge nudge Now you might think, who would order something from Amazon, eBay, Target, Home Depot, whatever And fail to claim it Well, saying that some people fail to claim something they've ordered is more of a misnomer Unclaimed merchandise sounds a hell of a lot better than what's really going on In fact, in a past show, I mentioned how it happened to me I ordered a TV from Amazon, it was $189

[03:59] It was a one day surprise sale, normal price around $400 I figured, great, I'll order that thing and I won't have to pay customs fees Because it's under the $200 limit By the way, general customs fees depend on what kind of product you order But it's generally between 10 and 30% of the purchase price Of course, all customs offices have a list of the import taxes Based on the types of products Whether it's clothes, tools, appliances, perfumes, electronics, etc, etc You'll see that list on their website, but you can't always go buy that Because often times it depends on who's reviewing your item So, for example, if the customs official is having a bad day And he's reviewing some of the items you had shipped in I guarantee when you see what charges he's assigned to your stuff

[04:46] You're going to have a bad day too That's exactly what happened to me when I ordered that TV So anyway, I ordered the TV, it came through Amazon I received the usual email from my courier saying The product had arrived and what I had to pay for shipping Which I'd figured already You calculate those things before you order stuff from Amazon Or any place online to make sure you're not going to get killed on the shipping charges For example, it would not be a good idea to order a sofa or a freezer Or a backyard barbecue setup You're way better off buying that stuff down here That kind of stuff just weighs too damn much You'll get killed on the shipping charges My advice, look around at the local hardware and appliance stores You're better off buying it down here It might not be exactly what you want Because sometimes the selection down here is pretty thin

[05:32] In the end, it'll be much cheaper than ordering an ensemble sofa set from Target Shipping weight, 150 pounds, had 4 bucks a pound, think of it The shipping itself would cost you as much or more than the item And we haven't even mentioned the import taxes yet, the Adwana Anyway, the TV arrived, I was notified by my courier company They had to pay 50 bucks in shipping The notification also said I had to pay 150 dollar Adwana charge Import taxes That was a shock, I thought, that must be a mistake I thought, wait a minute, how could that be? It's under 200 bucks There's not supposed to be an Adwana charge That's why I bought that thing when the one day sale popped up I bought it on impulse because I knew I wouldn't have to pay the tax Or so I thought Well, apparently the dickhead Adwana agent reviewing the case Didn't like that it was on sale

[06:19] He valued it at 400 bucks, the original price So, bottom line, to get that thing out of customs would have cost me 200 bucks 150 for the Adwana and 50 bucks for shipping I was so pissed off I just never went down to pick it up Thus, it became labeled as unclaimed merchandise That means every night some fat ass Adwana slug Is sucking down beers and tortillas in his cockroach infested dump watching my TV Now, you might wonder Doesn't the courier company get pissed off at you if you don't claim it? After all, they ship it down from Miami on their dime Well, I was waiting for some blowback, but they never said anything to me In fact, they sympathized with me when I explained about the 400 dollar regular price And the 189 dollar one day sale

[07:05] Then, the lady at my package forwarding service, my courier company Made a few phone calls down to the Adwana, at least she said she did But in the end, just shrugged her shoulders and said they usually don't budge Happens a lot Which confirms my previous statement There are lots of nice expensive products people order from the States That people just never pick up, more or less abandoned I know many gringos who've been in shock when they got the final tally Then, just walked away Anyway, as mentioned when I first started this rant With people in all 20 Latin American countries Ordering things from eBay and Amazon, etc There are really no standard fees you can count on It's not a level playing field For example, the other day I got an email from a gringo expat in Colombia

[07:50] He's all pissed off about the Colombian Taxation Authority, the D.I.A.N They're Adwana, they're customs Since he likes to order stuff from eBay, Home Depot, Amazon, etc. too Let me highlight some of the points he makes in this email So you can get a better idea of what he's talking about It just might be another reason why you don't want to have your plan be in Colombia And if you do, you just might not want to shop on Amazon Or any of the online stores and have your stuff shipped out After you hear this story, well, listen up This comes from Manolo, he says Johnny, I want to share a problem that many people living in Colombia face When importing goods through a courier service The issue shows how our customs system in Colombia Managed by Colombia's Taxation Authority, D.I.A.N

[08:37] Creates a hugely unfair burden On ordinary citizens and people living in Colombia Including gringos and expats He says, I'm a freelance professional photographer And use Japanese cameras and lenses Colombia does not make such equipment And sellers and resellers here have outrageous prices Twice or more what the retail prices are in the U.S. Therefore, I have no other option but to import my camera gear He says, last month I bought a camera lens online From a U.S. supplier for $500 And paid $53 for DHL shipping from Miami to Colombia I don't know if you know this, Johnny But Colombia's law clearly states that any item worth less than $200 Is exempt from customs duties All right, all right, just a second

