For US businesses

Offshore Software Development for US Companies: A Practical Guide

AI Dev Planner is a software and AI development team in Islamabad, Pakistan. We do not have a US office. This guide is for US founders and companies weighing an offshore team: how to work across the time difference, what a US contract needs to say about IP, which privacy and security questions come up, and how payments and tax forms work.

General information, not legal or tax advice. See the offshore software development overview for how the model works worldwide.

The short answer

Working with a team in Pakistan from the US means almost no shared office hours, so the project has to run on writing: a clear scope, decisions recorded in a shared channel, and working software you can check every two weeks. On the contract side, do not rely on a “work made for hire” clause alone for software written by a contractor; include a signed copyright assignment. If the product touches health data or falls under a state privacy law, settle those terms before the build starts.

Time zones: ET, CT and PT against Islamabad

Islamabad is UTC+5 all year. US daylight saving time runs from the second Sunday in March to the first Sunday in November (NIST, accessed 17 October 2026), so the gap shrinks by an hour in the US summer. Where two values are shown below, the first applies in US winter (standard time) and the second in US summer (daylight time).

If both sides kept a 09:00 to 17:00 day, there would be no overlap at all with any of these zones. The last column shows what an 08:00 call on the US side means in Islamabad, as an example of where a short shared slot can sit. It is not a statement of our working hours: meeting times are agreed at the start of each project.

Time difference between Islamabad and US Eastern, Central and Pacific time, winter and summer
US time zone	Offset (winter / summer)	Islamabad is ahead by	Example early-morning call
Eastern (New York, Atlanta, Miami)	EST UTC−5 / EDT UTC−4	10 h / 9 h	08:00 ET is 18:00 / 17:00 in Islamabad
Central (Chicago, Dallas, Houston)	CST UTC−6 / CDT UTC−5	11 h / 10 h	08:00 CT is 19:00 / 18:00 in Islamabad
Pacific (Los Angeles, San Francisco, Seattle)	PST UTC−8 / PDT UTC−7	13 h / 12 h	08:00 PT is 21:00 / 20:00 in Islamabad

The time difference also has an upside that US clients sometimes plan around: work handed over at the end of the US day can be reviewed or fixed before the next US morning. That only works if the handover is written well, which is why the practices below matter more than the hours.

Making a no-overlap schedule work

With US clients the shared slot is short, so most communication is written. These practices keep decisions moving. Each project also gets a dedicated Slack channel with direct access to the engineers building the product.

Write the decision, not just the meeting
Each call ends with the decisions and open questions written in the shared channel. Whoever starts their day next works from that note, not from memory.
Ask questions before you sign off for the day
A question posted at the end of the US day can be answered by the time Islamabad starts, and the reverse. A question posted mid-afternoon in either place can cost a full day.
Recorded walkthroughs
Every two weeks you get a video walkthrough of working software. Recording it means stakeholders on the West Coast or travelling can watch it on their own schedule.
A named decision-maker on your side
Offshore projects stall when nobody on the client side can approve a change. Name one person who can, and a deputy for when they are away.
Plan around the March and November changes
US clocks go forward on the second Sunday in March and back on the first Sunday in November. Pakistan does not change, so the recurring call moves by an hour for us twice a year.

Contracts and IP: work made for hire is not enough on its own

Many US templates describe a contractor’s output as a “work made for hire”. The US Copyright Office explains that a work is made for hire in two situations: when an employee creates it within the scope of employment, or when a specially ordered or commissioned work falls into a specified category and is covered by a written agreement (Circular 30). When a work is made for hire, the hiring party is considered the author and owns the copyright (17 U.S.C. § 201(b)).

The catch for software is in the list. Under the definition in 17 U.S.C. § 101, a commissioned work by a non-employee qualifies only if it is a contribution to a collective work, part of a motion picture or other audiovisual work, a translation, a supplementary work, a compilation, an instructional text, a test, answer material for a test, or an atlas, and the parties expressly agree in a signed written instrument that it is a work made for hire (US Copyright Office, Title 17 Chapter 1). A standalone application written by an offshore company is not in that list, and the offshore company’s engineers are not your employees.

That is why US software contracts with contractors usually include an explicit assignment as well. A transfer of copyright ownership is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights (17 U.S.C. § 204(a), US Copyright Office, Title 17 Chapter 2). All accessed 17 October 2026.

Our terms of service say that bespoke source code, database designs and associated assets are assigned to the client once the contractual milestones under the statement of work are met, with no recurring licence fees. The signed master services agreement and statement of work govern the details, so ask for the exact wording and have a US attorney review it.

