How to Start a Recruitment Agency in Tokyo, Osaka, or elsewhere in Japan

How to Start a Recruitment Agency in Tokyo, Osaka, or elsewhere in Japan

June 26, 2019 23:22PM by , 292 views

Tokyo recruitment agencies charge 30% – 35% success fees (we only charge 17.5%) of each placed candidate’s full (including base salary, commissions, bonuses, and allowances) first-year salary; some Tokyo recruitment agencies even charge upfront or monthly retainers on top of such fees. It’s hardly surprising there are so many recruiters in Tokyo, many of them one-man shops run by retirees farming the networks they grew over their 40 years of employment.

Every recruitment agency in Japan must hold a valid government recruiting license (a “fee-charging employment placement business license” as it’s referred to in Japan’s Employment Security Act). Unlicensed recruiters are illegal and can cause legal liability issues downstream if something goes wrong with the employer’s relationship with an employee an unlicensed agency introduced. This is in part because licensed recruitment agencies in Japan must follow stringent rules regarding how they advertise and introduce candidates, whereas unlicensed recruiters are unlikely to know or care.

So your company is a recruitment agency in the UK or elsewhere and wants to start a recruitment agency in Tokyo, or maybe you’re an entrepreneur who wants to start a Tokyo recruitment agency. How do you apply for and receive a Japanese government recruitment license (a “fee-charging employment placement agency license” as it’s referred to in Japan’s Employment Security Act)?

The Ministry of Health, Labour and Welfare’s minimum requirements for a recruitment license are:

  1. Completed application form.
  2. Company (must be a Japanese KK or GK company or Japanese branch-office of a foreign company):
    1. Articles of Incorporation (which must include a business purpose specifically for recruitment).
    2. Company certificate.
    3. Copy of most recent tax-return (not required for a new company with no financial history).
  3. Office:
    1. Lease agreement and floor plan for each office at which the recruitment agency will operate (there is no minimum office size, but it must not be a virtual office).
  4. Directors:
    1. Each director’s Japanese residence certificate.
    2. Each director’s resume.
  5. Proof of Assets:
    1. Net asset value must be more than JPY5,000,000 (JPY5,000,000 paid-in capital for a new company in its first financial year).
    2. Cash at the bank must be more than JPY1,500,000 plus JPY600,000 for each additional office at which the recruitment agency will operate.
  6. Recruitment Business Manager:
    1. His or her resume.
    2. His or her Japanese residence certificate.
    3. Certificate proving she or he has attended a government-approved recruitment business management seminar within the past 3 years.

Tokyo recruitment agencies, as elsewhere throughout Japan, must renew the recruitment license every three years. It’s important to ensure any changes to a recruitment agency’s registered address, business address, directors, or recruitment business manager, are notified to the Labour Standards Inspection Office within thirty days of occurring, so as to avoid administrative penalties or even loss of license.

If you need help, we can manage the entire application procedure for you.

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