Have you ever wondered what the electronic seal that companies and institutions in Egypt are talking about is? The electronic seal serves as the accredited digital identity for your company. It is an advanced encryption system that gives institutions the ability to protect their digital documents and ensure their authenticity in a way that leaves no room for doubt or forgery.
This system works to secure all types of digital assets, whether they are electronic invoices, financial reports, or important contracts. Most importantly, it provides conclusive evidence that the document has not been subject to any changes since the moment it was issued.
In this comprehensive guide, we will reveal all the secrets of Electronic Seal in Egypt, from their working mechanism and advantages, to the legal requirements for their implementation, and the difference between them and electronic signatures, leading to answering the most important question, Do you really need an accredited electronic seal?
What is an Electronic Seal?
The electronic seal serves as the accredited digital identity for institutions and companies. It is an advanced encryption system that gives companies the ability to protect their digital documents and ensure their authenticity in a way that leaves no room for doubt or forgery.
This advanced system works to secure all types of digital assets, whether they are electronic invoices, financial reports, contracts, or any other type of sensitive documents. Most importantly, the electronic seal provides conclusive evidence that the document has not been subject to any changes since the moment it was issued.
How Does the Electronic Seal Work?
The electronic seal works as a trusted digital witness, confirming that the electronic document has been approved by a legally recognized entity.
The process begins when the company applies the seal to the document. At this moment, the system creates a unique digital fingerprint for the document, encrypted in a way that makes it impossible to replicate or forge. This fingerprint becomes permanently linked to the document, and any attempt to modify it will break this link and expose the manipulation attempt.
What are the Advantages of Electronic Seal?
Electronic Seal offer a wide range of advantages that make them an ideal choice for companies seeking to modernize their operations and enhance their digital security, including:
- Superior ability to protect electronic documents from any form of manipulation or unauthorized modification.
- Conclusive proof of the identity of the issuing entity through recording accurate and detailed information about the issuing entity, including the full name, tax identity, and other vital data.
- The electronic seal provides a strong protective shield against all types of risks that traditional documents may face. No more worrying about losing important documents or their tearing or damage due to external factors.
- Tremendous positive impact on the speed and efficiency of administrative operations. The electronic system transforms procedures that used to take hours or days into processes completed in a few minutes.
- The ability to sign huge numbers of documents simultaneously with minimal effort. This feature is particularly useful for companies that deal with large quantities of invoices, reports, or contracts daily.
What are the Legal Requirements for Applying Electronic Seal to Invoices?
Applying Electronic Seal to invoices requires compliance with a set of precisely defined legal and technical requirements to ensure the validity and legality of the process, including:
1. Compliance with Local and Tax Laws
The foundation of successful electronic seal implementation lies in absolute assurance that the electronic invoice and seal comply with all tax laws and regulations in force in Egypt. These laws set strict and specific standards that include several vital aspects.
2. Obtaining Accredited Digital Signature Certificate
To ensure authenticity and reliable verification of the identity of the invoice-issuing entity, every company must obtain a digital signature certificate from an accredited and legally recognized certification authority. This certificate works as an official digital identity, confirming that the invoice is issued by a legally recognized entity.
The importance of this certificate lies in its direct and unforgeable linking of the invoice to the entity that issued it, providing strong protection against any attempts at manipulation or forgery.
3. Accreditation of Systems and Software Used
In most countries, laws require that systems and programs used for issuing electronic invoices and Electronic Seal obtain official accreditation from the competent tax or government authority. This accreditation ensures the system’s compliance with all required security and legal standards.
4. Maintaining Secure Electronic Records
Most legislations require companies to maintain complete and securely stored copies of electronic invoices and Electronic Seal for legally specified time periods, usually ranging from 5 to 10 years depending on the nature of the commercial activity.
5. Compliance with Cybersecurity Standards
Protection of financial information and personal data is considered a basic legal requirement when using electronic invoices and Electronic Seal. Companies must follow global and local cybersecurity standards to protect invoice and customer data from any breach or unauthorized access.