[09:25] Manolo, Manolo, you're preaching to the choir Same thing goes for many Latin countries Guatemala, Salvador, Dominican Republic, etc, etc You get a $200 tax exemption At least you're supposed to But like I said, it's not the same across the board I believe in Ecuador, it's $400 Anyway, he goes on to say Anything worth less than $200 that's shipped in is exempt This makes sense It helps small importers and regular people Who buy personal items online For their personal use Avoid Adwana charges But the system is really unfair and unequal And sometimes goes off the rails It's hit and miss For example Suppose I ordered some photographic equipment And the amount was $250 Well, he says instead of applying the customs duties Only to the amount above $200, that $50

[10:12] The DIAN Adwana charges Custom fees on the full value Plus the shipping costs Yes, that's right They nail you with Adwana charges On the shipping costs As well as the cost of the item He says I bought some equipment online in the States For $553 US dollars The Adwana charged me 10% on the whole amount Not $553 minus $200 They didn't exempt the first $200 They didn't exempt anything They charged 10% on the whole amount $55.30 But it doesn't end there, not nearly They also charged me 19% VAT That's EVA tax On the whole amount, including shipping

[10:59] Think about it, Johnny Shipping is an ethereal item It's not actually something you put your hands on It's a service Not an item But it doesn't end there Of course, I have to pay my courier service For the shipping In which case, because it was a small, light item Only about 4 pounds Cost around $30 US But it doesn't end there The government then charged me, EVA The VAT tax On the shipping and cargo charges too 19% of the $30 shipping charge I just mentioned About 6 bucks Oddly enough, Johnny Those additional fees and calculations Bring the total excess charges To 40% of the total cost of the item So my $500 lens turned into an $800 plus

[11:46] Purchase So when you're hit with 6 different charges On a single purchase Some obvious questions will arise 1. Should there be an IVA Or VAT charge levied On the custom charge itself? Note, I'm not buying my lens From Colombian customs I'm buying it from a place up in the States 2. What the hell is the handling fee for? Isn't that covered In the basic Adwana customs charges? Why is that built as an extra? So you might think that The Colombian Adwana system Panelizes importers on purpose Believing perhaps if they text you hard enough And add on enough charges Some Colombian companies Bound to start producing a similar product

[12:31] In other words, a thriving industry Will pop up at home Well, I'm sorry, Johnny That theory doesn't hold water Colombia has no tradition Of making precision lenses Or practically anything precision at all Nope, if you ask anyone who imports anything They'll tell you that The Colombian customs service Is just another way to gouge the public Of course, you can't fight City Hall There's no way to change that Except there is that sticky problem That customs likes to ignore That $200 exemption If the law says Items that are $200 are exempt From Adwana duties Logic tells you that For items over $200 Say, for example, an item costs $201 Suddenly, you have to pay the full duty But if it was $199 You pay nothing

[13:16] This unjustly creates a massive jump In the cost for items Just over that threshold of $200 Like having an unfair income tax system Where earning $1 more than you did last year Pushes you into a tax bracket That leaves you poorer than the year before A bizarro world indeed Then he says Most other countries With minimum thresholds Apply them correctly In the United States, for example Items are exempt from import duties Up to $800 And the duties apply only to amounts Above that threshold For example, using my case If someone imported a $553 US dollar item To a country with a $200 exemption Like Colombia They would calculate duties only on the excess

[14:01] $353 US dollars Not the full $553 This makes the exemption meaningful And creates fair treatment across different purchase values But whoever said government was fair or illogical He says I've talked to many of my professional friends In different businesses here in Colombia They all face the same problem And don't know what to do about it For example, I have doctor friends Who buy essential medical equipment Education materials and work tools Including IT equipment None of which is made in Colombia So they face unexpected costs all the time That often double their purchase price Where Shetty says In the current Colombian Adwana system A $200 US dollar exemption Is essentially worthless for most imports

[14:48] I can vouch for the fact that Just the courier shipping and handling costs Almost always average between $30 and $60 Which pushes most items over the threshold Because remember The Colombia Adwana import tax service Will determine if you get that $200 tax exemption Based not just on the purchase price Which is the fair thing to do But on the combined cost of the item And the shipping and handling costs too But the Colombian DIAN The Adwana service Decide on their own how to interpret that law Which makes this exemption almost meaningless My question Johny is How come other latin countries Manage to implement a fair Predictable and consistent import taxes And the Colombians Just can't seem to get it right

[15:34] By the way Johny did you know that Colombian Deputados Senators and representatives Are exempt From import duties and exempt From taxes on their automobile purchases too Signed Manolo in Medellin, Colombia Hmm Thanks for that Manny By the way that's one thing all politicians have in common Just like in Colombia A U.S. congressman have certain unfair exemptions too Like for example they're exempt From prosecution for insider trading That's why pathetic wrinkled old pus bags Like Nancy Pelosi Do better than even the best Of professional stock pickers Yep in the United States Shitbag politicians are exempt From insider trading laws

