Eduardo Saverin, Facebook Co-Founder, May Save $67 Million By Dropping U.S. Citizenship: Report [UPDATE]

Eduardo Saverin, Facebook's co-founder, stands to save $67 million in U.S. taxes by renouncing his U.S. citizenship and moving to Singapore.

Facebook co-founder Eduardo Saverin apparently thinks U.S. citizenship is worth less than $67 million.

This article has been updated to include Eduardo Saverin's comment in The New York Times.

Saverin stands to save at least $67 million in taxes by renouncing his U.S. citizenship and moving to Singapore, Bloomberg reports. And if Facebook's stock price rises after its initial public offering on Friday, Saverin would stand to save even more money. He owns about 4 percent of Facebook, which may be worth as much as $2.89 billion, according to Bloomberg.

Facebook announced plans to sell 25 percent more shares in the company's public debut than initially planned, setting up the offering to total up to $18 billion. The social networking site could be valued at about $100 billion if everything goes according to plan. Facebook plans to sell shares for as much as $38 per share on Friday.

Bloomberg reported last week that Saverin was on an IRS list of American citizens renouncing their citizenship. Saverin's spokesman told Bloomberg that he gave up his citizenship around September. Singapore doesn't tax capital gains, while the U.S. taxes capital gains at a maximum rate of 15 percent.

Maybe it's not just taxes though. In Singapore, Saverin, who was born in Brazil, "enjoys a status worthy of Kim Kardashian, with many fans dreaming of [the] sight of him," according to The Wall Street Journal.

Saverin told The New York Times Wednesday that the renouncement was not motivated by the U.S. tax code. "This had nothing to do with taxes," he told the NYT. "I was born in Brazil, I was an American citizen for about 10 years. I thought of myself as a global citizen."

Yet if Saverin did give up his citizenship to get around taxes related to Facebook's IPO, he wouldn't be the only one. About 1,780 Americans gave up their U.S. citizenship last year -- a more than sevenfold increase from 2008, according to a separate Bloomberg report.

John Dorrance III, the heir to the Campell’s Soup fortune, for example, ditched his U.S. citizenship and moved to Ireland before selling his stake in the family business, according to Forbes. Dropping citizenship to avoid taxes isn't a phenomenon limited to the U.S. either. Lily Safra, the Brazilian widow of banker Edmond Safra, left her native country for Monaco.

Indeed, even Facebook itself has already tried to get out of paying more in taxes, structuring its IPO in such a way so as to sidestep federal and state income taxes on its 2011 earnings, according to a February report by Citizens for Tax Justice.

Comments

[amajamus]

09:48 PM on 05/18/2012

Does anybody what is going on here? I am reading another article about Saverin and people from other countries are commenting on what a joke Americans are for even making something that is the norm around the world (renouncing citizenship and also becoming expats) into an issue. America is becoming a joke to the rest of the world and we don't even realize it. It's a sad day for America.

[The PR Verdict]

10:37 AM on 05/18/2012

The PR Verdict: C (Distinctly OK) for Eduardo Saverin. Why bother saying this has nothing to do with taxes? Better to say nothing and avoid getting into any details. By this stage its is assumed it was a choice about taxes - only something truly remarkable would blow this assumption out of the water.

[sxldvnt]

11:59 PM on 05/17/2012

Sure attack a private individual that is leaving a country but refuse to do anything to enhance the opportunities of those who are here suffering under this failed administration. Seems that the we should be more worried on keeping our producers and not penalizing them for abandoning a country that is sinking under this administrations failed policies.

[drolleen]

11:56 PM on 05/17/2012

I became a citizen, I am of similar background, and I am never renouncing.

Not because I am patriotic, but because I have some integrity. Savarin doesn't, and its because of leeches like him that our system is broken. Here's why:

If, say, Savarin was on Medicaid for 10 years with AIDS medications for 14k a year, taking PAL grants for 10 years, getting small business loans for 10 years, and both parents were on Medicare for 10 years. Then suddenly he won it big and decided to move to Singapore. He wouldn't have to pay back a dime, and its perfectly legal.

Why is it legal? Because our law makers sold their soul long ago, but for a while it still worked - because most Americans have integrity.

Yes, we should vote for someone that will sue law makers and make them work in road gangs to pay it back. still, in the meanwhile, the existence of America depends on the integrity of its citizens.

Savarin was, therefore, never an American - he was only a creep.

[Toasty J]

11:42 PM on 05/17/2012

Wait, I thought the US didn't tax the rich.
That's what I would think if I read this sight.

So he would have paid $67 MILLION, minimum, in taxes.
Is that enough, HP, or should he pay $1 billion, just to be sure he is paying his "fair share".

[Budwithcommonsense]

01:01 AM on 05/18/2012

Let's us count please. He was paid 4% which valued $2.89 Billion so $67 Million is less than 10% of 1 Billion. WTHF Wow Wow How much money does the guy need to live?

[Richard Bartholomew]

05:55 AM on 05/18/2012

How much the guy needs to live is completely beside the point. I suspect that Mr Saverin is simply trying to avoid being shaken down by greedy American elected officials.

When you're mugged in Central Park, the mugger takes yojr wallet, not your entire bank account. But does that mean you don't mind being mugged?

[Richard Bartholomew]

05:53 AM on 05/18/2012

I agree with you.

Obviously the Singaporeans think that Mr Saverin's 'fair share' is so much less than his fellow Americans 'fair share' that he's ready, willing, and able to change citizenship. It looks to me as though American pols are quite a bit greedier than Singaporean ones. And whose fault is that?

