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AIRLINE PILOT!!! Chances for PR?

Relocating, travelling or planning to make Singapore home? Discuss the criterias, passes or visa that is required.
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Re: AIRLINE PILOT!!! Chances for PR?

Postby BBCWatcher » Sat, 27 Feb 2016 8:13 am

Saverin likely renounced his U.S. citizenship in part for tax reasons. However, my impression is he took something of a tax gamble and probably lost. He was expecting to renounce "quietly," or at least hoped so, but that didn't happen. The vast majority of his wealth and income is still U.S. source, so it's rather hard to understand what he was doing or thinking. He also undoubtedly damaged or destroyed his top line potential going forward -- he's rather toxic in business terms.

To my knowledge Saverin has not attempted entry into the U.S. since his renunciation. He would be wise not to test that, and I assume his attorneys have said much the same. If he did manage to enter the U.S. it'd probably be his only and last visit since Congress would likely close the doors tightly. He still has family in the U.S., so when/if one of them is on a death bed he might attempt a visit. He has to choose that test very carefully.

He appears to be "lying low" (in playboy terms anyway), and that's a good idea.

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Re: AIRLINE PILOT!!! Chances for PR?

Postby sundaymorningstaple » Sat, 27 Feb 2016 8:35 am

I don't believe he made a 'switch'. I believe he just gave up his US citizenship. After all, he still holds his, Brazilian citizenship and is a PR of Singapore using his Brazilian passport, therefore it would appear, with his FB billions, that he is giving up his US citizenship for both foreign investment and tax purposes. Doesn't it sound like it to you? There are numerous articles on the internet claiming he has Singapore Citizenship, but nothing from government sources, just hearsay. But it is a fact that he is still a Brazilian citizen and was at least a PR in Singapore since 2009. Why should he change citizenship to Singapore? He's being taxed at resident rates here and has moved his tax domicile to Singapore (all 7 billion++ dollars worth) so the government is going to continue to welcome him here as long as he wants to stay and the US has no real reason not to let him visit as and when as he's not broken any laws, regardless how sinister the move looked, as he apparently paid his exit taxes, etc. the fact that he probably had insider information about FB's IPO just meant he was a shrewd operator but still operated within the law as there was no insider trading going on.

BBC's post was made as I was typing. I'm going to have to agree with his prognosis as well. Legally he can still visit, but if he does, there'll be a test case for sure.

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Re: AIRLINE PILOT!!! Chances for PR?

Postby BBCWatcher » Sat, 27 Feb 2016 8:59 am

It's a guess, but what I think happened is that he was planning to renounce for quasi-political reasons, and he panicked a bit and renounced just before a scheduled increase in the U.S. capital gains tax rate (and Facebook's IPO) in order to reduce his Expatriation Tax. His Expatriation Tax also reset his cost basis to some degree, although that's not necessarily something you'd choose to do at his age.

If your theory is that you're so wonderful you're going to make another billion or two as a "second act," then maybe this gamble makes sense. But very, very few people have major second acts, and all the examples I can think of didn't renounce their U.S. citizenships. Quite the opposite, actually. Earl Tupper made a fortune (for the time anyway) with his Tupperware. He then headed off to Panama, renounced his U.S. citizenship...and simply spent down some of his wealth. He never had a second grand business venture that made any money.

"The Social Network" depicted Saverin as a friend who was in the right place at the right time (due in no small part to his U.S. citizenship), had one good engineering idea, but was something of a business idiot (or at least business naive). The Steve Wozniak to Apple's Steve Jobs, roughly speaking. It's Hollywood of course, so who knows, but maybe Hollywood got this one right. We'll see.

At his level there's really no problem with U.S. taxes. Mitt Romney is in poverty compared to Saverin, and Romney has a U.S. tax rate of 10%, plus or minus. Plus if you're trying to make money in Internet businesses then U.S. citizenship and U.S. presence are seriously important assets, as they were for Saverin himself. The U.S. tax code is less friendly to renunciants, particularly because of mandatory withholding and 30% tax rates (occasionally lower if there's a treaty). I don't think Saverin gambled well here, but, like I said, we'll see.

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Re: AIRLINE PILOT!!! Chances for PR?

Postby ricedoll » Sat, 27 Feb 2016 11:19 am

Why do you all think that renouncing his US citizenship was a gamble? and what quasi-political reasons? Maybe he has thought through it and decided to make business in somewhere with lower tax rates? You don't need to hold a US passport to be successful in your internet business. Maybe he wants to make a hit in the Chinese market instead?

Seems like all I have read, US citizenship might be good mainly if you are a business owner, concerned about treaties, capital gains, expansion of the business and stuff. I think professionals and white collars are concerned more about their income.

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Re: AIRLINE PILOT!!! Chances for PR?

Postby BBCWatcher » Sat, 27 Feb 2016 2:01 pm

ricedoll wrote:Maybe he has thought through it and decided to make business in somewhere with lower tax rates?

That would almost certainly have to be his plan if he renounced for financial reasons. (The timing of his renunciation was certainly for financial reasons. The renunciation itself? I'm uncertain.) All evidence suggests he hasn't succeeded in his plan yet. The Straits Times reported last year that he has invested about $3 million -- pocket change to him, really -- in Internet start-ups. They all seem to be losing money or at least not making much. A shame, really, because even if he lost money as a U.S. citizen he probably could have offset those losses against his Facebook gains. It doesn't work that way as an ex-citizen.

You don't need to hold a US passport to be successful in your internet business.

It depends on your definition of "successful." But he's not only not holding a U.S. passport. He used to hold a U.S. passport, and he's now infamous. A lot of people, particularly in the U.S., don't want to do business with anybody who is infamous. "Eduardo Saverin" on your letterhead may be toxic.

Maybe he wants to make a hit in the Chinese market instead?

Yes, because a Brazilian passport holder living in Singapore who is notorious or infamous (take your pick) is obviously well positioned to be enormously successful in China's much smaller Internet business climate. ;)

Maybe he'll surprise us all, but it hasn't happened yet.

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Re: AIRLINE PILOT!!! Chances for PR?

Postby ricedoll » Sat, 27 Feb 2016 5:37 pm

First of all, I don't think newspapers have the obligation to report anything about his business. Whether he is making a profit/loss or whether he is making a slow profit...We will never know, since we are not his company's auditors. Perhaps he'd rather preserve his wealth, make a slower profit, rather than being heavily taxed by the US? I don't think he is infamous/notorious either. I have very neutral feelings towards him. He hasn't created himself a bad name. Giving up your US citizenship doesn't make you a "bad" person. Why do you have such negative feelings towards him?


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