Exchange rate uncertainty introduces to the risk that occurs due to variations in the exchange rate among foreign and domestic money. Further, a company can acquire in foreign exchange in foreign currency to prevent long-term exchange rate uncertainty. Transfer pricing comprises all features of the pricing of settlements within related parties. In reality, the transfer-pricing laws allow tax authorities to make arrangements for tax purposes to the amount paid for goods, services, and investment supplied connecting related parties. They are allowed to handle such arrangements as being on 'arm's-length' sessions including payment and to adapt respectively for tax purposes. Such an arrangement will influence the taxable profits of the associated entities that are subject to tax. Exchange rate plays the maximum role if a foreign investor wants to setup a business. To minimize this risk investor should take care of following points: 

1. Take expert or professional opinion 

2. Make capital budgeting decision 3. Study and evaluate market properly