Website / App Development Agreement

A software development agreement governs a bespoke-software engagement between a client and a software company or freelance developer in Bangladesh. The contract must fix the specification (functional and technical), delivery methodology (waterfall or agile with sprints), acceptance testing procedure, payment milestones, IP assignment, source-code escrow (if applicable), warranty period, and post-delivery support. Under Section 17 of the Copyright Act, 2000 the default position is that the developer / author owns the copyright — the agreement must expressly assign IP to the client on payment. Bangladesh has strong software-export incentives (10-year tax holiday for registered IT companies), so the contract should also fix invoicing currency, foreign-remittance procedure, and applicable VAT / SD.

Stamp & registrationA software development agreement is typically executed on a Tk. 300 non-judicial stamp for evidentiary weight, with the schedule of deliverables and technical specifications annexed. No registration is required. For contracts over Tk. 5 lakh, some clients prefer Tk. 1,000 stamp. VAT under the Value Added Tax and Supplementary Duty Act, 2012 applies at 5% for software services (with export exemption for foreign-currency invoiced work). Include an express indemnity for third-party IP infringement claims — critical because Bangladeshi courts strictly enforce copyright and licensing rules.

What this agreement typically contains

Client name, address, TIN, VAT registration, authorised signatory
Developer / company name, trade licence, BASIS membership (if any)
Detailed scope with functional and technical specification annexure
Delivery methodology (waterfall / agile), sprint length, review cycles
Milestones and acceptance testing procedure for each deliverable
Total fee, currency, payment milestones, and TDS handling
IP assignment clause and residual rights for developer's framework code
Source-code delivery mechanism and escrow arrangement (if any)
Warranty period (typically 30-90 days) and post-warranty support terms
Governing law (Bangladesh) and dispute resolution (arbitration under the Arbitration Act, 2001)
Signatures of authorised signatories of both parties

Create this agreement now

Frequently asked questions

Who owns the source code — the developer or the client?: Under Section 17 of the Copyright Act, 2000 the developer / author owns the copyright by default. The client acquires ownership only through an express written assignment in the contract. Even then, the developer typically retains rights in pre-existing framework code, libraries, and generic utilities they bring to the project — these are licensed to the client (perpetual, non-exclusive) but not assigned. The contract should distinguish: (a) bespoke code created for the client → assigned; (b) developer's pre-existing framework → licensed. Without this distinction, disputes arise when the developer re-uses code for another client.
What is source-code escrow and do I need it?: Source-code escrow is a tripartite arrangement where the developer deposits the current source code with a neutral escrow agent (a law firm or professional escrow service). If specified trigger events occur — developer insolvency, cessation of support obligations, breach of critical maintenance terms — the escrow agent releases the code to the client so the client can maintain the software with another team. Escrow is essential for mission-critical bespoke systems (banking software, healthcare, ERP) where the client cannot risk being locked out. For simpler websites or apps, direct source-code delivery on milestone completion is usually sufficient.
What VAT applies to software services in Bangladesh?: Under the VAT and Supplementary Duty Act, 2012 and the NBR SRO regime, IT-enabled services including software development are subject to VAT at 5% (reduced from the standard 15% under a preferential rate for ICT services). If the client is a foreign buyer and the software is exported (foreign-currency invoiced through a bank), the transaction is zero-rated — a VAT-free export. Registered IT / ITES companies also enjoy a 10-year corporate tax holiday under the Income Tax Ordinance, 1984 (subject to conditions). Include clear invoicing terms — whether prices are inclusive or exclusive of VAT — to avoid disputes.

Other contracts in this category

What this agreement typically contains

Client name, address, TIN, VAT registration, authorised signatory

Developer / company name, trade licence, BASIS membership (if any)

Detailed scope with functional and technical specification annexure

Delivery methodology (waterfall / agile), sprint length, review cycles

Milestones and acceptance testing procedure for each deliverable

Total fee, currency, payment milestones, and TDS handling

IP assignment clause and residual rights for developer's framework code

Source-code delivery mechanism and escrow arrangement (if any)

Warranty period (typically 30-90 days) and post-warranty support terms

Governing law (Bangladesh) and dispute resolution (arbitration under the Arbitration Act, 2001)

Signatures of authorised signatories of both parties

Frequently asked questions

Who owns the source code — the developer or the client?

Under Section 17 of the Copyright Act, 2000 the developer / author owns the copyright by default. The client acquires ownership only through an express written assignment in the contract. Even then, the developer typically retains rights in pre-existing framework code, libraries, and generic utilities they bring to the project — these are licensed to the client (perpetual, non-exclusive) but not assigned. The contract should distinguish: (a) bespoke code created for the client → assigned; (b) developer's pre-existing framework → licensed. Without this distinction, disputes arise when the developer re-uses code for another client.

What is source-code escrow and do I need it?

Source-code escrow is a tripartite arrangement where the developer deposits the current source code with a neutral escrow agent (a law firm or professional escrow service). If specified trigger events occur — developer insolvency, cessation of support obligations, breach of critical maintenance terms — the escrow agent releases the code to the client so the client can maintain the software with another team. Escrow is essential for mission-critical bespoke systems (banking software, healthcare, ERP) where the client cannot risk being locked out. For simpler websites or apps, direct source-code delivery on milestone completion is usually sufficient.

What VAT applies to software services in Bangladesh?

Under the VAT and Supplementary Duty Act, 2012 and the NBR SRO regime, IT-enabled services including software development are subject to VAT at 5% (reduced from the standard 15% under a preferential rate for ICT services). If the client is a foreign buyer and the software is exported (foreign-currency invoiced through a bank), the transaction is zero-rated — a VAT-free export. Registered IT / ITES companies also enjoy a 10-year corporate tax holiday under the Income Tax Ordinance, 1984 (subject to conditions). Include clear invoicing terms — whether prices are inclusive or exclusive of VAT — to avoid disputes.