Internal lending within a multinational company refers to a way for a multinational company to consciously take advantage of the differences in foreign exchange control and tax regulations of each subsidiary's host country to realize internal suburban transfers by providing funds to each other. It is also an internal fund transfer mechanism for multinational companies. important component. If the subsidiary's host country imposes no restrictions on fund transfers, the parent company can lend directly to the subsidiary in the currency of any party or third party. The interest rate on direct intra-company loans is actually the internal transfer price of funds. If the subsidiary's host country imposes restrictions on fund transfers, the parent company will use roundabout loan methods to bypass the host country's foreign exchange controls to achieve the company's internal fund transfers.

The roundabout loan methods commonly used by multinational companies are: ① Parallel Loan. A multinational company that plans to lend to its foreign subsidiary will find another subsidiary with surplus funds in the same host country by itself or through the help of other financial institutions, and the two parties will reach a mutual loan agreement;

②Back-to-back Loan (Back-to-Back Loan). The parent company or other subsidiary that provides funds deposits the funds in an intermediary bank, and the bank or its branch in the subsidiary's location lends the equivalent amount of funds to the local subsidiary in the local currency or the currency of the parent company or the currency of a third country.