Legality and enforceability of electronic signatures in Malaysia*

What Is an Electronic Signature in Malaysia?

There are two main laws that regulate the use of electronic signatures in Malaysia: the Digital Signature Act of 1997 (“DSA”), which provides specifics on the usage of digital signatures, and the Electronic Commerce Act of 2006 (“ECA”), which generally regulates the use of electronic signatures.

DSA defines a digital signature as a transformation of a message using an asymmetric cryptosystem that can accurately determine:

Whether the transformation was created using the private key that corresponds to the signer’s public key; and
Whether the message has been altered since the transformation was made.

At the same time, the ECA defines an electronic signature as any letter, character, number, sound, or any other symbol or any combination thereof created in an electronic form and adopted by a person as a signature.

The main difference between a digital signature and an electronic signature is that a digital signature must be based on asymmetric cryptography, e.g., PKI technology.

Digital Signature Requirements

In general, the DSA provides the following requirements for the digital signature in Malaysia:

The digital certificate can verify if any changes were made to the document after it was signed.
The digital certificate is issued by a certification authority licensed in Malaysia.
The certificate can verify the fact that the document was signed by a signatory.
The signer executed a signature with the intention of signing the document.
The recipient of the document has no knowledge or notice that the signer has breached the signatory’s duties under the DSA or unrightfully holds the private key used to execute the digital signature.

Digital signature services of the provider certified outside of Malaysia can be recognized as valid in Malaysia; however, for that, the provider must meet a rather high requirements threshold:

Meets the requirements for certified authorities issued by the Malaysian Malaysian Communications & Multimedia Commission.
The provider is established in a country that has entered into an international treaty, agreement, or convention with Malaysia for the mutual recognition of digital signature certificates.

The signatures provided through the SignNow eID Easy integration satisfy the requirements for advanced electronic signatures in Malaysia.

Electronic Signature Requirements

Electronic signatures in Malaysia must meet the following criteria:

The signature must be attached to or logically associated with the signed document;
It must adequately identify the signer.
The signer’s approval of the information related to the signature needs to be adequately indicated.
The signature must be reliable and appropriate for the purpose and circumstances in which it was used.

According to the law, the electronic signature is reliable and appropriate if it meets the following criteria:

The means of creating the electronic signature are linked to and under the control of only the signer.
Any alteration made to the electronic document or electronic signature after the time of signing is detectable.

Default SignNow electronic signature qualifies as an electronic signature in Malaysia.

Do You Need to Have a Consent to Use Electronic Signature?

Yes. The ECA mandates that parties must consent to the use of electronic signatures. Without such consent, the document may be deemed non-binding. Therefore, it's crucial to include a clause in any commercial contract that you intend to sign using an electronic signature.

Electronic Signature Validity in Courts

Malaysian courts acknowledge and accept electronic signatures, provided that all legal requirements are met. Courts recognize any mark that identifies the act of the party or some distinguishing feature peculiar to the person as an electronic signature. However, it is important to note that if a document requires a seal under Malaysian law, only a digital signature is permitted in such a case.

Use of Electronic Signatures in Transactions With State Authorities

In transactions involving government agencies, an electronic signature can be used only if both parties consent to use, provide, and accept electronic documents. Each government entity may also adopt its internal rules for the use of electronic signatures in transactions belonging to its area of responsibility.

When the Use of Electronic Signature is Prohibited

Malaysian laws prohibit the use electronic signatures in the following cases:

To sign power of attorney.
To execute wills, codicils, and trusts.
To sign negotiable instruments, bills of exchange, and promissory notes.
To execute documents related to property governed by the Malaysian National Land Code.
To sign Statutory Declarations under the Statutory Declarations Act.

* Disclaimer: This page is for informational purposes only. This page provides a background on the legal framework for electronic signatures in the respective country. This page is not legal advice and should not be used or relied upon as legal advice. You should seek legal counsel regarding any legal questions you have regarding the use of electronic signatures in this jurisdiction. To the maximum extent permitted by law, airSlate provides this page and the material on this page on an “as-is” basis. airSlate disclaims and makes no representation or warranty of any kind with respect to this page or the material on this page, express, implied, or statutory, including representations, guarantees, or warranties of merchantability, fitness for a particular purpose, or accuracy.

Last updated: September 2024