Afilias Inc., which operates one of the world's main registries for connecting internet users with their online destinations, has relocated its headquarters from Dublin, Ireland, to the Philadelphia area in a decision partly prompted by the federal tax-rate changes signed into law by President Trump in December.
The move is an early — and possibly the first — case of a company moving its legal home from abroad to the United States as a result of last year's tax cuts. It transforms the firm's existing 40-member office in the suburban town of Horsham into a new corporate base for a business with subsidiaries throughout North America, Europe and Asia.
Factors including "recent favorable U.S. tax changes make Afilias' U.S. presence important in maximizing its future growth," it said in a news release Thursday, when the headquarters move became effective.
As the world's second-largest domain registry, by its own accounting, Afilias runs the master directories for web addresses ending in .info, .mobi., .green and .pet, as well as .xxx and .porn. Its biggest customers are the Reston, Va.-based Public Interest Registry, for which it maintains the authoritative database for addresses ending in .org, and GoDaddy Inc.of Scottsdale, Ariz., which sells web domains generated by Afilias.
Moving its headquarters to the United States made sense for the company because its largest contingent of customers is here, but the final decision to do so came after last year's tax cuts, Afilias senior vice president Roland LaPlante said in an interview.
That legislation reduced corporate taxes from 35 percent to 21 percent but cut the tax even further on any foreign income that is derived from intangible assets in the U.S.— such as those held by technology companies such as Afilias — to 13.125 percent.
"When things changed from a tax situation in the U.S., that prompted a review of the corporate situation in light of the fact that our biggest customers are here," he said.
Drafters of the new tax law in Congress, who set the rate for intangible goods extra low in hopes of luring more such assets to the United States, "may have succeeded with Afilias' move," said Steven M. Rosenthal, a senior fellow with the Urban-Brookings Tax Policy Center in Washington.
Experts at the nonpartisan think tank, which tracks and analyzes issues related to taxation at all levels of government, were not aware of any other examples of previously overseas-based companies that cited the tax cuts as a motivation for relocating their headquarters to the United States, Rosenthal said.
"I think you could say the tax bill seems to be working," he said. But "how long we can maintain the level of public services that are also part of the package to attract business if we lower taxes to an unsustainable level, it's hard to say. The tax bill lowered corporate tax rates dramatically, but at quite a cost."
As part of the headquarters move, Afilias established a new Delaware-based corporate parent, Afilias Inc., under which Afilias plc of Ireland now operates as a subsidiary.
The offices of its U.S. unit in the Horsham Business Center near Dresher and Welsh Roads is now the global company's official home and administrative hub, where functions including marketing, accounting and sales are located, although most of the firm's tech workers are to remain concentrated at an office in Toronto, LaPlante said.
Afilias chief executive Hal Lubsen worked out of the Horsham office before the headquarters move and will continue to do so, LaPlante said.
Staffing at the office will likely now grow, both as a result of the headquarters move and to keep up with already-expected increases in demand for the company's services as web domain names continue to proliferate, he said.