Updated: Aug 25, 2020
Part 6: Signing in to the digital age
A promising foreign business economy, Indonesia is a country with interesting prospects for growing one’s business.
It’s important to note Indonesia’s political, cultural and social practices to properly conduct international business there. Foreign investment and starting a business in Indonesia comes with several legal requirements and it is good practise to read up on the processes to arm yourself with knowledge before starting out in a new country.
Electronic signatures are ideal for international business activities creating an efficient and accessible method for closing business deals, regardless of physical location.
Indonesia implemented the Electronic Information and Transaction Law in 2008 and adopts a tiered legal scheme.
Read on to learn more about the legal compliance for electronic signatures in Indonesia specifically and watch out for more in this series on Southeast Asia, Hong Kong, China, New Zealand, Australia, UK, Cayman Islands, and BVI.
Contracts are generally valid if legally competent parties reach an agreement, whether they agree verbally, electronically or in a physical paper document, provided that the basic requirements of a contract under the Indonesian Civil Code are fulfilled:
i.e., (1) consent;
and (4) permissible cause (i.e., it does not contravene the prevailing regulations and principles of public order and morality).
The Law No. 11 of 2008 on Electronic Information and Transaction as amended by Law No. 19 of 2016 specifically confirms that electronic contracts are valid and acceptable.
Government Regulation 82 provides that there are 2 types of electronic signature namely (i) certified and (ii) uncertified. There is no mandatory requirement to have a certified electronic signature.
Applicability of an Electronic Signature
To prove a valid contract, parties may sometimes have to present evidence in court. Leading digital transaction management solutions can provide electronic records that are admissible in evidence under Article 44 of Law No. 11 of 2008 on Electronic Information and Transaction, to support the existence, authenticity and valid acceptance of a contract.
By Celestine Loh
Founded in 2013, Zegal is the fastest growing LegalTech company operating across Asia Pacific and Europe. Today, business users and lawyers across the globe trust Zegal’s software to solve legal problems in an affordable and efficient way.
Zegal is led by a talented team of 60 employees and has offices in Hong Kong, Singapore, Nepal, Australia, New Zealand, and the UK.
Zegal has been featured in the New York Times, Forbes, and Huffington Post, and was recently recognised in the South China Morning Post as an emerging LegalTech company in the artificial intelligence space.