French outlet Mediapart report that super-agent Jorge Mendes and his wife have been able to earn €67m of the profits made by his company Gestifute without paying any tax through a letterbox company registered in Amsterdam.

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The European Investigative Collaboration has reached out to Jorge Mendes about this revelation, but he denied it in an letter in response to a request for comment:

“I have always been a tax resident in Portugal, where I declare all my income, including that which I receive from abroad, and where I pay all taxes related to these revenues.”

European tax authorities seem to somewhat doubt the validity of this claim. In an investigation undertaken by 5 countries in Lisbon, they have found that Mendes only declares wages, as per his tax declaration and that he officially does not receive any dividend from the Gestifute group, while the company generates tens of millions in profits.

These dividends, which would be taxed at 28% in his native country, are artificially transformed into capital gains on the sale of shares, which are not taxed in Portugal, according to Mediapart.

The scheme began in Portugal, where Mendes received €29m net of taxes between 2008 and 2012. How did he pull this off? In 2008, he formed a Portuguese holding company, Start SGPS, which owns the three operating companies of his football agency, Gestifute. But instead of paying out dividends, the holding company bought back shares from Mendes, only to then cancel them. This does not change anything for the agent, whether there are 1,000 shares or 500 shares, he remains the 100% shareholder, but is excellent for his portfolio, because share sales are untaxed.

In 2014, the Portuguese tax authorities deemed this practice abusive, because it was designed to escape the “normal process of dividend distribution”, according to a confidential document obtained by Football Leaks. Ultimately, Portuguese authorities concluded that it was not a criminal offence. But, Mendes was required to pay the €5.3m that he had evaded in taxes, plus interest, in a decision that he has since appealed against.

Two years before his latest tax audit was due, Mendes set up a new holding company in the Netherlands, named Start BV, in October 2012. Start BV is a letterbox company without offices or employees, registered at the address of Trust International Management. Mendes holds all the shares of Start BV, bar one, which belongs to his lawyer. When a company has more than one shareholder, it has the right to publicly declare just one, in this case the lawyer.

Jorge Mendes does not appear anywhere on official paperwork. Start BV serves the same purpose as Mendes’ previous holding company in Portugal did – to transform fictitious dividends (taxed at 15% in the Netherlands) into capital gains on the sale of securities, which are no taxed.

There is one small difference and it relates to the arrival of a Mendes’ wife on the scene, Sandra, who he married in 2015.

In October 2012, Jorge gave Sandra 49.99% of his Portuguese holding company, Start SGPS. In November, the agent created Start BV in Amsterdam, which he transferred 51.01% of the rest of the shares in Start SGPS to.

Then in December, Mendes bought from his wife to be, for tens of millions of Euros, via his company Start BV, the 49.99% of Start SGPS that he had given her 2 months earlier.

It seems absurd, but a confidential contract between Start BV and Sandra Mendes explains that the agreement provides for the purchase of securities to be paid over five years and that the price will be equal to 80% of the profits made each year by the Gestifute group between 2012 and 2015. In short, disguised distribution dividends.

In 2012, the Group’s operating companies, owned by Start BV, generated €8.2m in profit. Sandra Mendes is entitled to 80% of this sum, €6.6m. On 18th March 2013, the Portuguese holding company Start SGPS bought €2.2m of its own shares from its parent company Start BV and cancelled them. In exchange for the shares, Start SGPS paid on March 20th €6.6m to the Dutch company, which transferred them the next day to a Portuguese account of Sandra Mendes.

The same process was repeated in 2014 for €12.7m. The following year, Start BV paid €8.8m to Jorge Mendes’ wife. On November 30th 2016, Sandra signed a new contract with Start BV. The deal required that an additional €39.1m must be paid to the agent’s wife. Bank documents obtained by Football Leaks show that she has received the amount in her Swiss accounts in two instalments.

In total, Sandra Mendes has received €67m, net of taxes, by selling to her husband the shares he had ceded to her free of charge. A serious slight of hand.

Interviewed by the European Investigative Collaboration, Jorge Mendes assured that Start BV was not created in the Netherlands for tax reasons, but for his group “to develop on the international scene”. “Start has no additional tax advantage in the Netherlands compared to what it would have in Portugal,” insisted the agent.

In any case, Mendes found in Amsterdam some highly qualified tax advisers in PriceWaterhouseCoopers (PwC).

As revealed during the first season of Football Leaks, the agent bought the rights to the image rights of Colombian attacker James Rodriguez, via a company based in the British Virgin Islands, the one of the infamous tax havens on the planet.

In December 2015, PwC suggested that Mendes terminate a loan he granted through its holding company Start BV to another company in the Virgin Islands, which would prevent the Dutch tax authorities from paying attention to it.

As PwC informed him, if the loan was ceased, Start BV will have “no obligation to provide information” to the Dutch authorities, which will then further not be able to share this information with other tax authorities, in Portugal for example.

In summer 2017, Cristiano Ronaldo was charged with tax evasion in Spain, with the Madrid tax authorities also interested in the Mendes company in the British Virgin Islands that owned James Rodriguez’s image rights, which happened to be registered to the exact same address that Ronaldo held in the British Virgin Islands.

Coincidentally, two months later, the letter-box/trust company that allowed for Start BV to exits withdrew and abandoned its directorships. To replace them, Mendes brings in a certain Eric Davids, who did not have a trust company licence, and yet was a director on 24 different companies.

Start BV moved into a building in the South-East of Amsterdam, where Davids rented a small space on the ground floor. The space was just for show, there were and still are no employees. The “headquarters” of one of the most powerful football agents in the world is now in an empty space in a shared office complex. The company does not even have its own mailbox.

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