[ponyloco]

10:41 PM on 05/17/2012

Give me 67 million and I'll never step foot in the US again. Promise!

[mleonnig]

11:31 PM on 05/17/2012

No money is worth my citizenship. So many value money over ideals and principles.

[Matt Lehman]

10:29 PM on 05/17/2012

The new poster boy for greed.
A man who already has more money than you can spend in twenty lifetimes gives up his citizenship to add another seven lifetimes of wealth. Sadly, in the metrics that measure real worth, he's bankrupt.

[amajamus]

03:52 PM on 05/18/2012

But what Romney does is OK? Put his money in a Swiss account and the Caymens so can avoid taxes? What is the difference between what Saverin is doing and Romney is doing . . . what Saverin is doing is 100% legal.

[Elizabeth Everett]

10:23 PM on 05/17/2012

We need to change how people pay taxes in this country. We should switch from income taxes to sales taxes and import taxes. Basic necessities like unprocessed food and simple clothing should not be taxed at all while luxury items are taxed heavily. That way, the poor are not taxed into destitution and the rich can't get out of paying their fair share. Also, corporations will no longer be able to dodge taxes by manufacturing in places like China, then exporting to the US. We should charge them right at the ports and not allow them to unload cargo on American soil unless they pay up.

[joefargo]

10:07 PM on 05/17/2012

Facebook is going public because it is about to implode. The founders will make a bundle. Early investors will make a bundle. And, brokers will make a bundle selling you vapor. It's all hubris. Think? What is the product and what is the income stream from the product. Will the product be as valuable as people use disguises in order to avoid repercussions from employers and others being able to build adverse dossiers based on associations? Of course not. When folk are anonymous you will no longer be able to find that long lost classmate. How interesting is Facebook when the only folk reading are those you already know. Get a blog for the same results. Solution for Facebook owners is to sell the company quick to unsuspecting investors. Brokers are paid to float hubris to business press who then make it seem like this is the "hot deal" of the decade. Of course the greedy little cofounder is going to flee. What, you thought ethics? Jeese, use your head.

[isaluna]

10:01 PM on 05/17/2012

He must have way more money than anybody needs if $67 million is just the 15% taxes he owes! We were paying 42% of our income...when we had employment! Good riddance the greedy swine! I hope he is never allowed into the Country without paying up.

[amajamus]

03:54 PM on 05/18/2012

"He must have way more money than anybody needs," so according to your comment, we limit how much money a person can make. When they reach that limit then they aren't allowed to make more? Isn't that anti-capitalist?

[isaluna]

02:25 PM on 05/22/2012

I mean he can afford to pay his share of taxes without feeling the pinch --- and yes the distribution of wealth at this level means there are a lot of middle income people who have lost their pensions somewhere. There is such a thing as TOO MUCH . When one person holds this kind of wealth ( we are talking over 100 million) there are a lot of people suffering because of it somewhere.

[mwoody1955]

09:48 PM on 05/17/2012

Hmmm, havent we heard this same story over and over again. The 1% doesnt care abouit anyone but the 1%. And that my fellow Americans is never going to change.

[Budwithcommonsense]

01:03 AM on 05/18/2012

Remember Romney is the 1%.

[Michigan Tim]

09:19 PM on 05/17/2012

If $67 million represents 15% of the taxable amount then the total taxable amount is approximately $447 million. That means that after paying taxes he would have $380 million. Apparently that's just not enough for him.

Facebook could only have become what it did by starting in this country. This country had much to do with its success. Saverin doesn't believe that he should pay taxes in this country that contributed mightily to his success.

When someone thinks that $380 million isn't enough that is pure unadulterated greed.

[looiedl]

09:07 PM on 05/17/2012

He was just following the roadmap to riches that the Republican Party's 'eventual nominee' would recommend.

[Vapula]

09:04 PM on 05/17/2012

Why wouldn't he move if it will save him that much money? Who wouldn't?

[PickOneTwoThree]

09:59 PM on 05/17/2012

I wouln't - it's not like he would be a pauper if he paid his taxes.

[Richard Bartholomew]

05:58 AM on 05/18/2012

I would. Why be shaken down for more when you can be shaken down for less. It doesn't matter how much you start with, it's always better to be robbed for less than robbed for more all else being equal.

[Budwithcommonsense]

01:05 AM on 05/18/2012

@2.89 Billion minus 67 Million do the math.

[dsingram]

08:41 PM on 05/17/2012

If what he is doing is legal and our tax code causes a smart person to leave, then shame on us. Maybe if we had a better business climate he would want to start businesses here....

This should be a wake up call. We need to be the place people want to come to, not leave.

[FredSays]

09:05 PM on 05/17/2012

He comes from a wealth family and has invested wisely. Is he really "smart" in the sense that he could create something other than putting seed money into a promising venture.

I'm just asking because I don't know of any substantial "creative" contribution he made to Facebook? It's not that the importance of capital can be dismissed, but to categorize him as "smart" might be a bit over the top. Being rich doesn't necessarily mean one is smart.

[dsingram]

10:59 PM on 05/17/2012

OK, I retract smart.... If our tax code causes really rich idiots who want to invest in new businesses to flee the country... then shame on us...

[amajamus]

03:56 PM on 05/18/2012

And you DO know how much "creativity" everybody else contributed to FB? Without using Google, I doubt you can name all the founders of FB.