Eduardo Saverin, one of the four multi-billionaire founders of Facebook, has renounced his US citizenship in a move that could save him millions of dollars of tax ahead of the planned flotation of the social network, it has been reported.
An upcoming Initial Public Offering (IPO) is thought to give Facebook a value of $96 billion, of which Saverin owns 4%.
Tom Goodman, a spokesman for Saverin, told Bloomberg that: “Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time."
Brazilian-born Saverin, 30, became a US citizen in 1998 but currently lives in Singapore which doesn't have a capital gains tax. Reuven S. Avi-Yonah, a tax expert at the University of Michigan, told Bloomberg that making such a move was a "very smart idea".
Saverin would still face an exit tax paid by those who give up their US citizenship though this is certain to be far less than what he would incur by not doing so.
Saverin has previously been involved in legal proceedings with Facebook CEO Mark Zuckerburg, suing him in a dispute over ownership. The case was settled for an undisclosed amount.