TRW & Co · Contracts, IP and technology
Software, SaaS and Cloud Contracts in Bangladesh
A SaaS contract Bangladesh businesses sign must work commercially, protect the data it hosts under the Personal Data Protection Act 2026 and fit a Bangladesh Bank payment route. Software is a copyright work, so every deal is a licence plus services. This guide covers licensing, SaaS and cloud terms, support, escrow, open source, AI, procurement and how foreign suppliers get paid.
Key pointBangladesh Bank treats software bought by e-delivery, recurring subscriptions and royalties differently. Describe each fee element accurately in the contract and invoice, because a subscription invoiced as a "licence royalty" can stall payment and trigger the supplier's suspension rights.
At a glance
Software is copyright
The Copyright Act 2023 protects software, so every software or SaaS deal is a copyright licence combined with services, support and data terms.
E-delivery import route
Banks may pay for software bought by e-delivery after customs assessment supported by a BASIS certificate; payments outside that procedure need Bangladesh Bank approval.
Service payments consolidated
Bangladesh Bank's master circular of 30 September 2025 consolidated outward remittance rules, including software maintenance, IT infrastructure and subscription payments.
SME card facility
Banks may give SME Foundation-registered businesses an annual remittance facility for bona fide current expenses abroad, including an international card, within set limits.
Banks face cloud controls
Bangladesh Bank's ICT Security Guideline version 4.0 sets cloud expectations for banks, including tested restoration, encryption and key management.
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A SaaS contract Bangladesh businesses sign has to work on three levels: as a commercial deal for software, support and uptime; as a data arrangement that satisfies the Personal Data Protection Act 2026 and any sector rules; and as a payment that a bank can lawfully send abroad. This guide covers licensing, SaaS and cloud terms, support, escrow, open source, AI use and public procurement for Chattogram buyers and suppliers.
The short answer
Software is protected in Bangladesh as a literary work under the Copyright Act 2023, so every software deal is, at its core, a copyright licence wrapped in a services contract. On-premise software is licensed and installed; SaaS and cloud services are accessed as a subscription, with the supplier hosting the system and the customer's data.
The legal risks therefore shift. With installed software, the main issues are licence scope, support and escrow. With SaaS and cloud, they are service levels, data location and security, the supplier's right to change the service, and exit. Running through both is the payment question: Bangladesh Bank has separate routes for software bought by e-delivery, for royalties and technical fees, and for recurring service payments. A SaaS contract Bangladesh banks will pay under describes the service accurately so the right route can be used.
Licence, SaaS or cloud: which model are you buying?
The model affects the contract terms, the payment route and the tax treatment. The table sets out the main differences.
| Model | What the customer gets | Key contract issues | Payment points |
|---|---|---|---|
| Perpetual or term licence (on-premise) | Right to install and use software on its own systems | Scope, users, sites, maintenance, escrow, audit | Software bought by e-delivery follows Bangladesh Bank's import route with BASIS certification and customs assessment |
| SaaS subscription | Access to software hosted by the supplier | Service levels, data location, security, suspension, price changes, exit | Recurring service payments under the outward remittance rules, with VAT and withholding tax |
| Cloud infrastructure (IaaS or PaaS) | Computing, storage and platform services | Shared responsibility for security, data location, regulatory access, encryption keys | As for SaaS; banks also apply ICT guideline controls |
| Custom development | Software built for the customer | Ownership of code, acceptance testing, warranties, open source | Payments to foreign developers are service remittances; local developers raise VAT and withholding |
Many deals mix models: a core licence with SaaS add-ons, implementation services and a support contract. Each element should be described separately in the order form so that the bank, the tax authorities and any later dispute can see what was bought.
Paying foreign software and cloud suppliers
Payment is where a SaaS contract Bangladesh buyers sign most often meets an obstacle. Bangladesh Bank's rules distinguish between types of payment.