6. Obtaining Prior Tax Approval
In some cases, tax authorities may require companies to obtain prior approval before starting to use electronic invoices and Electronic Seal. This includes providing detailed information about the system used, the method of invoice generation, and the mechanism for applying Electronic Seal.
What’s the Difference Between Electronic Seal and Electronic Signature?
With the increasing reliance of companies on digital solutions, it has become necessary to understand the fundamental differences between Electronic Seal and electronic signatures, as each serves different purposes and suits diverse needs. The fundamental and basic difference between the two systems lies in:
1. Nature of Each and Level of Security Provided
The electronic signature is basically a digital representation of a person’s traditional handwritten signature, or it may be a voice print, or even a code stored in an electronic image.
In contrast, the electronic seal is an advanced and complex security system that uses advanced encryption techniques to protect documents. This system is completely fortified against any attempts at tampering, alteration, or unauthorized copying, ensures non-repudiation, and maintains absolute data integrity.
2. Linking and Registration Method
The electronic seal is linked to the company’s tax registration number, making it suitable for use in two basic cases: self-registration of invoices, and cases requiring the presence of an Enterprise Resource Planning (ERP) system for the taxpayer.
The electronic signature is linked to the national ID number of the person authorized to sign and is limited to one case only: working through the Egyption Tax Authority’s electronic portal. This restriction means it is not suitable for use in invoice self-registration processes.
3. Flexibility in Use
A major advantage of the electronic seal is its superior flexibility, as it can be used in all different cases and scenarios, whether for direct registration, in case of an integrated ERP system, or even when using the official electronic portal.
This flexibility makes the electronic seal the optimal choice for companies looking for a comprehensive and integrated solution that covers all their needs in electronic invoicing without restrictions or complications.
4. Technical Naming and Specific Uses
Technically, the electronic signature is called “Digital Signature” and its use is limited to the Tax Authority’s electronic portal for issuing invoices during trial periods. Its registration process is simple and requires only the national ID number of the authorized person.
In contrast, the electronic seal is technically known as “Seal Certificate” and is used in two main cases:
- Issuing invoices from the Tax Authority’s electronic portal.
- Issuing invoices through an ERP system directly connected to the Authority.
5. Functional and Technical Nature
The electronic seal is not merely an advanced type of electronic signature, but is a completely independent system with different functions. It focuses primarily on encrypting and securing data associated with the signed document, while the electronic signature focuses on proving the signatory’s identity.
The additional and important role of the electronic seal appears in helping verify the authenticity of the related document. This verification is done in a more comprehensive and deeper way than traditional signatures, providing an additional layer of protection for important and sensitive documents.
Do I Need an Accredited Electronic Seal?
The answer to this question is yes, because an accredited electronic seal provides the highest levels of protection and legal recognition.
Although different levels of Electronic Seal may be suitable in various contexts and work environments, accredited and qualified are the only ones that explicitly and legally enjoy the presumption of data integrity and source authenticity associated with the qualified seal.
This explicit legal recognition is effective throughout Egypt and the Middle East and Africa region, making the accredited electronic seal an ideal strategic choice for companies seeking maximum degrees of trust and security.
Conclusion
The electronic seal in Egypt is not merely a technical development, but an inevitable necessity for any company seeking success in the digital age. This advanced system combines technical security with legal recognition to provide a comprehensive solution for protecting your digital documents.
At Mofawtar, we believe that digital transformation is not an option but a necessity, and the electronic seal is one of the most important tools of this transformation. Therefore, we advise all companies, regardless of their size, to begin studying the possibility of implementing this system and benefiting from its numerous advantages.
Remember that the appropriate electronic seal activation program and the correct electronic seal activation method are the keys to success in this field. Therefore, choose an accredited and trusted electronic seal institution, and make sure to understand the difference between electronic signature and electronic seal to make the right decision for your company.
At Mofawtar, we are always happy to serve you, so don’t hesitate now to request our consultation by visiting our website.
