The Legality of Digital Signatures in Hong Kong
5 minute read
Digital signatures or electronic signatures (e-signatures) are digital versions of a person’s or legal entity’s signature that holds legal power.
A digital signature is as valid as a traditional pen-to-paper signature. It can include numbers, letters, characters, and even symbols attached to documents in digital format. A signature of this kind is used to prove a record or a document’s authenticity.
This is valid for digital signatures in most jurisdictions around the world. But is a digital signature legally binding in Hong Kong?
Keep on reading to find out the answer!
Overview:
- Are E-Signatures Legal In Hong Kong?
- What is ETO?
- What Are The Requirements For E-Signatures In Hong Kong?
- When Can I Use E-Signatures For My Documents?
- What Are The Documents That Cannot Be Signed With E-Signatures?
- Electronic vs. Digital Signatures
Are E-Signatures Legal in Hong Kong?
Due to a growing increase in online transactions, electronic signatures are very popular in Hong Kong.
Digital signatures have been recognized in Hong Kong as having the identical legal status as a wet-ink signature under the Electronic Transactions Ordinance since 2000. Electronic signatures under this ordinance have to meet various requirements, including being a permitted transaction.
What is ETO?
The certification authorities of Hong Kong passed the Electronic Transactions Ordinance (ETO) in 2000.
This act allows digital signatures for general business use. Section 2 of the ETO defines electronic signatures in a very general way – the aim of which is to make them accessible to a wide range of people.
Section 6 outlines three basic requirements that a digital signature has to meet to be legally valid:
- If the Hong Kong law requires your legal signature, you need to have an electronic record to authenticate your information.
- The digital signature you provide also has to be on the electronic document.
- The method of obtaining the signature has to be reliable and easily understood.
Both parties have to consent to the method used to acquire the electronic signature.
What Are The Requirements For E-Signatures in Hong Kong?
For transactions that do not involve any government entities, digital signatures in Hong Kong are valid and enforceable seeing that they comply with the signature requirements under the ETO:
- Digital signature has to be attached to or logically associated with the electronic message.
- The signature process has to be reliable as it is appropriate regarding the purpose for which the signature is required.
- The recipient has to consent to the signatory using a digital signature.
When it comes to formats, there is no specific requirement for digital signatures.
For instance, parties to a transaction can use a stylus on a touchscreen device to sign a document or adopt an online e-signature tool that assigns the parties’ secure login details and provides them with access to the document to be signed.
However, if the contract involves a government entity, a digital signature supported by a recognized digital certificate issued by a recognized Certification Authority must be required.
When Can I Use E-Signatures For My Documents?
According to the Hong Kong law, digital signatures can be used for the following:
- Commercial agreements between companies (NDAs, purchase orders, invoices, etc.)
- Consumer agreements (sales and services terms, software licenses, purchase orders, order confirmations, invoices, shipment documentation, etc.)
- Human resources agreements (NDAs, employee invention agreements, privacy notices, employment contracts, etc.)
- IP licenses documents (copyright, patent, and trademark)
- Intangible property transfer agreements
If you need any of the mentioned documents signed, you will be glad to know that we offer a free online tool called SleekSign that can do exactly that! SleekSign is an electronic signature tool developed by the Sleek team.
The tool is safe and secure – but the best part about it is that it is completely free of charge. The tool is accredited and many are already using it to sign important documents.
What Are The Documents That Cannot Be Signed With E-Signatures?
Even though digital or electronic signatures are recognized in Hong Kong, there are various cases where they have no legal significance. These are the exceptions to the ETO. Sometimes various contracts require a handwritten signature for certain documents and sometimes it is not possible to use the digital signature at all.
Let’s take a better look at the exceptions under Schedule 1 of the ETO:
- Creation, execution, variation, revocation, revival, or rectification of a will, codicil, or any other document of testamentary nature.
- Creation, execution, variation, or revocation of a trust.
- Creation, execution, variation, or revocation of a power of attorney.
- Making, execution, or making and execution of any instrument which is required to be stamped or endorsed under the Stamp Duty Ordinance Cap. 117 other than a contract note to which an agreement under section 5A of that Ordinance relates.
- Government conditions of grant and government leases.
- Any deed, conveyance, or other document or instrument in writing, judgments, and lis pendens referred to in the Land Registration Ordinance Cap. 128 by which any parcels of ground tenements or premises in Hong Kong may be impacted.
- Any assignment, mortgage, or legal charge within the meaning of the Conveyancing and Property Ordinance Cap. 219 or any other contract relating to or affecting the disposition of immovable property or an interest in immovable property.
- Bills of exchange within the meaning of the Bills of Exchange Ordinance.
- Estate company agreement between an estate agent and a client.
- Statutory declarations.
- Affidavits and oaths.
- Warrants.
- Verdicts or orders of courts.
Electronic vs. Digital Signatures
A digital signature can be likened to an electronic fingerprint. It is a coded message associated with the person that signed the document. This form of signature is widely accepted, with its standard format known as Public Key Infrastructure (PKI).
Digital signatures are a type of technology implementation that encompasses the broader e-signature array. In simpler terms, they are included as part of the e-signature classification. They allow an individual to sign and authenticate documents.
The only difference lies in technical implementation, legal and geographical acceptance, and purpose.
Digital signatures are unique to the signing parties. There are platforms and tools that provide digital signature solutions and are rather simple to use.
Wrap Up
As technology evolves, so does the way we sign business documents. Digital and e-signatures have been around for some time in Hong Kong. These signatures are recognized in Hong Kong and it is completely safe to sign documents using this signature form.
On top of that, with free online tools such as SleekSign available for use, there is no reason to revert back to the traditional way of signing documents. Life should be made easier and hassle-free!
What now?
Well it’s simple! If you have any questions about getting your business started, get them all answered by having a free consultation call with our experts.
