I am not quite clear what you mean by
I'll own the application as part of my freelancing business but will be selling the development of it to him.
I presume that what you will actually be doing is licensing the application to him, after he pays you to develop it.
You and your associate will need to work out the terms of the license. For example, does he pay a recurring fee for the use of the application, or only a one-timer fee? Do you retain the right to license the application to others as well, or is the license exclusive? Do you promise continued maintenance or the development of additional features? If so, on what basis? Is the license permanent, or do you have the right to cancel it on some amount of notice? Or perhaps it lasts for a fixed but limited period? You will want to come to an agreement on these and similar questions, and you may want to have a lawyer draw up the agreement in writing. If not, you should put it in writing yourselves, to clarify your agreement in case of future disputes. There are various published templates for such agreements available.
If there is continued payment, no doubt that will need to be reported to the tax authorities.
Assuming that you are not becoming a partner in the business, and that the business is lawful as far as you know, the details of the business need not concern you, to the best of my understanding. That is, you do not have to prepare or file any paperwork that your associate may need as a consequence of doing business in another country. Just as Microsoft does not need to worry about the legality of any documents that soemoen creates using Word, or about paperwork for any business run using Excel