Software bought by e-delivery
Bangladesh Bank's import master circular of August 2025 allows authorised dealer banks to pay for software purchased by e-delivery. Customs assessment is arranged on the basis of a certificate from BASIS, the Bangladesh Association of Software and Information Services, confirming that the purchase is genuine and from a reliable supplier. The bank then pays on receipt of the assessment, proof of duties and the supplier's licence or certification. Payments outside this procedure need Bangladesh Bank's prior approval.
Subscriptions and services
The master circular on outward remittances of 30 September 2025 consolidated the rules on service payments, including provisions for IT and software businesses and for items such as software maintenance, IT infrastructure and subscriptions. Royalties, technical know-how and technical assistance fees are treated separately and follow the investment authority's guidelines, now administered by the Invest Bangladesh Authority; see our article on IP licensing and technology transfer.
Small businesses and card payments
In FE Circular No. 38 of October 2025, Bangladesh Bank let banks offer small and medium enterprises registered with the SME Foundation an annual remittance facility for bona fide current expenses abroad, including a refillable international card for online payments, within set limits. Royalties, know-how, technical assistance and franchise fees are excluded. For a small Chattogram business paying a modest monthly subscription, this can be the simplest route.
Tax
Payments to foreign suppliers for services attract VAT on imported services and withholding tax, subject to any treaty relief. The contract should say whether prices include taxes and whether the supplier will gross up. Our VAT practice advises on the treatment of digital services.
Key terms in a SaaS contract Bangladesh customers should negotiate
Global suppliers use standard online terms, so a SaaS contract Bangladesh customers accept is often not negotiated at all. Smaller customers have little leverage, but the following points are worth raising, and larger buyers should insist on them.
Service levels and support
Check how availability is measured, what is excluded, the response and resolution times for support and what service credits are available. Make sure support hours cover the Bangladesh working week, including Saturdays, and that scheduled maintenance does not fall in your peak periods, such as month-end or vessel arrival windows.
Data, security and location
The contract should say where data is hosted, which sub-processors are used, what security standards apply, how quickly the supplier must report a breach and how data is returned and deleted on exit. These terms support compliance with the data protection law, which restricts transfers abroad of more sensitive categories of data.
Changes, suspension and price
Suppliers reserve the right to change features, suspend for non-payment and raise prices on renewal. Seek notice of material changes, a right to terminate if functionality is removed, a grace period before suspension and a cap on renewal increases. Delays caused by foreign exchange approval should not count as non-payment.
Liability and indemnities
Standard terms cap the supplier's liability at fees paid over a short period and exclude data loss. Negotiate higher caps or carve-outs for data protection breaches, confidentiality and IP infringement indemnities. Bear in mind that section 74 of the Contract Act limits recovery under penalty clauses to reasonable compensation, so service credits should be framed as genuine price adjustments.
Exit
Agree how long you will have to export your data, in what format and at what cost, and what transition help the supplier will give. Exit is where SaaS customers most often discover they are locked in.
With SaaS, you do not own the software and you do not hold the data. The contract is the only thing standing between you and the supplier's discretion.
Banks, financial institutions and cloud outsourcing
Banks and financial institutions in Bangladesh follow Bangladesh Bank's Guideline on ICT Security, version 4.0 of which was issued in April 2023. It contains detailed expectations for cloud service providers, including tested backup and restoration, encryption of data at rest and in transit, and management of cryptographic keys in line with the institution's requirements. A SaaS contract Bangladesh regulated entities sign must give the institution the audit, security and exit rights it needs to meet these expectations. Our banking and finance practice advises Chattogram institutions on outsourcing.
Escrow, open source and AI
Source code escrow
For business-critical installed software from a small supplier, an escrow arrangement lets the customer obtain the source code if the supplier fails or stops supporting the product. Define the release events, require regular deposits of up-to-date, buildable code and test the deposit. For SaaS, escrow is less useful unless the hosting environment and data can also be recovered.
