Electronic signatures (or e-signatures) are increasingly being used by individuals, companies, and other organizations to sign contracts in Singapore and complete other transactions.
E-signatures are gaining popularity over the years. However, their use has increased due to COVID-19. Many companies have moved to remote work models or hybrid business models to conduct their business electronically.
The Singaporean government has regulations regarding e-signatures. This is due to cybersecurity concerns as well as the possibility of forgery. In light of the increasing popularity of e-signatures, the government updated its regulations in March 2021 to reflect international best practices.
This article will discuss how Singapore regulates electronic signatures and the steps that companies should follow when using them for contract completion.
What is an e-signature?
The Electronic Transactions Act (Cap. The Electronic Transactions Act (Cap. The Act was first adopted by Singapore in 1998. It provides a legal basis for electronic transactions and promotes their use.
Singapore's Infocomm Media Development Authority, (IDMA) defines an e-signature as "An acknowledgment in an electronic format that a company can use to show the intention of one party (for instance, acceptance). It can also be used electronically to authenticate that party."
There are many forms of e-signature. These are all covered by the IDMA
- Pasting a digital image of a signature from a manuscript.
- Signing with a stylus, finger, or finger on a touch screen
- Clicking "I agree" on an online form or ticking a box;
- You can choose an option in electronic signature software.
This is not a complete list of esignature formats. Other forms, such as a scan of a page signed in ink, may also be accepted.
The IDMA acknowledges esignature software. However, their use does not automatically render an esignature valid. Users are allowed to use any other software. The IDMA provides examples such as Adobe Sign, DocuSign, and GlobalSign.
What's a secure electronic sign?
Singaporean authorities distinguish between an "electronic sign" and a secure electronic signature. Companies need to be aware of this distinction.
The Act states that a secure electronic signature can only be considered "secure" if it is protected by a unique certificate issued by trusted service providers and meets other requirements.
To be considered standard e-signatures, the following conditions must be met:
- You can be sure that the electronic record is accurate from its creation until its final form.
- When the electronic record is being given to someone, it can be displayed to that person;
- Conformance to additional electronic records requirements as required by the regulatory or supervising agency.
Additional requirements are required for secure e-signatures. These signatures must be capable of verifying their authenticity:
- Unique to the signatory
- Capable of identifying the signatory
- Created in a way that is solely under the control of the signatory
- Link to an electronic record which would invalidate the signature in the event that it was altered.
These requirements are not the only ones. Secure e-signatures must also meet certain standards when used to electronic records such as a document or certificate.
- Signatures must be made during the validity period of a certificate. They can also be verified by reference to the certificate's public key.
- The certificate must be trusted, which means it was issued by an Accredited Certification Authority, a Recognized Certification Authority, or a Public Agency approved to Act as a Certification Authority. Or, the parties to the signing explicitly agreed to use an electronic signature verified by reference to their public key.
Both secure and standard e-signatures can be enforced by law. However, the latter has the same presumption as a "wet" signature in legal proceedings.
The "Sign with SingPass", a feature that allows secure e-signatures to be used, was launched by the Singaporean government in November 2020. This feature is available as a mobile app and allows users to electronically sign documents through a government-created platform that meets the requirements of an e-signature.
What transactions are possible with an electronic signature?
The Act and the relevant regulations allow e-signatures to be used for most business transactions. They are not different from traditional "wet ink signatures". This includes signatures for sales and procurement, sourcing and human resources, as well as accounts and finance.
The Act was last amended by authorities in March 2021. This was to ensure that it is in line with international best practices. This update included the UNCITRAL Model Law on Electronic Transferable Records, (MLETR), which allows electronic bills of lading to be used for import-export transactions.
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E-signatures can only be used to sign limited documents and transactions such as wills, real estate documents, declarations of trusts and powers of attorney.
Digitizing Singapore's Business Environment
Singapore's government created an environment for digital integration that allows businesses to integrate seamlessly with minimal paperwork. This priority is reflected in the government's regulation for e-signatures. This creates a legal environment that encourages electronic transactions. These policies are part of the larger National Digital Identity Smart Nation initiative by the government, which aims at creating an ecosystem of trusted digital identity for individuals, businesses, and other entities.
Businesses should ensure that e-signatures can be used in Singapore. These measures include security measures to stop outside actors from obtaining copies of esignatures as well as internal controls that prevent employees from misusing e-signatures from other employees. Businesses should also take measures to keep records of electronically signed forms in case a digital form is changed by another entity.