Kose operates through a Zimbabwean company and a South African company. From the outside, that looks like a detail of incorporation. From the inside, it shapes almost everything: where revenue is booked, which currency the costs are in, which regulator has a say, which bank account a customer’s payment lands in, and what an investor is actually buying when they buy a share.
More African founders are building across borders than ever before, often because one market supplies the customers and another supplies the capital, the talent or the banking. Splitting time between Harare and Sandton has taught me that the cross-border structure is not legal admin to delegate and forget. It is a capital decision, and getting it wrong early is very expensive to fix later.
Why the structure matters more than founders think
Money does not move freely between the entities. Exchange controls, withholding taxes and banking requirements govern every transfer. A business that assumes it can sweep cash from one country to the other whenever it needs to will discover, at the worst moment, that it cannot.
Investors buy one entity, not the idea. When a fund invests, it takes shares in a specific company. If the valuable contracts, the intellectual property and the revenue sit in different places, the investor will ask which entity actually owns the business, and “it is complicated” is a poor answer.
Each regulator sees only its own piece. Your licence in one country does not travel to the other. Compliance in one jurisdiction tells the other jurisdiction nothing.
The questions to settle early
Where does the intellectual property live? Code, brand and trademarks should sit in one deliberate place, with the operating companies licensed to use them on written terms. Leaving it wherever a developer happened to be contracted is how founders end up unable to prove they own their own product.
How do the entities pay each other? Services, licences and management fees between related companies need written agreements at prices a tax authority would accept. Transfer pricing sounds like a problem for multinationals. It applies to a two-entity startup as soon as money crosses the border.
Which entity holds which customers? Customers should contract with the entity that is licensed and taxed where they are. Mixing this up creates tax exposure and regulatory risk that stays invisible until an audit or a due diligence.
Who sits above both? At some stage, most cross-border ventures need a holding structure that investors can buy into cleanly. Choosing the jurisdiction for that holding company is a decision about where future capital will come from, and it should be taken with advice, not convenience.
Currency is a structural question
Each entity thinks in its own currency. Revenue in one country and costs in another create a currency position whether you planned one or not. A Zimbabwean business earning in US dollars and paying a South African team in rand is exposed to every move in the rand, and that exposure belongs in the board pack, not only in the accountant’s notes.
Decide where margin should sit. Intercompany pricing determines which entity is profitable. That choice has tax consequences, but it also decides where cash accumulates and how easily it can be used. Founders who leave it to default often find their profits trapped in the country where they least need them.
Price contracts in the currency of the cost. Where you can, match what you charge to what you pay. Every mismatch you accept is a small bet on the exchange rate, and small bets compound.
The operating disciplines
Keep separate books from day one. Even when one team runs both entities, each needs its own accounts, bank accounts and records. Consolidation is easy when the parts are clean and nearly impossible when they were never separated.
Document every intercompany transaction. If a Sandton team member works on the Harare product, the time is a service and should be charged as one. Informality between related entities is the thing auditors find first.
Hold reserves where the obligations are. Payroll, rent and supplier payments in each country should be covered by cash already in that country. Relying on a transfer to arrive in time is a bet against two banking systems at once.
The honest cost
A clean cross-border structure costs money before it earns any: lawyers in two jurisdictions, accountants who understand both, intercompany agreements that feel absurd for a business of your size. It slows down decisions, because moving money or people across the border becomes a process instead of a phone call. And there is no structure that removes the risk entirely. Rules change, currencies move and regulators reinterpret. The founders who come through those shifts intact are not the ones who found a perfect structure. They are the ones who could explain, at any moment, exactly what they owned and where.
