Eduardo Saverin, a Harvard buddy of Facebook (Nasdaq: FB) CEO Mark Zuckerberg, surrendered his U.S. passport last year when he renounced citizenship, the U.S. Internal Revenue Service said.
As a result, Saverin, 30, a Brazilian national now resident of Singapore, should escape most tax consequences of the imminent initial public offering of Facebook, expected next Thursday.
Saverin owns about 4 percent of the company, although his name doesn't appear in IPO filings the Menlo Park, Calif.-based social network has made with the U.S. Securities and Exchange Commission since Feb. 1.
The Saverin citizenship forfeiture was reported earlier by Bloomberg News.
Because he was a U.S. citizen and participated in Facebook's startup, Saverin may still face some tax liabilities on capital gains from his Facebook investment. The amount is not immediately known.
By contrast, the IPO documents state one reason for the IPO is to clear cash to pay as much as $2.6 billion Zuckerberg may already owe on his Facebook shares. Zuckerberg sold some of them through secondary markets to handle his $100 million donation to the Newark, N.J., school system in 2010 and other activity.
Assuming the underwriters don't dramatically change the share allocation before the expected IPO pricing and sale on Thursday, Zuckerberg is expected to control about 58 percent of the company for a stake valued around $29 billion.
Saverin's stake, estimated by website Who owns Facebook, could be valued at $3.84 billion.
Saverin's representatives said he plans to reside in Singapore for an unspecified period.