How America SAVED Eduardo Saverin: Facebook co-founder who renounced citizenship to dodge taxes moved to U.S. because he was at risk of kidnapping
Eduardo Saverin, the billionaire co-founder of Facebook who recently renounced his U.S. citizenship to slash his tax bill, moved to Miami at the age of 13 because he was at risk of kidnapping.
The 30-year-old was on a gangster’s list of potential kidnap targets which led his wealthy parents to flee Brazil in a potentially lifesaving move.
But now Saverin, who was friends with Mark Zuckerberg when they attended Harvard in 2004 and was Facebook’s first investor with a stake of four per cent – worth $3.84 billion – in the deal, has shunned the country in which he made his fortune.
By denouncing his U.S. citizenship, the Brazilian-born billionaire could lower his tax bill on the payout. He now lives in Singapore, which does not have a capital gains tax.
And Saverin is hardly strapped for cash, becoming famous for his playboy lifestyle in Singapore, where he buys bottles of champagne at the most exclusive clubs for supermodels and the super-rich.
He moved to the U.S. in 1992 and became a citizen in 1998, his spokesman Tom Goodman said.
‘Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,’ Goodman told Bloomberg.
His name falls on an IRS list of people renouncing their citizenship from April 30 – but his spokesman said Saverin gave up his U.S. citizenship last September.
The 30-year-old joins a growing number of people giving up their U.S. citizenship in a move that can trim their tax liabilities in the country.
Despite leaving the U.S. behind, he will not avoid all taxes in the country.
He owes what is effectively an exit tax on capital gains from stock holdings, even if he doesn’t sell the shares, Reuven S. Avi-Yonah, from the University of Michigan’s law school, told Bloomberg.
Giving up your citizenship in advance of an initial public offering (IPO) is ‘a very smart idea’, Avi-Yonah added. ‘Once it’s public you can’t fool around with the value.’
Facebook plans to price its IPO on May 17, offering 337.4 million shares at $28 to $35 each, which will be listed on the Nasdaq Stock Market under the symbol FB, Bloomberg reported.
His decision also means he avoids paying the increased income-tax rate when it comes into effect next year. It will rise from 35 per cent to 39.6 per cent for top earners in the country next year.
Saverin has invested in Asian, U.S. and European companies, his spokesman said. Now he plans to invest in Brazilian and in other global companies that have interests in entering Asian markets.
Despite a substantial boost in their collective fortune from the IPO, Saverin will unlikely celebrate with Zuckerberg and the former friends from his college posse.
Saverin began with a one-third stake in the company which was watered down when Zuckerberg began bringing others on board.
The founders became embroiled in a bitter legal battle which left Saverin with a 2 per cent stake, according to the Wall Street Journal – and still an incredibly wealthy man.
Blogs have sprung up tracking his partying with many locals hoping to get close to the self-made billionaire.
He also reportedly drives a Bentley and lives in a penthouse in one of the city’s wealthiest neighborhoods.
According to Asia Tatler, Saverin is a fan of hanging out at Singapore’s only private members club Filter in the Conrad Hotel.
DJs are regularly flown in from around the world and high-end tables come with ice buckets overflowing of bottles of Belvedere vodka and Moet champagne.
The whirlwind of parties, adoring friends and fast cars seems to have left little time for business apart from Saverin’s investment in Rachel K – a start-up cosmetics company run by Rachel Kum, former Miss Universe 2009 whom Saverin also mentors.
He has also ploughed money into information site Qwiki and online payment service Jumio.