Contract clauses a US company should include when outsourcing software development offshore
Clause	Why it matters
Copyright assignment, signed	A transfer of copyright ownership is not valid unless it is in writing and signed by the owner of the rights (17 U.S.C. § 204(a)).
Work-made-for-hire wording, if used, with an assignment as well	Commissioned software usually falls outside the nine statutory categories, so a work-for-hire clause alone may not give you ownership.
Pre-existing materials and open source	Lists what the supplier reuses, the licence you get to it, and the open-source licences your product depends on.
Governing law and dispute venue	Decides which court or arbitration forum hears a dispute. Ask your attorney what you could realistically enforce against a supplier outside the US.
Confidentiality	Covers your requirements, data and business logic shared during scoping and the build.
Data protection terms	A business associate agreement if PHI is involved; service provider or contractor terms if a state privacy law such as the CCPA applies.
Security requirements and subcontracting	Sets how credentials and access are handled, and stops work or data passing to unnamed third parties.
Termination and handover	What you receive if the contract ends early: code, documentation, credentials and a defined handover period.

Privacy and security: HIPAA, state laws and SOC 2

The US has no single federal privacy law covering every product. What applies depends on your sector, your users and where they live. Three questions come up most often when US companies outsource development.

Will the team touch protected health information?

If you are a HIPAA covered entity or business associate, HHS explains that the Privacy Rule requires written satisfactory assurances, in a contract or other written agreement, from a business associate that handles protected health information (PHI) on your behalf (HHS, business associates). HHS’s sample provisions also require a business associate to flow the same restrictions down to any subcontractor that handles PHI (HHS, business associate contracts).

The simplest control is design: build and test on synthetic data, keep PHI in hosting your organisation controls, and give the development team no access to production PHI unless there is a specific, agreed reason. If access is genuinely needed, the business associate agreement and the access arrangements are things to agree in writing before the build starts. We do not claim HIPAA compliance on this page.

Does a state privacy law apply?

California’s Consumer Privacy Act (CCPA), as amended by Proposition 24 in November 2020, is implemented and enforced by the California Privacy Protection Agency (CPPA, laws and regulations). The agency says the CCPA applies to for-profit businesses that do business in California and meet at least one threshold, such as gross annual revenue of $26,625,000 or more in the preceding calendar year (as adjusted from 1 January 2025), buying, selling or sharing the personal information of 100,000 or more California residents or households, or deriving 50% or more of annual revenue from selling or sharing it. It also places obligations on service providers and contractors that process personal information for a business (CPPA FAQs, both accessed 17 October 2026). Other states have their own privacy laws, so check which apply to your users with your counsel, and put the required service provider terms into the development contract.

Will your customers ask for SOC 2?

SOC 2 is an attestation report from a CPA firm on a service organisation’s controls relevant to security, availability, processing integrity, confidentiality or privacy. The AICPA describes SOC reports as assurance reports that help users assess the risks of outsourcing (AICPA & CIMA, accessed 17 October 2026). Enterprise customers of US SaaS companies often ask their vendors for one, and that affects you in two ways: whether your own product will need a SOC 2 report later, which shapes logging, access control and change management from the start; and whether your procurement requires one from your development supplier. We do not claim SOC 2 attestation on this page; if it is a hard requirement for your suppliers, ask us before scoping. Our security practices are described on our trust page.

Payments and US tax forms for a foreign supplier

When a US company pays a foreign supplier, its accounts team will usually ask for a Form W-8 rather than a W-9. The IRS says Form W-8BEN-E is used by foreign entities to document their status for chapter 3 and chapter 4 purposes (IRS, About Form W-8BEN-E). The instructions say the foreign entity gives the form to the withholding agent or payer that requests it, and that it should not be sent to the IRS. Foreign individuals generally use Form W-8BEN or Form 8233 instead, and US persons use Form W-9 (IRS, Instructions for Form W-8BEN-E, both accessed 17 October 2026).

Which form applies, and how the payment is treated for withholding and reporting, depends on the facts. Ask your accountant or tax adviser; this page does not give tax advice.

Commercial points to agree in the contract, with us or any offshore supplier:

Currency. Our published planning ranges are in GBP. Agree the invoicing currency for your project explicitly.
Fees. International transfers can carry bank and conversion charges. State in the contract who bears them.
What each payment buys. Tie payments to delivered sprints or milestones you can see working, rather than to calendar dates.
Discovery as its own step. A discovery phase with written outputs lets you stop after it with documents you own, if the build is not right for you.

