One developer can stop an investment round. How can a startup in Kazakhstan secure software rights?

This text is for informational purposes and reflects the law of Kazakhstan as of August 5, 2026. Before applying the recommendations, it is necessary to verify the circumstances of a specific project.

Chingis Oralbaev, LL.M. | Managing Partner of SOLIS Partners LLP

An investor checks not only revenue, the team, and the corporate structure. If the main value of the business lies in the software product, one of the first due diligence questions is simply: “Which specific company owns the code, and how will it prove this?”

The answer: “We paid for the development,” does not always work. Nor do answers like: “The author is on the payroll,” “The repository is registered to the company,” or “We have a certificate.” Each of these facts is important, but none replaces a continuous chain of rights.

A typical defect arises long before the investment deal. The founder creates the MVP before registering the LLP. After launch, in-house engineers, freelancers, and an external studio join the project. The code is rewritten several times, and open-source libraries and AI-generated fragments enter the product. Documents are prepared only for payment of services. Two years later, one of the participants leaves, registers the program in their own name, or refuses to sign confirmation of the transfer of rights. For an investor, this is not a personal conflict—it is the risk that the acquired company does not control its main asset.

The chain begins before the company appears

A legal entity cannot automatically obtain rights to a program created before its existence. If the MVP was written by the future founder, CTO, or a hired developer before the startup’s state registration, initial rights arise with the individual authors.

After the company is created, it is necessary to transfer to it in writing the exclusive property rights and the entire development package: source code, documentation, databases, design, domains, cloud accounts, package registry, app stores, and other infrastructure elements. The author’s share in the company does not replace such a transfer. Even owning a controlling stake does not answer the question of who owns the program.

At an early stage, it is useful to create an IP inventory: who, when, and in what capacity created each significant component. This simple registry often reveals gaps before their elimination acquires a separate negotiating price.

The regime of a service invention applies to employees—but not automatically

Kazakhstani law distinguishes between the author and the owner of exclusive rights. The author remains the physical person whose creative labor created the result. The author’s personal non-property rights are not alienated. At the same time, Article 14 of the Law of the Republic of Kazakhstan “On Copyright and Related Rights” provides that exclusive property rights to a work created while performing job duties or a service assignment of the employer belong to the employer, unless the parties have agreed otherwise.

From this follow two important conclusions:

1. A separate assignment agreement for each commit of an in-house developer is usually not required if the specific result is a service invention and the contract does not change the legal regime.
2. Employee status alone is insufficient. The company must prove the connection between the disputed development and the employee’s job function or the employer’s assignment. A laptop, salary, working hours, and corporate server confirm the context, but without a described function or assignment, they may not resolve the issue.

Therefore, a technology company needs not abstract job titles, but a functioning system of documents:

— the employment contract defines the general rights regime and the employee’s obligations;
— the job description outlines the types of results created;
— the IP policy establishes the corporate development process;
— a service or product assignment is recorded in an accepted digital channel;
— the repository and tracker link the task to a specific contribution;
— acceptance and release confirm the inclusion of the result in the company’s product.

If an employee brings a previously created library or personal project, this should be disclosed before integration. The company must either obtain the corresponding rights or documentally separate such a component from service development.

A contractor does not become an employee just because they sit in the same Slack

A freelancer and a studio have a different starting point. Payment for development gives the customer the result in a factual sense, but not necessarily the full volume of exclusive rights. An NDA protects confidentiality. An acceptance act confirms performance and acceptance. Neither document alone replaces a written disposition of copyright.

In a contract with an individual author, it is necessary to define the object, specific methods of use, the exclusive nature of the transferred rights, term, territory, remuneration, and the moment of transfer. For a software product, rights to reproduce, adapt, modify, integrate, distribute, provide access under a SaaS model, transfer rights, and issue licenses are usually required.

If the development is performed by a legal entity, an additional question arises: did it obtain rights from its employees, authors, and subcontractors? A reliable chain looks like this: individual author — contractor — customer. A studio’s guarantee that “we have the right to transfer the code” is useful, but in a significant transaction, an investor may request supporting contracts and a list of participants.

The contract must also regulate the involvement of subcontractors, source materials, third-party libraries, open-source licenses, AI tools, documentation, guarantees of originality, and the procedure for resolving third-party claims.

A certificate records information but does not replace Due Diligence

Copyright for a program in Kazakhstan arises upon its creation, without mandatory registration. The state registry is used to record information, and the issued certificate confirms their entry.

This is a useful element of the evidence system, but not a final answer to the question of rights. Registration in the name of an individual does not exclude the possibility that property rights to a service invention belong to the employer. Conversely, registration in the name of a company will not fix a broken contractual chain if the code was obtained from a contractor without proper transfer of rights.

Current Registry rules require an abstract and source code for a program, and for a service and derivative work—additional documents confirming the basis of rights. Before submission, it is important to check whether the applicant has the right to disclose the corresponding code and whether registration complies with the trade secret regime.

Software should not be called patented solely due to the presence of a record in the copyright registry. Patent mechanisms and copyright protection solve different tasks.

A rewritten product may remain derivative

Startups often change their stack and architecture. However, switching to another programming language does not prove that the new version is legally independent. If protected elements of the original development are retained, the new version may be the result of adaptation.

The author of a derivative work owns their contribution provided that rights to the original are respected. Therefore, version history must answer not only engineering questions but also legal ones: on what basis was the release created, which elements were used, who provided them, and what rights were in effect at the time of adaptation.

In the event of a dispute, it is important to separate form from idea. Copyright does not protect the function of a service, method, process, principle, or fact. A similar user scenario does not mean copying. It is necessary to compare specific versions of source and object code, their structure, and development history, excluding common libraries, template elements, and automatically generated code.

A trade secret does not appear from the label confidential

Source code can be protected simultaneously by copyright and the trade secret regime. For the second mechanism, it is not enough to call information secret after a conflict arises. The company must take real measures in advance: approve a list of protected information, define access levels, account for those who have access, establish storage and export rules, sign non-disclosure obligations, and journalize critical actions.

Engineering practice must correspond to documents. Personal cloud, a shared team password, unlimited repository export, and retaining access after dismissal weaken the position of the trade secret owner regardless of the quality of the NDA.

What an investor will see in the data room

Instead of a single “contract with the developer,” an investor usually looks for a coordinated system of evidence:

1. Registry of products, versions, authors, and rights holders.
2. Employment documents and IP policy.
3. Contracts with freelancers, studios, and subcontractors.
4. Assignments, tracker, and repository history.
5. Acceptance acts and releases.
6. Registry of third-party components and licenses.
7. Documents on the transfer of the early MVP to the company.
8. Registry certificates and materials on the basis of which they were obtained.
9. Trade secret and access rules.
10. Confirmation of offboarding and transfer of control over infrastructure.

If documents are insufficient, the problem is better fixed before the term sheet. At the time of the deal, the former developer understands that their signature affects the closing of the round, and the investor may demand a valuation reduction, holdback of part of the price, special warranties, or elimination of the defect before closing.

A legally ready startup is not a company with the largest archive of contracts. It is a business that can show without guesswork the origin of every significant version of the product and the basis on which exactly this company has the right to use, modify, and transfer it to an investor.