In a bid to avoid US capital gains tax, Eduardo Saverin gives up US citizenship days before multi-billion dollar IPO
One of Facebook’s co-founders has defriended the United States.u00a0Eduardo Saverin has decided to forgo his US citizenship ahead of the company’s
multi-billion-dollar public offering next week, according to IRS records posted online.
New start
Saverin will become a citizen of Singapore, where he has lived for the last three years.
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Un-like: Even though several people are upset about Eduardo Saverin’s decision to denounce his American citizenship, his spokesperson said that it was more of a practical move than a financial one
Facebook’s IPO will send an estimated $3.8 billion into Saverin’s pockets.
Giving up US citizenship will save Saverin a fortune in taxes, since Singapore doesn’t have a capital-gains tax.
Still, the 30-year-old billionaire won’t be off the hook entirely.
Singapore taxes some foreign-sourced income, and Saverin will also be slapped with an “exit tax” by the US on his shares, whether or not he sells them.
Saverin helped Mark Zuckerberg launch Facebook in 2004 at Harvard, and was named the company’s chief financial officer (CFO). The two friends had a falling out as the startup became a worldwide success.
Living the high life
Saverin was eventually frozen out and left with only about 4 per cent of the company, according to various reports.
Saverin, born in Brazil, became a US citizen in 1998.
He has been living for the last three years in Singapore, where he drives a Bentley, owns a penthouse and rubs elbows with the rich and famous. Saverin has also invested in a line of cosmetics started by a former Miss Universe contestant from Singapore.
“Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” said a spokesman for Saverin.
The spokesman said he made the decision late last year.
Saverin’s name appeared on a quarterly IRS report published April 30 by the US Office of the Federal Register listing all the Americans who have renounced citizenship.
The ousted CFO won the right to be acknowledged as a co-founder in a 2009 lawsuit filed against Zuckerberg, the terms of which were not disclosed.
The duo’s friendship and fallout was immortalised in The Social Network, which tells the story of Facebook’s rise to fame.
Facebook’s IPO on May 18 is valued at as high as $96 billion, the largest for any Internet company in history.
Saverin’s decision causes outrage
Americans are outraged about news that Facebook co-founder Eduardo Saverin’s reported move to renounce his US citizenship to avoid paying federal taxes. “Americans feel personally ripped off,” according to comments posted across a variety of social media platforms.
Saverin had made huge sum of money from Facebook-loving US taxpayers and is now defriending the country when it is time to pay back some of that money back to US taxpayers. u00a0
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