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Rory McIlroy spurns tax havens to base global interests in Ireland

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Rory McIlroy

Rory McIlroy

Rory McIlory

Rory McIlory

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Rory McIlroy

Golfer Rory McIlroy is shifting most of his operations to Dublin as he seeks to simplify the way his management company operates.

The decision will mean a significant boost to the Exchequer as the golfer will pay normal company tax at 12.5pc on his royalty fees - which are expected to amount to hundreds of millions of euro over his career.

The Irish Independent understands McIllroy, who is currently the world's top golfer, will file documents to create a new company - known as Rory McIlroy Inc - with the Companies Registration Office in Carlow today.

The new company, headed by Donal Casey, will manage all the royalty payments from the golf star's various endorsements for Nike sportswear, Omega watches and, most recently, computer games.

The 25-year-old lives and works in many countries, and could have followed the usual route of creating a complex structure that would have located his management company in the United States while protecting his wealth with tax havens such as the Virgin Islands or Bermuda. Instead, he has decided to locate everything to do with his brand and intellectual property in Ireland.

Prize money and other such earnings will not be part of the Irish company's revenue because they tend to be treated as income, and taxed accordingly by the country where the championship was won.

Bitter

McIlroy ended his relationship with his previous sports management company Horizon Sports Management following a sometimes bitter legal action.

While McIllroy's new company draws income from endorsements all over the world, it is relatively small. It employs just six people in management and a further four people in administration. It also uses many experts here such as accountancy firm BDO and award winning advertising agency Rothco.

Sports management has been around for decades, but McIllroy is undoubtedly the Irish sportsman with the greatest ever potential to become a billionaire. With 2.5 million followers on Twitter, he has an enormous fan base across the world which means he can attract lucrative sponsorship from companies that would not look at other sportsmen.

Last week, computer game maker Electronic Arts said it is making the 25-year-old champion the face of its new video game, the Rory McIlroy PGA Tour. He replaces Tiger Woods, who was the face of the game for 16 years and helped to amass sales of more than $700m.

As a media product, golf needs big winners - and McIlroy has the makings of a star that golf has lacked since the apex of Woods's popularity, marketing professor Ricard Jensen said last week.

"Rory is highly wanted because he's charismatic, he's good looking, he's scandal-free and he's shown glimpses of extraordinary skill," Prof Jensen said.

"He's the kind of person that sponsors feel wouldn't get them into trouble."

The Northern Ireland native is the third-highest-paid golfer at present and made $49m last year, according to 'Golf Digest'. About $35m of that came from earnings off the course, including a sponsorship deal with Nike. His management company declined to put any figure on McIllroy's earnings yesterday.

Irish Independent