Yahoo Finance Facebook Co-Founder: America is OK. It’s the Rules That Are a Pain
Eduardo Saverin, the Facebook co-founder who gave up his U.S. citizenship, has nothing against the U.S., just its complicated rules on U.S. citizens holding money overseas, a spokesman said.
Mr. Saverin, who now lives in Singapore, decided last year to renounce his U.S. citizenship, a decision that was made public a few days ago. The move sparked an outcry among some tax experts who suspect he’s aiming to save on taxes. Although Mr. Saverin will have to pay a hefty exit tax for renouncing his citizenship, based on some calculation of his assets, Singapore is a relatively low-tax jurisdiction, particularly for foreign investors, and does not levy capital gains tax. Thus he could save in the longer term.
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In a political environment that’s rife with talk of raising taxes on the wealthy, Mr. Saverin’s case could become another flash point.
Saverin spokesman Tom Goodman said Sunday his renunciation was prompted not by tax considerations but by U.S. rules that make it more difficult for U.S. citizens to live and invest overseas.
“U.S. citizens are severely restricted as to what they can invest in and where they can maintain accounts,” said spokesman Tom Goodman. “Many foreign funds and banks won’t accept Americans. This was a financial rather than a tax motive.”
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It’s true many U.S. expats complain that American rules are making life more difficult for them. Those include the U.S. tax system’s global reach (many countries tax based on residency); foreign bank account reporting rules; and the Foreign Account Tax Compliance Act (FATCA), which requires foreign financial institutions to start reporting to the IRS on U.S. citizens’ accounts.
Expats say as a result of all the regulations, some foreign banks are dumping more U.S. customers. Mr. Goodman also cited FATCA, among other rules, as a problem for Mr. Saverin.
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Treasury Department officials say they don’t see evidence of a systemic problem for Americans living abroad arising from FATCA. People as wealthy as Mr. Saverin tend to have an easier time untangling red tape than the average U.S. retiree living abroad.
The spokesman said Mr. Saverin plans to continue to invest in tech companies around the world, including the U.S.
“His decision had nothing to do with dissatisfaction here, but with his strong desire to do business there,” Mr. Goodman said. He also plans a charitable foundation.
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