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Velarozone

For SMEs with customers and suppliers in more than one country

An SME trading in the UAE and abroad: two currencies, two VAT treatments

The short answer

An SME trading across borders needs books that keep the VAT treatment of each supply right, record every transaction's currency and conversion, and produce management accounts a bank can read. We set them up to do all three and run them monthly.

Cross-border trading multiplies the questions a domestic business never asks. Is this supply an export, and is the evidence for zero-rating on file? Is this purchase from abroad subject to VAT under the reverse charge? Which exchange rate applies to the invoice, and which to the payment, and where does the difference go? What does the bank mean by management accounts, and how often does it want them?

None of those is difficult when the records are designed for them from the start. The failures come from books built for a single-currency, single-country business that are later asked to answer multi-country questions from bank statements alone. This page is about designing them right, or redesigning them where the trading has outgrown them.

This is for you if

  • You import, export or both, or sell services to customers in several countries.
  • You invoice in dirhams and at least one other currency.
  • Your VAT returns have zero-rated and standard-rated supplies on the same return.
  • Your bank or a lender has asked for management accounts, or will.

This may not be the right route if

  • All your customers and suppliers are in the UAE — the ordinary bookkeeping page fits.
  • You want customs or trade-finance advice; those are their own specialisms and we coordinate them.
  • You want a bank's or a lender's decision promised.

At a glance

Indicative cost
Customs, trade-finance and foreign-exchange charges are the specialists' and the banks'; the VelaroZone service fee for the design and the monthly work is itemised in your engagement letter.
Timing
Design in days; a backlog cleared once; then monthly, with management accounts on the cycle the bank needs.
What's included
  • VAT codes for exports, imports and the reverse charge
  • Multi-currency books with the differences posted
  • Management accounts a bank or a lender can use

What this service includes

  • A chart of accounts and VAT codes designed for exports, imports and the reverse charge.
  • Multi-currency bookkeeping with the exchange differences posted, monthly.
  • VAT returns with the export evidence and the reverse-charge entries on file.
  • Management accounts on a cycle your bank or lender can use.
  • Year-end accounts and the audit file where the licence requires one.

What it does not include

  • Customs, trade-finance and foreign-exchange advice; we coordinate the specialists.
  • Statutory audit, signed by a registered auditor.
  • Tax advice in the customer's or supplier's country.

Process

How the work is sequenced

Each stage has its own dependencies — activity approvals, document legalisation, authority processing, and bank review — and we report progress against them rather than against one overall date.

  1. 01

    Design

    VAT codes, currencies and the management-accounts format agreed with you and, where relevant, your bank.

  2. 02

    Rebuild or set up

    The ledger reconfigured or started; the backlog cleared where there is one.

  3. 03

    Monthly

    Bookkeeping, reconciliation, exchange differences, VAT returns, management accounts.

The full sequence, stage by stage

Paid from abroad and the bank keeps asking about the transfers? That page is the invoice trail.

Prefer to start in writing? Send the details through the contact form.

Start with a structure assessment

In an initial consultation you receive a plain-language decision summary, a document-preparation list, and the next actions for your situation. Current figures are confirmed within your adviser-reviewed route comparison.

What the books must answer

The cross-border questions, and where the answer lives

Each question has a record that answers it; the books are designed so the record exists.

Questions a trading SME's books must answer, and the records behind each.

  • Is this supply zero-rated?

    Who asks it
    The Federal Tax Authority, at review
    The record that answers
    Export evidence and the customer's location on the invoice file

  • Does the reverse charge apply?

    Who asks it
    The Federal Tax Authority
    The record that answers
    Supplier invoices from abroad, coded at entry

  • Which exchange rate?

    Who asks it
    The auditor, the tax authority
    The record that answers
    Rate at invoice and at settlement, with the difference posted

  • Where did this transfer come from?

    Who asks it
    The bank
    The record that answers
    Invoice and contract matched to the receipt

  • Is the business profitable this quarter?

    Who asks it
    The bank, a lender, you
    The record that answers
    Management accounts from a reconciled ledger

  • What is owed and to whom?

    Who asks it
    You, monthly
    The record that answers
    Aged receivables and payables by currency

The service

Accounting and bookkeeping

The service page sets out the monthly work, the filings and where statutory audit sits, for any UAE company.

See the accounting service
Container terminal and cranes at a Dubai port

Every route is planned against how the business will actually operate in the UAE.

After the licence

What you may also need

The four services most founders in this situation ask about next, each on its own page.

Next decision

Related reading

Accounting and bookkeeping

Exporters and online sellers paid from abroad

VAT registration

Questions

Frequently asked

Are all my exports zero-rated?
Exports of goods and services can be zero-rated where the Federal Tax Authority's conditions are met, and the conditions differ between goods and services and by where the customer is and what is delivered. The books are set up to test each supply and keep the evidence.
What is the reverse charge?
A mechanism under which the UAE business accounts for VAT on certain purchases from abroad as if it had made the supply itself, and recovers it in the same return where it is entitled to. It is a coding decision at entry, not a year-end adjustment.
What are management accounts?
A profit and loss, a balance sheet and usually a cash-flow statement, prepared monthly or quarterly from a reconciled ledger, with the notes a reader needs. Banks and lenders ask for them because audited accounts arrive too late to lend on.
Which exchange rate should we use?
The authority publishes the rates to use for VAT purposes, and accounting standards say how to translate transactions and balances. The books apply both, and record the differences where the two diverge.
Our books are a year behind. Where do we start?
With the bank statements and the invoices, in that order, and with the VAT returns already filed reconciled to what the records now say. A backlog is cleared once, then the monthly rhythm holds it.

Sources

Regulations, fees, and eligibility can change. Every regulatory statement is re-checked before publication and dated above.

Legal notes and scope

Velarozone provides setup and operational-readiness coordination. This page is general information, not legal, tax, immigration, or banking advice.

This page is general information about UAE business setup, not legal, tax, immigration, or banking advice. Rules, fees, permitted activities, and bank policies can change. Final eligibility depends on your facts and the applicable rules at the time of application.

UAE corporate tax, VAT, and free-zone treatment depend on your specific facts. Home-country obligations may also apply. We coordinate with your tax adviser and do not provide a tax opinion.