Thursday, August 19, 2010

Recruitment Business in Japan

I received several inquiries on recruitment business since the start of this year.

In Japan, you have to have the license to start a recruitment business. The license can be obtained by a company or by an individual. There are two types (these can be subdivided into four) of licenses on human resources business as below.

1) Employment placement service (job-search, headhunting)
 a) Fee-charging employment placement
 b) Free employment placement

2) Worker dispatching service (temporary staffing)
 a) General worker dispatching (Ippan Haken)
 b) Specified worker dispatching (Tokutei Haken)

The main requirements to start the fee-charging employment placement business are as follows:

- Amount of net assets

An applicant is required to have net assets of JPY 5 million x number of offices or above.

- Amount of cash or bank deposits

An applicant has to have JPY1.5 million + (JPY600,000 x (number of office -1)) or above by cash or bank deposits.

- Appointment of employment placement manager

- Office space
The office space for employment placement business should be more than 20m2. But if the business is only done in the Internet and there is no need to have an interview/meeting with the potential employee, the size of office is not important.

The main requirements to start the general worker dispatching undertaking are as follows:

- Amount of net assets

An applicant's net assets must be JPY20 million x number of office or above, and such net assets should be more than one-seventh of total debt.

- Amount of cash or bank deposits

An applicant's cash or bank deposits must be JPY15 million x number of office or above.

- Appointment of responsible person acting for dispatching undertaking

- Office space

The office space for general worker dispatching undertaking should be more than 20m2.

Regarding 1) b) free employment placement, I skip the explanation because commercial companies are not interested in this business (usually done by non-profit organization such as school or university).

Specified worker dispatching in the above 2) b) is worker dispatching undertaking in which the dispatched workers (limited to those who become the objects of worker dispatching carried out in the course of trade) are composed solely of regularly employed workers. There is no assets requirement for specified worker dispatching.

There are other requirements and some of them vary according to the situation of each case. Please contact us for details.

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Updated on Oct. 20, 2016.
Tokutei Haken license was abolished. You will no longer be able to obtain it. But currently, there is a special measure for small companies so that they can start the temporary staffing business from a small capital.