Open source
Most software includes open source components. Permissive licences impose few conditions, while copyleft licences may require derivative software to be shared on the same terms. Customers commissioning software should ask for a list of open source components and a warranty that their use complies with the relevant licences. Developers should track licences from the start.
Artificial intelligence
AI features raise contract, data and IP questions. Ask whether your data or prompts will be used to train the supplier's models, where the processing happens, who owns outputs, and what the supplier warrants about accuracy and infringement. These questions are governed mainly by the contract, the data protection law and copyright law, so write the answers into the order form or a data processing addendum.
Public procurement and selling to government
Software and cloud contracts with government bodies, state-owned enterprises and statutory authorities in Chattogram follow the public procurement framework under the Public Procurement Act 2006, which Parliament amended in 2026, and the related rules and standard documents. Suppliers must follow the tender process, and contract terms are largely fixed by the standard documents. Bidders should check data location, IP ownership and payment terms in the tender carefully before bidding, because they are hard to change afterwards.
Bangladeshi suppliers selling abroad
The same issues arise in reverse for Chattogram and Dhaka software houses selling to foreign customers. A SaaS contract Bangladesh suppliers offer overseas should name the governing law, cap liability realistically, set out data processing terms that meet the customer's own law, and make sure fees arrive through banking channels so that export receipts can be repatriated and reported correctly. Foreign customers will often ask for security certifications and audit rights; plan for these before signing the first large deal.
How to put a software or SaaS deal in place
- Define the need. Identify the business process, the data involved, the users and the systems the software must connect to.
- Assess suppliers. Check security certifications, hosting locations, financial strength, local support and references.
- Check the payment route. Confirm with your bank whether the purchase is an e-delivery import, a service payment or a royalty, and what documents it needs.
- Negotiate the terms. Focus on service levels, data, changes, liability and exit, and add a data processing addendum.
- Sign and stamp. Confirm authority, execute electronically or on paper, and pay stamp duty where it applies.
- Implement and accept. Test against agreed criteria before accepting, and keep records of defects.
- Manage the contract. Track renewals, price changes, service credits and sub-processor notices.
Before signing, ask your bank's foreign exchange desk how it will treat the first invoice. If the supplier's invoice describes a "licence royalty" when the deal is really a subscription, or bundles implementation, support and licence fees together, the bank may refuse to remit until the documents are corrected.
An illustrative scenario
This example is illustrative only and does not describe any real business.
A Chattogram logistics company subscribes to a foreign warehouse management platform. The supplier's online terms allow it to suspend service after a short payment delay, host data in any region and cap liability at one month's fees. The first invoice is labelled "software licence royalty".
The company negotiates an order form that describes the service as a subscription, adds a grace period for payments delayed by foreign exchange processing, names the hosting region, requires breach notice within a fixed period and allows data export in a standard format for sixty days after termination. The supplier reissues the invoice correctly, and the company's bank processes the payment as a service remittance with tax deducted.
Risks and common mistakes
Clicking through standard terms for critical systems
Online terms suit low-value tools, but they are risky for systems that run the business, such as ERP, warehouse or customer platforms. They usually allow unilateral changes, short suspension periods and minimal liability. For critical systems, negotiate an order form or addendum covering service levels, data, suspension and exit, even if the supplier will not change its main terms.
No ownership of custom code
Under the Copyright Act 2023, the developer may own code it writes unless the contract says otherwise. Businesses that commission apps or integrations from freelancers or agencies often find they cannot modify or move the code. Take a written assignment of copyright, require delivery of source code and documentation, and confirm open source compliance. Our intellectual property practice drafts these terms.
Ignoring data location
Moving customer or employee data to a foreign cloud without checking the data protection rules, sector guidelines and the supplier's sub-processors can leave the business in breach. Map the data first, confirm where it will be hosted and whether any category must remain in Bangladesh, and write the answers into the contract. Plan for breaches as well; see our guide to data breach response.
