How do I proceed with inter-company pricing if we own the foreign operation?

You should treat your own company as you would any distributor. They have to make money and you do too. Some companies want to sell to their overseas operations at a lower price to prevent high duties in the foreign market. Some want to keep the profit at home, so they charge a higher export price.  Local Customs authorities also influence pricing in a market, so you have to use market pricing. If you sell at too low a cost to your own company, the local authorities can charge extra duties or accuse you of dumping. Charges of dumping can have severe consequences. Ask for advice if you are not sure.