US technology company McAfee plans to relocate its European headquarters from the Netherlands to the Republic in a move that could create up to 100 jobs.

The firm, which develops antivirus software to protect computer systems from attack, told staff at its Amsterdam operations last week about the move, which is being taken to cut its tax bill.

It is understood the firm is evaluating potential locations in Dublin and Cork for its headquarters and is engaged in discussions with IDA Ireland.

The McAfee decision to relocate its European finance operations to the Republic follows a similar move by its chief competitor Symantec two years ago.

Both decisions were driven by the competitive corporate tax rate offered in the State, which stands at 12.5 per cent. The equivalent tax rate in the Netherlands is currently 34 per cent.

The Japanese-owned antivirus company Trend Micro also set up a European operation in the Republic last year.

The decision by McAfee is a coup for IDA Ireland, which recently announced new investments from Intel, IBM and medical firm Guidant.

The online technology ezine the Register (www.theregister.co.uk) reported yesterday that McAfee's relocation plans were delivered to staff at its Amsterdam office last week by its chief financial officer, Mr Stephen Richards.

"Since all EMEA/APAC revenue runs through Amsterdam, the savings would be considerable. The office in the Republic would also be cheaper to run," one staff member at the meeting reported to the Register.

An IDA spokeswoman confirmed last night that the agency was in discussions with the company but no final decisions on investment had been concluded.

However, a McAfee source told The Irish Times that certain functions would almost certainly move to the Republic.

McAfee develops antivirus software for large enterprises, governments, small and medium sized businesses, and consumers. About 70 million individual computer users are protected by its software packages.

The California-based firm, previously known as Network Associates, was founded in 1989 and is quoted on the New York Stock Exchange. It employs 3,841 worldwide.

In April the company reported first-quarter revenues of $217 million (€175.3 million) and earnings of $56 million, or 32 cents per share.

A spokeswoman for McAfee could not be contacted last night for comment.