[16:19] And down here in Latin America Senators, governors, representatives They're called deputados English translation deputy They're exempt from Adwana import taxes and EVA That VAT tax Which in some Latin countries is 20% Anyway just fill in the blanks for you Alright moving on I mentioned in a previous show That I like to look at lots of different Latino news services in Spanish In doing so I run across many Very interesting items that never Seem to see the light of day In the U.S. media Maybe it's because they were Originally published in Spanish And nobody cares Who knows? In fact right now this very minute I'm looking at the website of One of Columbia's biggest financial News services

[17:05] It's sort of the Wall Street Journal of Columbia I know I know they highly exaggerate things They think it is Anyway I'm looking at the classifieds In the job want ads right now And there's a whole big column Entitled Bilingual and remote job offers So for all you guys and gals out there Are you going to be some wannabes? Who are thinking with your plan B To come down and get a job down here I mean there's lots of multinational corporations Here in Latin America They're everywhere So you'd think they'd hire a gringo expat If he's qualified right? I mean really if up in the states You were a successful business person You got a huge head start over the competition Down here Most likely whatever job opportunities They're advertising in the media Down here you're overqualified And you know that's a question people ask me

[17:51] All the time For a big transnational like Siemens or Honda BMW, Mercedes, Nestles, Procter & Gamble I mean they've all got plants and branches down here And like any big corporation They're looking for qualified people all the time And in the media services They're advertising for qualified people all the time Well I can tell you now Why that's probably not going to work for you Fat chance even if you're overqualified You'll ever get hired That is Unless you are a hundred percent bilingual Maybe you are But I think only maybe one in a hundred Expat gringos are fully bilingual With all the certifications and such Hey look at me I've been down here Over 30 years And I'm not fully bilingual After all those years I can certainly speak Spanish fairly well

[18:39] With a certain amount of tense and grammatical errors But I read and write Spanish Like a 12 year old So then might I be qualified enough To get a job at a transnational Down here in Latin America? Probably not Now remember Right now I'm looking at One of the top Colombian finance websites And they've got a listing of job openings Let me go down the first ten on this list Number one The first job listing says Multifamily real estate leasing associate Must be 100% bilingual Number two Law office receptionist Must be 100% bilingual Number three Business development representative Must be 100% bilingual Number four Call center supervisor and rep Must be 100% bilingual

[19:26] Number five Chiropractic office manager Must be 100% bilingual Number six Laboratory clinical supervisor Must be 100% bilingual Chemical engineer must be 100% bilingual And on and on Et cetera, et cetera Now I'm not trying to dash your hopes If you're looking to get A nice solid professional job You know, working for the man Down here in Latin America Problem is, it's very unlikely That will happen unless you're 100% bilingual That's what multinational companies Here in Latin America want That's who they're looking for And by the way, if you do fit the bill You are bilingual And you do snag a job like that You most definitely will make About one half of what you might make In the same position up in the states Remember those stats I gave you

[20:11] In a couple of past shows Was that the average doctor The average MD Down here in Latin America Makes ten to twenty thousand bucks a year And new docs fresh out of school Much less By the way, if you get a chance When you're at a party or get together To sit around with a bunch of Young professional Latinos College educated Latinos Not bank tellers or Uber drivers I'm talking about Latinos With at least a bachelor's degree Anyway, if you're in that situation Here's a fun thing to do Now the thing is, if you don't know A lot of Spanish A lot of times you'll be sitting around Twiddling your thumbs And they'll all be gabbing And you won't catch half of it Though they think you do If you smile And nod a lot Acting as if you're paying attention No one will be the wiser But you know, Lots of gringos and expats In time Do learn quite a bit of Spanish

[20:58] And still, when you're at a party Or get together Sitting around with a bunch of Latinos You'll feel like the odd man out And really, you are Even though you're living in Latin America You're really not integrated into the culture The question is, how does a gringo or expat Break the ice at a party like that If you know a little Spanish How can you easily inject yourself into the conversation? Well, here's an ice breaker for you I've used it myself a number of times You pose a question to the group A real head scratcher For example, here's a good one You say, listen everyone I have a question for you Of course you're speaking in Spanish now Remember I said, suppose you're sitting around With a lot of 20-something Latino and Latina professionals You know, everyone at least has a bachelor's degree And chances are all of them are working for the man They're working for a company That's the way it is down here When kids get college degrees

