New York: Eduardo Saverin, one of Facebook’s four co-founders, has given up his U.S. citizenship, Internal Revenue Service reports.
The news comes just before the social networking giant is launching an initial public offering.
Some analysts say that move could be helpful to Saverin escape some of the huge amount of taxes he’d have to pay on his Facebook stake.
He owned 5 percent of Facebook’s outstanding shares in 2009, according to“The Facebook Effect,”. But later he had sold off some of those shares.
Saverin, a Brazilian national, became a U.S. citizen in 1998 and has been living in Singapore since 2009. United States laws, however, requires its citizens to pay income taxes no matter where they live.
If Facebook’s valuation takes off next week, the move may turn out to be a savvy one — at least from an investment standpoint. If Saverin is still holding any of his Facebook stake, formally leaving the U.S. could lessen his future tax hit.
In 2011, as many as 1,781 Americans give up their US citizenship a rare thing among residents.
CEO Mark Zuckerberg, who co-founded the company with Saverin and two other Harvard classmates, is selling 30.2 million shares of his stake in the company to raise $1.1 billion in cash.
The social network is expected to price its IPO on Thursday in a range it currently estimates at $28 and $35 per share. It plans to begin public trading on Friday, CNN reported.
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