For an indicative range for your product, use the free MVP cost calculator.

How US companies work with us

Scope first. A discovery phase maps workflows, data model and integrations, then fixed 2-week sprint costs are set against the agreed scope.
Or join your team. Our engineers can work inside your Git workflow, code review standards and Jira or Linear sprint cycle.
Visible progress. A dedicated Slack channel and a video walkthrough of working software every two weeks.
Your accounts. We recommend the repository lives in your GitHub or GitLab organisation from day one, with hosting in a US region of a cloud account you control.
After launch. A 60–90 day warranty covers defects in what we delivered.

We are probably not the right partner if:

you need people on site in the US, or long daily meetings during US business hours;
your contracts or customers require that only US-based personnel can access your systems or data;
every supplier must already hold a SOC 2 report or another specific certification;
you need a fixed quote before anyone has looked at the scope.

Related guides

Offshore software development FAQs for US companies

Do you have a US office or US entity?

No. Our engineering team is based in Islamabad, Pakistan, and we work with US companies remotely. We do not have a US office, and this page does not claim US registration, SOC 2 attestation or HIPAA compliance.

How do we work across a 9 to 13 hour time difference?

There is no overlap between a 09:00 to 17:00 day in Islamabad and one anywhere in the continental US, so one side shifts part of its day. A common pattern is a short call early in the US morning, which is evening in Islamabad, with everything else handled through written handoffs, a shared channel and recorded walkthroughs. Agree the meeting slot and who shifts at the start of the project.

Is code written by an offshore contractor a work made for hire?

Usually not on its own. Under 17 U.S.C. § 101, work by someone who is not your employee is a work made for hire only if it falls into one of nine listed categories of commissioned work and both parties sign a written agreement saying so. Standalone software is not one of the listed categories, so US contracts with contractors normally include a signed written assignment of copyright as well. Take advice from a US attorney on the wording.

Can you sign a HIPAA business associate agreement?

If the work requires access to protected health information, HIPAA requires written assurances, typically a business associate agreement, and that is something to raise and agree in writing during scoping. Many health products can be built and tested without the development team ever accessing real PHI, which is the safer design in any case. We do not claim HIPAA compliance on this page.

Do you have a SOC 2 report?

We do not claim SOC 2 attestation on this page. If your procurement process requires a SOC 2 report from every vendor, ask us directly before you invest time in scoping, and ask any other supplier the same question. Our security practices are described on our trust page.

Which IRS form does a foreign software company give a US client?

A foreign entity typically documents its status with Form W-8BEN-E, which it gives to the withholding agent or payer that requests it, not to the IRS. A foreign individual would generally use Form W-8BEN instead, and a US person uses Form W-9. How the payment is treated for US tax purposes is a question for your tax adviser.

Do you quote in US dollars?

Our published planning ranges are in GBP. The invoicing currency, payment schedule and who bears transfer and conversion fees are agreed in the contract for each project, so raise them during scoping.

Sources

All sources accessed 17 October 2026. This guide is general information, not legal or tax advice.

NIST: Daylight Saving Time — US daylight saving time starts on the second Sunday in March and ends on the first Sunday in November.
US Copyright Office: Circular 30, Works Made for Hire — The two situations in which a work is made for hire, and that the hiring party is then the author.
US Copyright Office: Title 17, Chapter 1 (17 U.S.C. § 101) — The statutory definition of a work made for hire and the categories of commissioned work it covers.
US Copyright Office: Title 17, Chapter 2 (17 U.S.C. §§ 201, 204) — Ownership of works made for hire, and that a transfer of copyright must be in writing and signed.
HHS: Business Associate Contracts — Sample business associate agreement provisions, including the flow-down to subcontractors.
HHS: Business Associates — A covered entity must obtain written satisfactory assurances from a business associate that handles PHI.
California Privacy Protection Agency: FAQs — Which businesses the CCPA applies to, the current revenue threshold, and obligations on service providers and contractors.
California Privacy Protection Agency: Laws and regulations — Proposition 24 amended the CCPA and created the agency that implements and enforces it.
AICPA & CIMA: SOC for service organizations — SOC reports as assurance reports on a service organisation's controls, used to assess outsourcing risk.
IRS: About Form W-8BEN-E — Form W-8BEN-E is used by foreign entities to document their status for chapter 3 and chapter 4 purposes.
IRS: Instructions for Form W-8BEN-E — The form goes to the withholding agent or payer, not the IRS; individuals use Form W-8BEN; US persons use Form W-9.

Check the fit before you scope

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