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Real Madrid accepted that the Providence fund would pay it 200 million euros from two companies based in a tax haven, the Cayman Islands, as published by infoLibre, which is based on new documents from Football Leaks.

Real Madrid signed a letter of intent with Providence for which it would collect 500 million euros in ten years, divided into three parts, two of 200 million and one of 100, in exchange for giving up a percentage (23.75%) of the increase experienced by some of their commercial exploitation rights (sponsorships and those derived from their digital platform). The first of the 200 million terms covered the period 2017-2021. Rights such as the sponsorship of the shirt and the name of the stadium or the sports city were outside the agreement.

Madrid, according to infoLibre, did not sign that agreement with Providence, but with one of its subsidiaries, PQ VII Sarl, domiciled in Luxembourg, a company with a share capital of only 20,000 euros. Behind this company are two companies based in the Cayman Islands.

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“Two companies based in the Cayman Islands and domiciled in a building in George Town where there are thousands of domiciled companies guarantee the payment to the club of 200 million by a Luxembourg company of 20,000 euros of share capital! It seems like a joke, but I'm afraid it's serious“, says, according to infoLibre, the general director of the club, Jose Angel Sanchez, in an email to which the aforementioned medium has had access.

The club's financial director, Julio Esquerdeiro, drew up an internal note in which he warned that “lThe investment structure that the investor uses (Providence) must avoid reputational and image risks that could derive from it for Real Madrid, therefore, this structure should be adjusted to a common practice that does not pose fiscal risks to Real Madrid. “And it recommended that the contract was with “an entity resident for tax purposes in Spain directly or indirectly owned by the investor“According to infoLibre, this was not done.

“Given this structure, easily verifiable by the Tax Agency, the exemption from withholding payments from Real Madrid to PQ VII SARL, as it is a company resident in the EU, will almost certainly be questioned by the Tax Agency, which will requalify the payments considering the effective beneficiary, in this case, a tax haven, and therefore, forcing Real Madrid to practice a 24% withholding on payments to Providence “, warned the financial director, who considered as not illegal These structures, although likely to be considered “fraud of law” by the Spanish Treasury. “The chances of this happening are very high,” he insisted.

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Gabby Barker
Gabby is someone who is interested in all types of sports, she loves to attend watching matches live. Whenever there is a match being played in her city, she makes sure to get the tickets in advance. Due to the love for sports, she joined Sportsfinding, and started writing general sports news. Apart from writing the news, she is also the editor for the website who checks and edits every news content before they go live.

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