[21:45] They almost always end up working an entry-level job at a corporation Anyway, here's the question you throw out If you had a winning lottery ticket Tell me the minimum amount of money you'd have to win To tell your boss the next day Take this job and shove it In other words, what would that magic amount be? Man, I'll tell you That question really stirs the pot Really gets him thinking Well, you know, I've asked that question At a number of get-togethers And, man, the results are surprising You know, that minimum lottery win number I was talking about You'd think when asking Latinos to pick that number They'd be all over the place Well, they're not Oh, there's a little bit of range, of course But not much Turns out the average number And again, I've asked lots and lots of young professional Latinos And Latinas

[22:31] It's around 150,000 US dollars That's their definition of FU money Now, of course, most Latin countries don't use US dollars They use the local funny money, so I'm extrapolating here When I ask them, they'll always give me an answer in their own funny money So that 150,000 bucks is the average US dollar equivalent Now, you might get different answers, but that's my little straw poll The question is, if someone asked you To pick a minimum lottery win Where you'd walk into your boss's office And say, take this job and shove it What's your number for FU money? It turns out it's a million bucks at the low end And two or three million at the high end Average maybe two million for the average working American So the pattern here is that Latinos would take a tenth of the amount of money

[23:16] In a lottery win to quit their day job So, what do you think about that? What's your minimum number? I know, I know, a lot of you guys and gals out there are retired Or way past even thinking about stuff like that But for your younger listeners, what's your number? Is it a million or two or five? I know it's so hard to believe that 150,000 bucks here in Latin America Is considered life-changing money Whereas in the States, it's more like a down payment on the average house What's the average house now? About 400,000? Yep, I just looked it up The average price for a U.S. middle class house is $416,000 By the way, the average square footage of a house in the United States in 2024 was 2,400 square feet Now, as far as Latin American housing is concerned When you try to find an average across Latin America

[24:03] Man, it's all over the place Of course, there are places in the United States where rents are super high also As well as where rents are super low But down here, the range is crazy Because you've got those gringo tourist spots that throw everything out of whack For example, in Puerto Madero, Buenos Aires, it's a very high rent restrict The price per square foot for a newly built apartment is around $650 a square foot Whereas the price per square foot in Lima, Peru in a very nice neighborhood is a third of that $230 a square foot Meanwhile, in a nice area of Bogota, Colombia The price per square foot for a new apartment is only $170 a square foot Do you see what kind of range we're talking about? All those apartments, aforementioned, were in very nice areas of four different Latin American countries

[24:52] Those are some of the numbers if you're thinking about buying But if you're thinking about renting, the numbers are not so crazy The rents are a lot cheaper than in the U.S. And they're not all over the place either For example, the monthly rent for a two bedroom apartment in a decent area of Lima, Peru is about $800 a month Same type of apartment, two bedroom, nice area of Quito, Ecuador, $450 a month Monthly rent for a nice two bedroom apartment in the Dominican Republic, about $650 a month A similar apartment in a nice area of Montevideo, Uruguay, $1,300 a month So with rents between various Latin American countries, in decent areas, you're talking about a 200% spread But when you're looking to buy it, it's a 400% spread

[25:39] Between least and most expensive, similar properties and similar neighborhoods Of course, if you're going to live in a high-end district, or gringo-wise district Gated, guarded, residential tower, swimming pool, jacuzzi, gymnasium, tennis courts You'll pay gringo or nearly gringo prices But normally, if you're not on the gringo tourist trail, you'll pay about half to a third of gringo prices Alright, we're getting towards the end of the show now, here's a quick little email This is from Hank in Carlsbad He says, Johnny, it took me a long time to simplify and streamline my life Prepare myself to get the hell out of Dodge One of the simple things that really helped me a lot was to learn how to say no to people It's a little tough at first, but you get used to it No to my friends asking favors

[26:25] No to the guys at work No to people who want a donation for this or that No to my entitled 20-something kids No to the political organizers No to the church people No to the beggars on the street No to the girl scouts selling cookies Now, my brother, he's a yes-a-holic He has a hell of a hard time saying no, he says yes to almost everything Looking back, it really complicates your life Steals a lot of your free time, too Until I hit 40, I used to be a bit that way myself Hank says, that's when I realized that saying yes Opens you up to every time vampire, conman, timeshare salesman Every Mormon and Jehovah Witness that knocks on your door People need to understand, Johnny, that no is the most powerful word in the English language

[27:14] It's also the word that's most underused People ought to try it sometime Signed, Hank All right, Hank, you've got a great point there, but Try to get people to say no to TikTok, Fakebook, or Instacraft I don't think that's going to happen By the way, no is the most powerful word in the Spanish language, too You've been listening to The Expat Files, living in Latin America If you need some help with your own plan B We can schedule a one-on-one phone or Skype consult Just send me an email, theexpatfiles.gmail.com And if you want to get on the waiting list for my next week-long Expat Insider Seminar in Central America Where you're guaranteed to get a 2 to 5 year head start on your plan B Send me an email, theexpatfiles.gmail.com