The name of Eduardo Saverin recently appeared on the Federal Register list of U.S. citizens who have renounced their U.S. citizenship. Saverin who was born in Brazil and currently resides in Singapore is best known as a Facebook co-founder and a soon-to-be billionaire.

The motivation for renouncing his citizenship was thought to be tax related since the planned Facebook initial public offering will provide its shareholders with ample liquidity. Americans who renounce their citizenship will never-the-less have to pay an exit tax. The exit tax is predicated on the value of their assets at the date of expatriation. With uncertainty over direction of tax rates in the U.S. coupled with Singapore's relatively low-tax environment (particularly for foreign investors) and no capital gains tax apparently played a role in Mr. Saverin's decision.

It is however apparent that it was only part of his consideration to renounce his U.S. citizenship.

According to Saverin's spokesman Tom Goodman, the move was prompted by the rules that make it more difficult for U.S. citizens to invest overseas. “Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time…U.S. citizens are severely restricted as to what they can invest in and where they can maintain accounts,” said spokesman Tom Goodman. “This was a financial rather than a tax motive.”

The U.S. tax and regulatory environment is undoubtedly having an impact on the decision of individuals to remain U.S. citizens. In 2011, a total of 1,780 Americans relinquished their citizenship. The number in 2010, 2009, 2008 and 2007 was 1,485, 731, 226 and 446 respectively. The uptrend in 2012 continued as a total of 460 Americans (including Mr. Saverin) renounced their citizenship in the first quarter of this year.

U.S. expatriates have long complained about U.S. system’s taxation of worldwide income. This burden has now been increased by panoply of reporting requirements including foreign bank account reporting rules and the newly minted Foreign Account Tax Compliance Act (FATCA), which requires financial institutions based outside the U.S. to obtain and report information about income and interest payments accrued to the accounts of American clients.

In a recent Bloomberg article on the subject, Richard Weisman, head of the global tax practice at Baker & McKenzie in Hong Kong was quoted as saying: “It’s a loss for the U.S. to have many well-educated people who actually have a great deal of affection for America make that choice…The tax cost, complexity and the traps for the unwary are among the considerations.”

It may be time for the U.S. policymakers to do a cost-benefit analysis with respect to all the new reporting rules that are being placed on Americans residing in the U.S. or abroad.