Facebook Co-Founder Drops U.S. Citizenship to Avoid Taxes
Sunday, May 13, 2012
Eduardo Saverin (Photo: The Harvard Crimson)
Proving once again the adage that wealth has no patriotism, billionaire Facebook co-founder Eduardo Saverin has renounced his U.S. citizenship to avoid a hefty tax bill when Facebook goes public on May 18.
Born in São Paulo, Brazil, in 1982, Saverin came to the U.S. at age 11 after his family learned that the boy was marked as a potential kidnapping victim by gangs that specialized in abducting the children of the wealthy for ransom.
He became a U.S. citizen in 1998, later earning a degree in economics at Harvard University and co-founding Facebook with classmates Mark Zuckerberg, Dustin Moskovitz, and Chris Hughes.
Fast-forward to 2012, and with the Facebook initial public offering expected to generate up to $96 billion, Saverin, who owns about 5% of the company, is set to enjoy a large payday, which would ordinarily yield a large tax bill as well. Saverin would have owed Uncle Sam much more if Zuckerberg hadn’t diluted his business manager’s shares as a result of a dispute over the direction of the social network Web site. Had that not happened, Saverin would have had some 34% of the company.
Although Saverin’s spokespeople have denied money had any bearing on his decision, the fact is that Saverin will save millions of dollars by being a citizen of the Asian city-state of Singapore, a low-tax haven where Saverin has lived since 2009.
As AllGov reported three months ago, about 1,000 Americans, most of them wealthy expatriates, renounce their citizenship every year, largely for tax reasons.
To Learn More:
Facebook co-founder Eduardo Saverin gives up U.S. citizenship (by Hayley Tsukayama, Washington Post)
A Facebook Founder Renounces His U.S. Citizenship (by Quentin Hardy, New York Times)
Tax Evaders Renounce U.S. Citizenship (by Noel Brinkerhoff, AllGov)
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