Indonesia’s legal approach to electronic signatures is governed primarily by Law No. 11 of 2008 on Electronic Information and Transactions (ITE Law), as amended by Law No. 19 of 2016 and, most recently, Law No. 1 of 2024 (the most comprehensive update to date).
The Indonesian framework adopts a tiered, technology-neutral approach, allowing for different types of electronic signatures to be legally valid, provided they meet specific reliability criteria. The law aims to recognize and facilitate digital transactions, e-commerce, and public service efficiency while maintaining security and consumer protection.
Crucially, the ITE Law grants legal validity and evidentiary status to Electronic Information and Electronic Documents. The Electronic Signature (Tanda Tangan Elektronik or TSE) is defined as data attached to or associated with other electronic information used as a verification and authentication tool. The legal strength of a TSE depends significantly on whether it is “Certified” or “Uncertified.”
A. Certified Electronic Signature (TSE Tersertifikasi): This signature offers the highest level of assurance, comparable to a Qualified Electronic Signature (QES) globally. It is issued by a licensed Certificate Authority (CA) in Indonesia and benefits from a strong presumption of legal authenticity.
B. Uncertified Electronic Signature (TSE Tidak Tersertifikasi): This covers common methods like click-wrap, typed names, scanned signatures, and standard cloud-based signature solutions. While legally valid, the party presenting the document must prove the signatory’s identity and intent in case of a dispute.
Legal Framework: Law No. 11 of 2008 on Electronic Information and Transactions (ITE Law)
The ITE Law provides the core principles for the legality of electronic execution, ensuring that digital documents and signatures are not invalidated merely because they are in electronic form.
Legal Recognition and Equivalence
Article 11 of the ITE Law sets the standard for the validity of Electronic Signatures:
i. Validity Condition: An electronic signature is valid and has legal force and effect if it meets specific requirements regarding authentication, integrity, and non-repudiation.
ii. Authentication: The signature must exclusively belong to the signatory (e.g., through cryptographic linking or verifiable audit trails).
iii. Integrity: It must be capable of indicating the signatory’s approval of the Electronic Information.
iv. Non-Repudiation: The signature must be verifiable to show that the Electronic Information has not changed since the time it was signed.
Article 5 grants legal status to electronic documents, stating that Electronic Information and/or Electronic Documents are valid legal evidence. This provides the foundation for the documents being signed.
The Role of the Electronic Certification Authority (PSrE)
The Indonesian government, through the Ministry of Communication and Information Technology (Kominfo), regulates the providers that grant high-assurance signatures.
A. Penyelenggara Sertifikasi Elektronik (PSrE): These are entities licensed by Kominfo to issue Certified Electronic Signatures (TSE Tersertifikasi). PSrE’s adherence to stringent security standards and Public Key Infrastructure (PKI) requirements is key.
B. Presumption of Authenticity: Under Article 12, a Certified Electronic Signature issued by a PSrE enjoys a strong presumption of authenticity. This is a significant advantage in court proceedings, simplifying the process of proving the document’s validity.
Uncertified Electronic Signatures
The law implicitly recognizes Uncertified Electronic Signatures, which do not rely on a licensed PSrE. These are legally valid for most commercial agreements, provided the technology used (e.g., email verification, two-factor authentication, audit logging) can meet the general requirements of the ITE Law regarding identity and document integrity. In essence, these are legally valid, but they do not automatically receive the benefit of the presumption of authenticity, placing the burden of proof on the reliance party.
Documents That Can Be Signed Electronically
Based on the general recognition provided by the ITE Law, the vast majority of commercial, corporate, and private agreements can be validly executed using an Electronic Signature (both Certified and Uncertified types).
Key document categories suitable for Electronic Signature execution include:
i. Commercial Contracts: General sales and purchase agreements, service agreements, vendor contracts, business-to-business (B2B) agreements, and Memorandums of Understanding (MoUs).
ii. Corporate and HR Documents: Employment contracts, employee handbooks, termination notices, non-disclosure agreements (NDAs), and internal corporate resolutions (where not explicitly excluded by Company Law).
iii. Financial Transactions (General): Invoices, receipts, expense reports, and account opening forms (subject to specific Financial Services Authority regulations).
iv. Consumer Contracts: Online terms of service, subscription agreements, and user acceptance forms.
v. E-Government and Public Services: Many filings with various government agencies, driven by the Indonesian government’s push for digital transformation (e-Gov).
Best Practice: For high-value or high-risk contracts, utilizing a Certified Electronic Signature is highly recommended due to the legal presumption of authenticity it provides under Indonesian law.
