This paper explores potential advantages and barriers of virtual teams toward making an interrelation between small and medium-sized firms (SMEs) with a comprehensive review on different aspects of virtual teams in SMEs based on authentic and reputed publications. The purpose of the state-of-the-art literature review is to provide an overview of what is known about the structure and dynamics of virtual collaboration in SMEs which they are the back bone of the world business. This study seeks to address some of the advantages of virtual R&D team in the existing extensive literature on the increase SMEs interrelations. Besides of identify benefits of virtual R&D team in SMEs, propose the way of further studies and recommend improvements. We argue that the routines used to promote interrelation between SMEs, based on virtual collaboration can sometimes create problems for firms as they ignore new challenges. We elaborate various theories on the virtual R&D team by reviewing the precedent papers.