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2)  Sales-minus pricing – Prices on sales between divisions are arrived at    by deducting costs and profits from the price of the final good, or from that at the stage of further processing.
Very similar to cost-plus pricing, but at least this method acknowledges the final price of the product in the market.

3) Negotiated pricing - The divisions are free to negotiate and agree on a price between themselves.
The resulting price however, will depart from optimality depending upon the negotiating power of the two divisions.

4) Market pricing- The price that would prevail when the division sells the commodity to an unaffiliated (external) party, (or a hyperthetical sale price to an outside party).
Potential problems might arise;-
• Discounts for volume sales?
• Supply problems, who gets precedence?

The above problems relate to all transfer pricing strategies. However, when two divisions are resident in two different countries, ie. a multi-national company, additional factors need to be taken into consideration. These additional other factors include;-

*Corporation Tax - The different rates of tax between differing countries means an opportunity to reduce the company’s overall tax burden.

*Repatriation of Profits – Some countries (particularly developing countries) do not allow dividends to be taken out of the country or at least place some restrictions on the repatriation of dividends.

*Import Tax on Goods – Can substantially increase the cost of imported goods, making the company’s final product uncompetitive in the local market.

*Relative Exchange Rate/Relative Inflation Rate.

*Import Quotas – Many countries expect a minimum local content to be included in the final product.

*Relative Cost of Capital – Large borrowings in one country can be exported to another via inflated prices. Particularly important if the exchange/inflation rate is likely to reduce the debt over time.
 
*Control of Capital – Head office can better see where the best returns can be achieved.

*Minority Interests – Dividends paid to minority local shareholders  (leakage), come out of any profits declared, (if any?).

*Cost of Intangibles – Such as patents, trademarks, royalties, management fees, etc.

*Employee Relations – Can offset militant union demands if little or no profit is made.

*Public Relations – The relationship with the government, banks, 留学生论文网commercial business, suppliers customers, and the general population of the host country.