Tax
Transfer pricing
Transfer pricing is the setting of prices for transactions between related companies under common control, such as a parent and its subsidiary. Tax authorities require these prices to reflect what unrelated parties would agree, known as the arm's length principle, and may require documentation.
In plain terms: What your own companies charge each other, and whether tax authorities accept it.
Why it matters
Relevant the moment a founder has both a US entity and a company at home. Charging nothing, or an arbitrary figure, invites adjustment. Documenting a defensible basis early is far cheaper than reconstructing one under audit.
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