Facebook Inc c o-founder Eduardo Saverin has renounced his UScitizenship, according to an Internal Revenue Service report, daysbefore the company's initial public offering. The news, first published by Bloomberg on Friday, was based on anIRS notice late in April that named people "who have chosen toexpatriate." Facebook plans to raise as much as US$10.6 billion in an IPO thatis expected to value the company at as much as US$96 billion. The offering could leave Saverin, who once owned 5 per cent of thecompany, with a hefty capital-gains tax bill. Saverin has sold enough of his Facebook stake that he does notappear in IPO filing documents that list shareholders who own 5percent or more of the company, though his holdings are stillbelieved to be substantial. "Eduardo recently found it more practical to become a resident ofSingapore since he plans to live there for an indefinite period oftime," Saverin's spokesman told the US paper. |
His decision to leave US is independent of the upcoming IPO and thepotential tax liability, the spokesman said. According to a report from The Los Angeles Times, tax experts sayit is a "shrewd tax move" that will save him billions. Which means his stake could amount to about $4 billion after theIPO, the report said. To put it in perspective, Mark Zuckerberg, Facebook's founder,stands to receive a tax bill of more than US$1 billion when thesocial networking website makes its IPO. ISLAND NATION Saverin now lives in Singapore, an Asian city-state that has nocapital-gains tax.
There is a minimum 15 per cent rate forlong-term capital gains in the United States for people inhigher-income brackets. Saverin might pay as much as US$150 million in exit taxes but itwill be less than the taxes he would owe if he stay as a UScitizen. Saverin, who was born in Brazil, was educated in the United Statesat Harvard, where he co-founded Facebook with Mark Zuckerberg andothers. The Facebook co-founder stands at No. 634 on the Forbes list ofbillionaires with an estimated wealth of US$2 billion.
The 30-year-old Brazilian has spent the last four years living inSingapore. In 1992, he moved to the United States and became a UScitizen in 1998. The question of American citizenship became a bit of a talkingpoint this week as former Republican Presidential candidate MicheleBachmann revealed she had become a dual US.-Swiss citizen, thensought to return her new Swiss passport. Renouncing citizenship is a complicated and lengthy affairinvolving a signed oath and an appearance before a U.S. diplomaticofficial, according to the US State Department's website.
Giving up citizenship is an irrevocable act, according to the StateDepartment. According to the Internal Revenue Service report, those who gave upcitizenship last quarter included Philip Radziwill, nephew ofJackie Onassis, the wife of assassinated former President John F.Kennedy. The report added that Saverin is at least the second billionaire togive up his US passport in the last 20 years. firstname.lastname@example.org.
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