Cross-border invoice payments

QUESTION 01

Which country’s law applies when an overseas client does not pay?

Start with the contract’s governing-law clause, dispute-resolution clause and identity of the contracting parties. Governing law, the court or arbitration forum, and where an award can be enforced are related but different questions. The customer’s email domain, invoice currency or your preferred court does not settle all three.

Record where each legal entity is established, where services were provided and where the debtor has assets. EU guidance explicitly tells businesses to check the law governing their contract and warns that its late-payment rules may not apply under non-EU law. For a services invoice, do not assume the international goods convention, CISG, supplies the answer: UNCITRAL’s overview excludes sales of services. Get cross-border advice if the agreement is silent or conflicting.

QUESTION 02

What should I confirm before invoicing an international business client?

Confirm the legal entity that bought the work, its registered address, billing contact, agreed currency, tax identifiers where required, purchase-order requirement, submission portal and payment terms. A global brand may have several subsidiaries; an enthusiastic project sponsor may not be the person authorised to approve an invoice.

Ask the buyer to confirm the details in writing before work or at least before billing, and retain the response with the contract. The example below is an administrative checklist, not a replacement for contractual or tax review. If the entity paying differs from the contracting entity, clarify the arrangement instead of silently changing the invoice or assuming a parent company guarantees the debt.

Hello [name],

To prepare the invoice for [project], please confirm:

• Contracting legal entity and billing address
• Authorised accounts-payable contact and submission method
• Purchase order or vendor reference required
• Invoice currency and agreed payment terms
• Tax identifiers and any documentation your finance team needs
• Agreed treatment of bank charges or deductions

Our records currently show [entity], [currency], and [terms]. Please flag any mismatch with the agreement before we issue the invoice.

Thank you,
[name]

QUESTION 03

Who pays bank charges or exchange-rate differences on an international invoice?

Check the agreed currency and allocation of payment costs. There is no universal rule that every bank fee or exchange-rate loss belongs to the customer. The amount the buyer sent, the amount your bank received and the amount you recognise after conversion can differ for different reasons.

Reconcile the remittance reference, original currency, intermediary charges and your bank’s conversion before calling the invoice underpaid. If the agreement clearly allocates a charge, explain the shortfall with that clause and evidence; otherwise discuss a fair resolution rather than inventing a fee retroactively. For future work, specify invoice currency, permitted payment routes and treatment of transfer costs. Keep tax withholding separate from bank charges because its legal basis needs a different check.

QUESTION 04

What should I do if an overseas client deducts tax from my invoice?

Ask the client’s finance team to identify the tax, legal basis, taxable amount, rate and supporting certificate or official record. A deduction can be a genuine withholding obligation, an invoicing error or a misunderstanding; do not treat every deduction as either automatically valid or deliberate nonpayment.

Give the contract, invoice, countries involved and client explanation to a tax adviser. Check any agreed gross-up language before deciding who bears the cost. EU guidance says cross-border B2B services commonly use reverse-charge VAT, but expressly identifies exceptions; that is not the same as withholding tax and is not a global exemption. Reconcile the undisputed cash received while the correct tax treatment is being established, keeping a clear record of the remaining issue.

QUESTION 05

Can I charge an overseas EU client statutory interest and recovery compensation?

EU commercial-payment example; national law and contract scope must be checked.

Potentially, but first establish that the transaction and governing law fall within the relevant commercial late-payment rules. Your Europe describes interest and a flat EUR 40 recovery-compensation amount for eligible late-paid invoices, with higher amounts possible in some countries. The page also identifies contractual-performance conditions and excludes consumer transactions and insolvency proceedings from the rules it describes.

Check the applicable national law, agreed terms, due date and current rate before calculating a claim. The same guidance warns that EU rules might not apply if the contract is governed by non-EU law. Do not add EUR 40 to every overseas invoice or treat an interest calculation as proof that the underlying service charge is undisputed.

QUESTION 06

Can the European Small Claims Procedure help recover a service invoice?

Eligible EU cross-border claims; Denmark is excluded.

It can be an option for an eligible cross-border civil or commercial claim within its scope. Your Europe describes claims up to EUR 5,000 excluding expenses, with Denmark excluded. It is an alternative to national procedures and can be used for a claim against another business; it is not a worldwide online collection service.

Confirm that the dispute is eligible, choose the court with jurisdiction and prepare Form A with the agreement, invoice and delivery evidence. Budget for fees, possible translation and enforcement. A judgment still needs to be enforced under the relevant national rules if the customer does not pay voluntarily. For a larger amount, an excluded dispute or a party outside the procedure’s scope, investigate the appropriate alternative with local advice.

QUESTION 07

Can an Indian MSME use the delayed-payment council route against an overseas company?

India supplier with an overseas buyer; entity identity and other possible remedies need local advice.

Do not assume that it can. The Ministry of MSME’s Samadhaan FAQ explicitly states that the MSMED Act’s delayed-payment provisions are not applicable to overseas companies. An Indian supplier’s Udyam registration alone does not establish a right to use that route against a foreign contracting customer.

Identify the actual buyer: an Indian subsidiary and a foreign parent are different legal entities. Review the agreed law, court or arbitration clause, delivery records and the country in which assets are available. Ask an Indian adviser with cross-border experience to assess the appropriate route and any export-payment requirements. Avoid quoting domestic MSME interest or deadlines in an overseas demand as though they apply automatically.

QUESTION 08

Can I use Singapore’s Small Claims Tribunals for an unpaid service invoice?

Singapore Small Claims Tribunals; eligibility and service requirements apply.

Some service-contract claims are eligible, but the tribunal’s conditions matter. Singapore Courts lists contracts for services within scope, a usual claim limit of S$20,000 that can rise to S$30,000 with both parties’ written consent, and a two-year filing limit from the event creating the cause of action.

The court also says the claim must be served on a respondent in Singapore; a Singapore connection alone is not enough to bypass that requirement. Check the pre-filing assessment, correct respondent and insolvency restrictions. Do not split a larger claim into artificial smaller cases to fit the limit. If the facts involve a foreign party, a complicated dispute or a deadline close to expiry, obtain Singapore legal advice before choosing this route.

QUESTION 09

Is arbitration a good way to recover an international invoice?

It may be appropriate where the contract contains a valid arbitration agreement and the likely recovery justifies the process. Review the seat, governing rules, language, appointment procedure and costs. Do not assume that adding “arbitration” to an overdue reminder gives you a right the parties never agreed.

UNCITRAL explains that the New York Convention provides a framework for recognising arbitration agreements and foreign arbitral awards. That helps explain arbitration’s cross-border role, but an invoice is not an award, and recognition is not guaranteed payment. For a modest agency invoice, fees and enforcement costs may outweigh the benefit. Ask counsel to compare negotiation, mediation, court proceedings and arbitration against the contract and the debtor’s asset location.

QUESTION 10

Will winning a court case abroad guarantee that my invoice gets paid?

No. Establishing liability and collecting money are separate steps. A debtor may pay voluntarily, but otherwise you need an available enforcement route and assets that can lawfully satisfy the judgment. Recognition in another country may be a further requirement; a foreign court order is not automatically executable everywhere.

Before filing, ask an adviser in the likely enforcement country about recognition rules, documents, translation, costs and realistic asset information. GOV.UK’s England and Wales guidance illustrates that even domestic enforcement can require a further application and fee. Eligible European Small Claims judgments have a specific recognition framework, but national enforcement still matters. Choose a route based on probable net recovery and timing, not merely the chance of obtaining a favourable document.