Mislabelled invoices and payment delays
When invoices do not match the contract or the payment route, banks delay remittance and suppliers threaten suspension. Align the contract description, the invoice wording and the bank's requirements before the first payment, and agree that delays caused by regulatory processing are not a payment default.
Checklist before you sign
- The delivery model and each fee element are clearly described.
- The bank has confirmed the payment route and documents.
- Service levels, support hours and credits suit Bangladeshi operations.
- Data location, sub-processors, security and breach notice are agreed.
- Suspension, change and renewal price terms are acceptable.
- Liability caps and indemnities reflect the real risk.
- Ownership of custom code, open source compliance and AI use are covered.
- Exit, data export and transition support are defined.
A SaaS contract Bangladesh law and banks support protects both the operations and the data that depend on it. TRW & Co's Chattogram office reviews and negotiates software, SaaS and cloud contracts for buyers and suppliers, with our commercial contracts team and foreign exchange practice working together on payment routes. The Chattogram office hub lists our other services. Contact us at info@trw.co or +880 1779 127165.
Frequently asked questions
01How do Bangladeshi companies pay for foreign SaaS subscriptions?
Through an authorised dealer bank under Bangladesh Bank's outward remittance rules, consolidated in a master circular of September 2025, or by international card within the limits that apply. Small and medium enterprises registered with the SME Foundation can use an annual remittance facility for bona fide current expenses, including a refillable card. The bank will want the contract or order form, the invoice and evidence of VAT and withholding tax. Make sure the invoice describes a subscription accurately rather than a royalty.
02Is software bought online treated as an import?
Software purchased by e-delivery has its own route under Bangladesh Bank's import circular. Customs assessment is arranged on the basis of a BASIS certificate confirming the purchase is genuine, and the bank pays after receiving the assessment order, proof of duties and the supplier's licence or certification. Payments outside that procedure need Bangladesh Bank's prior approval. SaaS subscriptions, where nothing is installed, are usually treated as service payments instead.
03Can a Bangladeshi bank use a foreign cloud provider?
Banks and financial institutions may use cloud services subject to Bangladesh Bank's Guideline on ICT Security and any specific approvals or conditions that apply. The guideline sets expectations on backup and restoration, encryption of data at rest and in transit and key management. The data protection law's transfer restrictions also apply. The contract must give the bank the audit, security, data location and exit rights needed to meet these requirements.
04Who owns software developed for my business?
Not necessarily you. Under the Copyright Act 2023, ownership depends on who created the work and what the contract says. Code written by employees in the course of employment is treated differently from code written by independent developers or agencies, who may keep copyright unless they assign it. Take a written assignment, require delivery of source code and documentation, and ask for a list of open source components and confirmation of licence compliance.
05Should a SaaS contract be governed by Bangladeshi law?
Global suppliers usually insist on their own law and courts, and small customers rarely change that. Larger buyers can negotiate, and Bangladeshi law with arbitration or the Chattogram commercial courts may suit a local supplier relationship. Whatever the governing law, Bangladeshi rules on data protection, foreign exchange, tax and stamp duty still apply. Focus negotiation on the terms that matter most in practice: service levels, data, suspension, liability and exit.
Sources and official materials
- Bangladesh Bank FE Circular No. 33 (14 August 2025) — Import master circular, including remittance for software bought by e-delivery
- Bangladesh Bank FE Circular No. 37 (30 September 2025) — Master circular on outward remittances, including service and IT payments
- Bangladesh Bank FE Circular No. 38 (5 October 2025) — Remittance and card facility for SMEs
- WIPO Lex: Copyright Act 2023 (Bangladesh) — Copyright in computer programs, ownership and licensing
- BASIS — Bangladesh Association of Software and Information Services, certificates for e-delivery software
General information only, current as at 27 October 2026. It is not legal advice and does not create an advocate–client relationship. It reflects the law of Bangladesh unless stated otherwise, and the law, court practice and official fees change frequently. Check current official sources and take advice on the facts of your matter.
