Facebook Co-Founder Dodges Tax Duties, Renounces His Citizenship
Facebook co-founder Eduardo Saverin has decided to junk his American passport, believing that his U.S. citizenship would prove impractical as he stays most of the time in Asia, where he has long-secured residency status.
In a news release issued over the weekend, Mr Saverin, through his spokesman Tom Goodman, said that he has renounced his allegiance to the United States, a country that once provided his family protection.
According to The Australian, Mr Saverin and his family escaped Brazil in the early 1990s to elude alleged threats of kidnapping, which was pervasive in the Latin American nation at that time, targeting members of rich families.
More than 20 years later, the former Harvard buddy of Mark Zuckerberg had thought it wise to change the colour of his passport, a move that media reports suggested was meant to dodge the likely spikes on U.S. tax duties that Mr Saverin will have to pay.
As a 4 per cent owner of Facebook, the Brazilian-born Saverin will soon be attributed with an estimated worth of $US4 billion, based on projections that the initial public offering (IPO) venture of the hugely popular social networking would fetch close to $US100 billion.
But the uptick on his wealth, according to analysts, would also mean that the U.S. government will have to go after Mr Saverin brandishing a heavier tax bill.
As one of the U.S. citizens with standing membership in the elite billionaires' circle, the Facebook investor will have to fork out as much as $600 million in cash to pay for his latest capital gains tax.
That obligation, analysts said, will legally disappear minus the perk and privileges of being a national of the world's biggest economy and lone superpower.
And the practical in Mr Saverin, it appears, had outmuscled his patriotism as Mr Goodman downplayed suggestions that the man credited for co-creating a site that counts more than 750 million as active members was merely outmanoeuvring the tax man.
"Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time," Mr Goodman said in a statement.
Mr Saverin's representative, however, failed to address the likelihood that the young billionaire could be seeking the protection of the more lenient business regulations being enforced in the island nation.
Although the Saverins were already well-off, Mr Saverin has displayed his uncanny ability to earn fortunes on his own by providing the early finances required by Mr Zuckerberg in launching Facebook in 2004.
The company started out with Mr Saverin as its chief financial officer but was eventually eased out as new venture capitalists entered the picture.
Legal suits soon pitted Mr Saverin against his former buddy and the tussle was later on settled by Mr Zuckerberg, with the former acquiring an undisclosed amount and Facebook shares.
The Australian reported that Mr Saverin belongs to the growing numbers of high-earning Americans who were compelled to give up their citizenship to possibly dodge big amount of tax duties.
Tax rates in the United States, analysts said, are expected to further surge as the government implements new measures that would add up more cash to the dwindling federal coffers.