Facebook Co-Founder Makes Excuses for Renouncing US CitizenshipBy: Shawn Hess - May 14, 2012
As we reported on friday, Facebook co-founder Eduardo Saverin has renounced his United States citizenship which he has held since 1998. Saverin moved to the US from Brazil in 1992 and met the now the famous social network creator, Mark Zuckerberg during his days at Harvard. According to the 2012 film, the Social Network, Eduardo contributed a great deal to key financial workings at Facebook that made it possible for the site to become a success.
After he sued Zuckerberg and Facebook he inherited a substantial financial settlement and an over 4% share of the company. At the doorsteps of the much anticipated Facebook IPO, Saverin and the rest of the shareholder at the California-based company stand to make a lot of money, but will also be confronted with a huge tax obligation when it comes time to square-up with the government.
Fortunately for Saverin, he has been proactive in planning for this day and took steps to renounce his US citizenship back in April. He plans to become a citizen of Singapore where it is said he will have more freedom over where he invests his capital. A spokesman for Saverin was quoted as saying, “Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time”.
With his renounced citizenship Eduardo will sidestep a huge tax bill, but will still pay a sizable exit tax on his shares of Facebook. Now Saverin’s spokesperson is attempting to rationalize his departure beyond just the tax aspects. The claim is that it isn’t about taxes at all, but about freedom to invest as he pleases.
Here’s what a spokesperson for Saverin told the Wall Street Journal:
“U.S. citizens are severely restricted as to what they can invest in and where they can maintain accounts,”
“Many foreign funds and banks won’t accept Americans. This was a financial rather than a tax motive.”
“His decision had nothing to do with dissatisfaction here, but with his strong desire to do business there,”
So that is the latest from Eduardo Saverin and his big Facebook money. He’s leaving the country so that he may concentrate on foreign investments and not attempting to minimize his IRS obligation at all. We’ll keep you posted if anything more comes of this situation. Apparently it is becoming more popular for major US investors to renounce their citizenship in order to take advantage of investment opportunities elsewhere.