Legal recognition of electronic and digital signatures in Malaysia

​Malaysia legally recognizes both electronic and digital signatures, each governed by a specific legislation—the Electronic Commerce Act 2006 (“ECA”) for electronic signatures and the Digital Signature Act 1997 (“DSA”) for digital signatures. While both carry the same legal effect as "wet-ink" signatures, they must meet specific requirements to be valid.

       

Under the ECA, an electronic signature is defined as “any letter, character, number, sound or any other symbol or any combination thereof created in an electronic form adopted by a person as a signature”. An electronic signature must be logically associated with the document, adequately identify the signer, indicate intent, and be reliable considering the purpose and circumstances under which the signature is to be used. 

    

The DSA, on the other hand, adopts a narrower interpretation and defines a digital signature as a cryptographic transformation of a message, valid only if generated and verified by a licensed certification authority and used with proper intent and security. As of the date of publication of this article, the Malaysian Communications and Multimedia Commission has only issued licenses to the following four certification authorities:

      

Certain documents, including wills, trusts, powers of attorney, negotiable instruments, and property dealings under the National Land Code, cannot be signed electronically. Additionally, notarized or attested documents for which relevant laws mandate signing in the presence of a notary public must be physically signed, and electronic signatures are not accepted in those cases.

   

Practical concerns remain, particularly regarding whether electronically signed agreements will be accepted for stamping by the Inland Revenue Board of Malaysia (“IRBM”)—a requirement for the admissibility of certain legal documents in court. Although our experience has shown acceptance of electronically signed documents by IRBM in several cases, in particular with the stamping process having been entirely digitalized, the absence of clear official guidelines in that regard leaves some uncertainty. We will continue monitoring and timely report about any developments in this area.