“Eduardo Saverin, the billionaire co- founder of Facebook Inc. (FB), renounced his U.S. citizenship before an initial public offering that values the social network at as much as $96 billion, a move that may reduce his tax bill,” Danielle Kucera, Sanat Vallikappen and Christine Harper report for Bloomberg. “Facebook plans to raise as much as $11.8 billion through the IPO, the biggest in history for an Internet company. Saverin’s stake is about 4 percent, according to the website Who Owns Facebook. At the high end of the IPO valuation, that would be worth about $3.84 billion. His holdings aren’t listed in Facebook’s regulatory filings.”
Kucera, Vallikappen and Harper report, “Saverin, 30, joins a growing number of people giving up U.S. citizenship, a move that can trim their tax liabilities in that country. The Brazilian-born resident of Singapore is one of several people who helped Mark Zuckerberg start Facebook in a Harvard University dorm and stand to reap billions of dollars after the world’s largest social network holds its IPO. ‘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 Tom Goodman, a spokesman for Saverin, in an e-mailed statement.”
“Saverin moved to the U.S. in 1992, and became a citizen in 1998, his spokesman said,” Kucera, Vallikappen and Harper report. “Renouncing citizenship is an option chosen by increasing numbers of Americans. A record 1,780 gave up their U.S. passports last year compared with 235 in 2008, according to government records. Income-tax rates for top U.S. earners will rise to 39.6 percent from 35 percent next year, and rates on capital gains and dividends also are scheduled to rise unless Congress blocks the increases. ‘It’s a loss for the U.S. to have many well-educated people who actually have a great deal of affection for America make that choice,’ said Richard Weisman, an attorney at Baker & McKenzie in Hong Kong. ‘The tax cost, complexity and the traps for the unwary are among the considerations.'”
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