Documents That Cannot Be Signed Electronically (Statutory and Interpretive Exclusions)
While the ITE Law is permissive, certain areas of law and types of documents in Indonesia still require traditional physical execution or specific notarization and are either explicitly excluded or remain ambiguous due to lack of corresponding statutory changes.
The primary exceptions, often requiring execution before a Notary Public or specific legal officials, include:
A. Deeds of Land/Property: Documents related to the sale, transfer, or encumbrance of immovable property (land titles, deeds of conveyance) often require execution before a Pejabat Pembuat Akta Tanah (PPAT), which typically necessitates a physical deed and wet-ink signatures.
B. Documents Requiring a Notary Public: Any document that must be executed in the form of an authentic deed (Akta Notaris), such as the Deed of Establishment for certain companies (e.g., Perseroan Terbatas or PT), certain mergers and acquisitions documents, or specific corporate power of attorneys. These require the physical presence and seal of a Notary Public.
C. Wills and Testamentary Documents: Similar to many common law jurisdictions, the execution of wills and other testamentary documents usually requires a physical document and specified witnessing procedures to ensure authenticity.
D. Certain Banking and Financial Instruments: While many customer agreements are digital, some high-value or regulated collateral documents (e.g., mortgage deeds, guarantees) may still require traditional execution methods based on specific regulations from the Financial Services Authority (OJK) or Bank Indonesia (BI).
It is crucial for parties to review the relevant sectoral laws (e.g., Agrarian Law, Company Law, Banking Law) to ensure compliance, as the ITE Law’s general permissiveness does not override specific physical execution requirements in other statutes.
Notable Changes in Legislation and Practice (2016 and 2024 Amendments)
The ITE Law has been updated twice, demonstrating the Indonesian government’s commitment to adapting digital legality to modern technological and social needs.
Law No. 19 of 2016 (First Amendment)
The 2016 amendment primarily focused on revising the criminal provisions of the ITE Law, particularly concerning defamation and content regulation. While it did not overhaul the e-signature framework, it reinforced the stability and seriousness of digital transactions by strengthening the legal penalties for cyber-related offenses, thereby increasing trust in the electronic environment.
Law No. 1 of 2024 (Second Amendment)
The most recent amendment, Law No. 1 of 2024 (often referred to as the ITE Law 2024), refined and clarified several aspects of digital legality, aiming for improved legal certainty:
A. Clarification of Authority: The amendment further solidified the role of Kominfo and the PSrE in issuing and regulating Certified Electronic Signatures, ensuring that the technology used meets recognized national and international standards.
B. Enhanced Consumer Protection: New provisions were introduced focusing on protecting personal data and clarifying liability in electronic transactions, which indirectly boosts the reliability and trustworthiness of the electronic documents being signed.
C. Improved Clarity on Evidentiary Rules: The amendment sought to harmonize the ITE Law with the Civil Procedure Code, making the acceptance and evidentiary weight of Electronic Information and TSEs clearer in court settings, especially for cross-border transactions.
Conclusion
Indonesia has established a robust, two-tiered system for electronic signatures through the ITE Law. The Certified Electronic Signature (TSE Tersertifikasi), issued by a licensed PSrE, provides the highest legal assurance and a strong presumption of authenticity, making it the preferred choice for high-stakes transactions. Uncertified signatures are also legally valid for general commercial use, provided they are supported by a strong audit trail and mechanism to prove signatory intent. While the legal framework is advanced, parties engaging in real estate, testamentary matters, or documents requiring a Notary Public must still adhere to traditional physical execution requirements, as these statutory exceptions remain in force. The latest 2024 amendment signals a continued effort to strengthen digital infrastructure and legal certainty in Indonesia’s digital economy.
Disclaimer
The information on this site is for general information purposes only and is not intended to serve as legal advice. Laws governing the subject matter may change quickly, so Flowmono cannot guarantee that all the information on this site is current or correct. Should you have specific legal questions about any of the information on this site, you should consult with a legal practitioner in your area.
References
i. Law No. 11 of 2008 concerning Electronic Information and Transactions (Undang-Undang Informasi dan Transaksi Elektronik or UU ITE), as amended by Law No. 19 of 2016 and Law No. 1 of 2024.
ii. Government Regulation No. 82 of 2012 concerning the Implementation of Electronic Systems and Transactions (PP PSTE).
iii. Regulation of the Minister of Communication and Information Technology (Peraturan Menteri Kominfo) regarding the Implementation of Electronic Certification.
iv. Indonesia Civil Code (Kitab Undang-Undang Hukum Perdata).
v. Law No. 30 of 2004 concerning Notary Publics, as amended.
