Do you anticipate a ridiculous amount of money owed in taxes next tax period? Well you can avoid paying it for a small price: Giving up your United States citizenship and being banned from the country for the entirety of your life. Could you leave everything behind and never return? Eduardo Saverin can.
Eduardo Saverin is a name most Facebook users have never heard of - assuming they haven't seen the movie "The Social Network." However, Saverin is the co-founder of Facebook, and he owns about 4% of the company. To put that into perspective, once the Facebook IPO is complete, his shares will be worth around $3 billion. With great money comes a great tax, however. This is evident in the amount owed by Saverin - about $67 million (pre-IPO).
The convenience
The convenience seems to lie in the fact that Saverin renounced his US citizenship last September. What does this mean exactly? Well for starters, not only will the Facebook co-founder be a non-citizen of the United States, but because so, he will avoid paying heavy capital gains taxes in the process.
Although it doesn't seem like Saverin had any idea about the "get out of jail" tax avoidance, it's likely he was aware of Facebook's future IPO plans.
Living "la vida loca" in Singapore
Saverin was originally born in Brazil, but has been living the celebrity life in Singapore for the last three years. Forbes justified Saverin's move to Singapore by stating that he's treated like a celebrity all throughout the country. But it wasn't all about celebrity status. As a successful entrepreneur, Saverin must be happy with the fact that Singapore doesn't tax capital gains. These two factors, combined with the overall beauty of the country, is more than enough reason to move to Singapore.
However, it seems US senators aren't too happy with the "dream life" Saverin is living in the Far East.
Senators move to finalize punishment for renouncing US citizenship
With the assumption Saverin bagged his US citizenship to ditch taxes, senators Chuck Schumer and Bob Casey are said to be holding a press conference to enforce punishment for Saverin's actions. There is still uncertainty about whether or not this law has been enforced in the past, but the senators are pushing to finalize it for the future. The law will eventually ban former US citizens who renounced their citizenships from entering the country ever again. Their goal is to force other US citizens to maintain their citizenship (and pay taxes) instead of following in the footsteps of Saverin.
Do you think you can move to another country and never enter the US again for the rest of your life? Where would you move? Share your destinations in the comments below or on the Hudson Horizons Facebook page!