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Knowing that you're about to pocket close to $4 Billion, what self-respecting Harvard man wouldn't consider getting the fastest plane out of the US of A, leaving his passport behind and claiming to be Singaporean? Reports out of the States seem to indicate that Eduardo Saverin is heading East as fast as a jet can carry him. KitGuru wonders if it should ‘Like' this update to his profile.
With the Facebook IPO set to smash all records this month, there will be an icing smothered cake to be divided up among the owners.
Eduardo has around 4% of the company, so his slice of the cake will immediately make him a member of a club with less than 2,000 members: The Billionaire Boys club 2012.
When asked about his decision to drop his US citizenship like a hot potato, Eduardo's representatives said that it was crucial to his plans that he spend lots and lots of time among the 3.5 million Singaporeans that presently hold passports for the city-state.
After 150 years as a British trading post, Singapore gained independence and had its first elections in the late 50s, but wisely decided to carry on driving on the correct side of the road [Everyone knows that most people on the planet are right handed, so it makes sense to control the car with your superior right hand and only use your left, intermittently for minor operations like gear changing and to open the glove compartment – Ed].
KitGuru says: Having renounced America last September, it looks like Eduardo might be a permanent fixture in the tax haven of Singapore. According to Wikipedia, this might be an upgrade, overall, as the people of Singapore produce more wealth (per person) than the people of the United States. If the ‘BJ in the toilet scene' from Social Network is to be believed, then maybe Eduardo will find contentment in an oriental land.
Comments below or in the KitGuru forums.
The US is the only government with “citizenship based” taxes other than Eritrea..but the US doesn’t approve of Eritrea taxation: http://isaacbrocksociety.com/2012/01/30/only-the-u-s-may-tax-its-citizens-living-abroad-u-s-condemms-use-of-disapora-tax-for-other-countries/
Please keep in mind CORPORATIONS don’t play by the same rules…money earned outside the US is exempt.
Imagine you were born in Brazil.. but live, work, pay taxes in the US. Regardless, Brazil demands a tax return/pay tax every year.
Due to changing rules and forms, a US based tax attorney specialized in Brazilian law is required ($$$). You must report all bank accounts/assets held in the US. Failure to comply risks your life savings.
Brazilian politicians need $$$$, so demand US banks report the accounts of Brazilians living abroad. The US banks are upset because a) US law forbids this, b) expensive and c) US banks aren’t Brazilian tax collectors. US banks kick out Brazilians instead of reporting.
Your future is at risk due to citizenship in a country you no longer live in.
The only way out is to renounce your Brazilian citizenship.
What would you do?
Most of us renouncing aren’t extremely rich… but Saverin paid his taxes while living in the US (plus school, housing, etc.). He financed Facebook with private, not public $$$. He is not “fleeing the country to avoid taxes”. He lives in Singapore (for the last 2 years) and wants to avoid double taxation … is this wrong?
The numbers of people abroad expatriating will continue to rise.. the waiting list at a local US embassy is 2 years… the process is slow (deliberately) and expensive ($450 to renounce, plus exit tax if you are wealthy). How quickly people forget that the US was founded by expats primarily to avoid taxation… it didn’t take long to come full circle.
Betty makes a good point, but the US wasn’t founded to avoid tax, but rather on the mantra ‘No taxation without representation’. That cuts both ways – ‘No representation without taxation’ should be the norm, and yet ex-pats everywhere expect still to be able to vote. There are millions of UK ex-pats who never pay a penny and yet cast crucial votes at every election without having to suffer the consequences.