are they a foreign corporation? are they even paying any u.s. taxes? do they have an "office" in the caymans? etc., etc., etc. you're a small fish in a big pond...don't try to figure out how or why the other (foreign) guy is making money...just make sure that you are making money. and, if you seem to be in competition with them, and you seem to be more profitable than them, and they are your parent company, and they are letting you live?? they probably have a real good reason for doing so.
your/their issues are VERY complex...international business/taxation is not a playground...it's a mine field.