A comparability analysis is the cornerstone for the application of the arm’s length principle. The identification of potential comparables must be made with the objective of finding the most reliable comparable while keeping in mind that such comparables will not always be perfect. When it comes to identifying comparables for an intercompany contract manufacturing arrangement – a limited risk arrangement in the value chain of a multinational enterprise – it is typically compared with third-party contract manufacturers, which are essentially entrepreneurs. Such a comparison, without an appropriate comparability adjustment, will not result in a correct conclusion on the arm’s length nature of the intercompany arrangement. In this article, the author explains why such a comparison is superficial and how the reliability and quality of the comparability analysis can be improved.