Article in Tech Industry category.
Saverin Bails On the US, Heads for Singapore
Eduardo Saverin, co-founder of Facebook, may not be quite as handsome as his onscreen counterpart Andrew Garfield, but he is worth $4 billion. And he’s…
Eduardo Saverin, co-founder of Facebook, may not be quite as handsome as his onscreen counterpart Andrew Garfield, but he is worth $4 billion. And he’s renouncing his American citizenship for the more tax-friendly residency status of Singapore.
The Brazilian-born 30-year-old moved to the US in 1992, became a citizen in 1998, went to Harvard, made a few billion and is now said to be bailing to avoid a huge tax rate. Ah, the American dream.
The official story is that Saverin is moving because he has numerous investments in Europe and Asia as well as in the United States, and the move will “make things simpler.” However there is no mention of what simplifications the impending billionaire will enjoy, other than the joy of evading the taxes he would otherwise have to pay the U.S. government.
Taxes may not be Saverin's entire motivation, but with a $4 billion stake in Facebook, they certainly seem to be playing a crucial part: by leaving the US in September, Saverin only pays tax on the value of his stock at that time. If Facebook were to double in value over the next year and Saverin sells, he will save hundreds of millions of dollars.
Of course, in the grander scheme of things, Saverin’s exit is really not that big a deal. In recent months there have been stories detailing how massive corporations like GE and Apple avoid billions in taxes with offshore accounting chicanery, from New York City mayor Michael Bloomberg to Mitt Romney to large scale investor Peter Thiel.
One could argue that Facebook is very much a product of America's well-regulated, well-taxed society. The internet is a product of government funded research at ARPANET, working closely in cooperation with public universities. The money and experience came from Silicon Valley, where the globe's top tech investors all (presumably) pay capital gains tax, in return for living in close proximity to the world's busiest startup hub and the ambitions 18-year-olds who might become the next Zuckerberg.
While Saverin’s takeoff has brought about a variety of opinions, the wags on Twitter at least are giving him a warm sendoff: