What Actually Happened

Eduardo Saverin, Facebook co-founder, formally renounced US citizenship in September 2011 — six months before Facebook’s May 2012 IPO.

He had already relocated to Singapore in 2009. When Facebook IPO’d at ~$100 billion valuation, Saverin’s stake was worth roughly $2 billion.

The Common Misconception

Media coverage suggested Saverin renounced to avoid US tax on the IPO gain. But this misunderstands US expatriation tax.

Under Section 877A (the “exit tax,” in effect since 2008), covered expatriates are subject to a mark-to-market deemed sale of their assets on the day before expatriation. Saverin’s Facebook stake was already substantial when he expatriated — and that unrealized gain was subject to US exit tax at renunciation, not avoided by it.

What Eduardo legitimately did save:‍ ‍US tax on post-expatriation appreciation. Between renunciation in 2011 and continued Facebook growth afterward, further gains were outside US tax reach. In 2025, Meta reached it’s record valuation (market cap) of $1.89 trillion (or 1,890 billion), and Eduardo’s stake in Meta is worth ~$43 billion, making him Singapore’s richest resident. That’s real tax savings, but not the “avoided all tax” headline.

What US Persons Should Actually Understand

The Section 877A exit tax rules:

• Applies to “covered expatriates” (net worth >$2M or specified income thresholds)

• Mark-to-market deemed disposition of most assets

• $890K exclusion (2026 amount)

• Immediate US tax on remaining gain

• Special rules for retirement accounts, deferred compensation, non-grantor trusts

You cannot renounce your way out of tax on already-accrued gains. You can escape US tax on future gains — a very different value proposition.

Timing Matters Enormously

For someone with substantial unrealized gains contemplating renunciation:

• Renounce BEFORE major appreciation events happens (like Saverin did)

• Understand the exit tax cost fully modeled

• Ensure you have alternative citizenship secured

• Genuine emotional and practical readiness for permanent decision

FTR Perspective

For HNW US persons the renunciation calculation is compelling for future-earnings scenarios, not past-appreciation scenarios. Someone with modest existing wealth but expecting substantial future business gains has more to save than someone with substantial existing appreciation.

Alternatives short of renunciation:

• Puerto Rico Act 60 (see Article F6) preserves citizenship

• Careful investment structuring to minimise CBT drag, including in offshore jurisdictions

• Coordinated cross-border planning to use FEIE and treaty benefits