UAE financial free zones adopted electronic signatures after COVID 19


It was in 2000 when the first law was passed in the USA authorizing the use of electronic signatures in almost every sector of the economy. Since that year, the use of electronic signature software has increased not only in the US but also across the globe. The UAE is one such nation that is always ahead when it comes to the use of advanced technologies. As a result, many financial institutions in the UAE financial-free zones are heavily dependent on the use of e-signature solutions and the use is increasing. Features of E-signature solutions are helping these institutions to do better.

The present COVID-19 crisis has proved that technology is the only way forward. Let us consider the validity and applicability of digital signatures under applicable laws.

Due to the COVID-19 situation, most of the working population had to stay at home and work from there. This adds to the challenges of the financial institutions, especially those which involve lots of data handling, management, and storage; and all of these activities have to be done as per the regulatory norms. Financial institutions have to enter into multiple agreements with a number of people, /entities on a regular basis, and all these records have to be stored safely at a place where only those with a private key can access and every activity by any member is tracked and viable to others.

Here is the overview of the legal frameworks operating in the Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC) when it comes to the use of digital signatures. Let us consider it in light of the UAE regime outside the financial free zones.

Meaning of an electronic signature?

Digital signatures or electronic signatures are available in many forms.

A signature that is typed on a document and email.

It can be a scanned image of an actual signature of the concerned person, pasted on the document.

It can be a signature made on the document using a web-based or mobile-based app, with the help of a stylus or finger.

An activity like clicking the checkbox can be considered a signature.

Any secure signature made on a document using an authorized electronic signature software that encrypts the signed document and is then validated by a third-party certifier who is the witness of the signature.

a digital signature authorized with the help of a unique encrypted key that is connected to the document.

Dubai International Financial Centre (DIFC)

DIFC law permits the use of electronic signatures under certain conditions. Though there are a few exceptions. The law ensures the authenticity, enforceability, and legal effect of electronic signatures and agreements made through electronic communications.

What is valid Under DIFC law?

The law doesn't specify any particular definition of electronic signatures when it comes to Electronic transaction law. The term "Electronic Signature" is defined very typically under the law which contains different signature forms like electronic sound, image, process, etc. These forms of signatures are either attached to or associated with the documents or are made by a person with the intent to sign the document. In short, if you scan an image of the signature and paste it on the document, it will be considered an electronic signature and hence will be backed by the law of the land.

A digital signature can be connected to the person who has signed it if the signature made is the act done by the person. However, not every document can be signed by Electronic Signature software. As per the law, documents like powers of attorney, wills, affidavits, declaration of trust, etc that are used in the DIFC court and property transactions are excluded from the application of electronic transactional law.

Can Financial Institutions Rely on Electronic Records?

An "Electronic Record" is any record that is made, stored, or transmitted in electronic form. As per the ETL, any record is an Electronic Record if the following criteria are present:

If the record stores and maintains the information and it is available for printing.

If the record is maintained in the original form or in a form that can accurately reflect the data that the record contains.

If the record retains the data in terms of its origin (date and time).

Additionally, the sharing of Electronic Records is enough to form a valid contract under the law.

Read the blog- What Are The Benefits Of E-Signly For Small And Medium-Sized Businesses?

How Electronic Signatures are treated as per the ADGM law?

Abu Dhabi Global Market (ADGM) has not spoken or issued any regulations or laws to deal with the validity of digital signatures. Hence, if the specificity of ADGM law is not applicable, the English law would be considered to understand the validity of electronic signatures.

If the record or the validity of the digital signature has to be implemented then the key elements of offer, intention to build legal relation, acceptance & consideration, and firm and transparent terms and conditions must be present on the document. These criteria have to be met irrespective of the technology or software being used to perform the electronic signature and form the contract. Hence, as a smart business person or a consumer, every involved party has to make sure that all these criteria are met. Before using E-signature for Financial Services one has to be sore of not just the authenticity and compliance of the solution but also the design of the solution, in terms of security, storage, service, cost, etc.

If a group of people is entering into an agreement that is subject to certain legal requirements they have to consider certain factors and identify whether required formalities are satisfied or not if they go for electronic signatures. Then concerned parties have to see if the electronic contract that they are entering into will have the same legal effect as the traditional contract.

Can ADGM Financial Institutions Depend on Electronic Signatures?

The answer is YES if there is an absence of mandatory use of wet signatures. As per English law, there are no specific terms when it comes to entering into a contract. In fact, agreements can be entered into orally. Unless the ADGM law is specifically demanding a document or regulations asking for wet-ink signatures in a notarised or as a hardcopy, it can be signed using ESignature for Financial Services. Hence, a simple. a contract can be completed and finalized legally with electronic signature software under ADGM.


Financial Institutions in the UAE are harnessing the use of e-signature solutions. The latest development in the financial free zones in the UAE is welcoming the use of digital signatures with certain exceptions under a few laws of the land, and the utilization of Electronic Signature software is positive.

Want More Information About Our Services? Talk to Our Consultants!