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.

=====
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.

77 comments:

Anonymous said...

Hi,

I have a KK (one-man company) already and wants to get a recruiting license but since my company doesnt meet the requirements (asset, office sqm, etc.), can I get an individual recruiting license instead? If so, what are the requirements?

Also, if I do get an individual recruiting license, can my KK sign clients for recruiting activities or do I need to sign them up as an individual recruiter?

Appreciate your kind advise.

tds said...

Hi,

You can get a recruiting license as an individual, if you personally meet the same requirements. If you get the license as an individual, you cannot make your KK sign on the documents regarding the recruitment activities.

Unknown said...

Hi,

I live in a different country (Canada), operate my business here, and am a resident here. I also a licensed employment agency in my home jurisdiction - can I still contract with Japanese companies for the placement of employees, or do I need to set up some sort of license (and if so where do I go to obtain it?). My business is run entirely online and over the phone, so I'm not sure that I am even required to have a license?

Any info you can provide would be greatly appreciated (and if need be, I will gladly hire you for your services should some sort of licensing be possible/required).

I appreciate your help!

Unknown said...

Also - what are the penalties associated with operating a recruitment agency without a license. I am overseas and don't imagine the Ministry being able to really do anything to prevent me from carrying on business even without a license. The law around these types of licenses are very interesting particularly in the context of inter-jurisdictional recruitment. I'd be interested to know your thoughts or insights in this area.

Thanks!

tds said...

Hi,
If you contract with Japanese companies, you need to obtain the license. Big companies do not contract with unlicensed employment agencies, but there are small companies that do not care the license. My recommendation is to find a Japanese partner (company that has the license in Japan) and use its name on the contracts.

Of course, there are penalties for unlicensed employment agency activities, but it seems that the number of recorded crimes on this is small, considering the number of potential wrongdoers.

Anyway, I recommend to obtain the license if you do recruiting activities in Japan.

Justine Bower said...
This comment has been removed by the author.
tds said...

Hi Justine,
Offshore companies cannot do business (including recruiting) in Japan unless they have their local entity in Japan. If you do not have such an entity, it is a good idea to use a partner company which has recruiting license in Japan and invoice through them.

Anonymous said...

Hi,


How much do local recruiters charge ( to provide their recruitment license to overseas recruiters )?

Can you recommend any such firms?

Thanks

David

tds said...

Hi David,

Sorry but I cannot recommend a specific recruiting company. There are many recruiting companies in Japan and I believe some of them can cooperate with you. I suggest you visit Japan and meet such companies.

Chris Bowd said...

Hi David,

We might be interested in assisting you provided it's a legitimate arrangement.

Chris
Venture Japan K.K.

Anonymous said...

Hi,

If you subcontract as a recruiter with a company abroad that has no recruitment license in Japan, can the subcontractor get fined as an individual or is it only the company that can get fined?

Thanks.

Anonymous said...

Thanks for your article, very useful.

Have there been any major changes to licensing or capital requirements since it posted in 2010?
Also, I hear that to work as a recruiter in Japan you need to pass a test is this correct?

Chris

tds said...

Regarding the above two comments, the subcontractor or its director as an individual may be fined.

Also, there were major changes to the relative laws (Tokutei haken license was abolished, etc.). For details, please give me your email.

cavour said...

Hello everybody veru good comments here
I am from Brasil currently i live and work in japan
I hold a permanent Visa and I am looking for partners
By myself I am going to Open a recruit company becouse its easyer to do.
I want to bring Thai and lao Pdr Peoples to work here in japan also some brasilians
I am interest in having a international Partnes let Us talk contact me
andrew toyo shinjuku

Anonymous said...

Hi.

Where do I go to obtain a license? Is there anyone you can recommend that I can sit with and learn more about setting up a recruiting business?

I have about ten years experience but have always worked in a gaishi recruiting firm but I want to start on my own.

Any help appreciated.

tds said...

If you can pay for legal consultation fee, there are some people who can advise you on recruiting business and how you can obtain the license.

Anonymous said...

Hi,

Thanks for your previous comments.

In applying for the recruiter license as a kojin jigyo it says the minimum amount of money/ assets needed if 5 million JPY. So basically as long as you have 5m in your account when you apply that would be enough (all else being well)?

I have a couple of other questions, too, if I may:

- How much does the license cost?
- Do you need to renew it every year, and if so how much is the renewal cost?
- If you need to renew it, do your asset/ funds get reviewed every time?

Thank you very much again in advance.

Anonymous said...

Hi,

Sorry, I had a couple more questions:

- Is it legal to start recruiting during the license application process?
- Is it possible for an overseas company (e.g. UK based) with no official Japanese presence (e.g. GK/ KK) to apply for a license?
- How much (roughly) are the fines if you recruit without a license?

Thank you again!

Unknown said...

So just clarify, the rules on setting up a K.K. have been relaxed since 2010, meaning you can run a K.K., from your apartment and set up with 1 yen, but the rules on getting a recruiting licence have not, i.e. 5 million in the bank and a registered office from which to operate?

I have a recruiting firm based and registered in Dubai and Hong Kong and want to register here, I am a sole trader at the moment working on global assignments outside of Japan but want to build the business here now that I have moved back here.

I need to get an office and show 5 mill in a Japanese bank account, or can I show my overseas assets and use my K.K. address which is my home?

Doesn't seem right if it is now easier to set up a K.K. with minimal assets and register to a home address, especially as most recruiters work virtually from the clients and candidates.

Any advice for me?

Unknown said...

with thanks

tds said...

Sorry for not replying sooner.
December is the busiest season in my job, but it is almost over.

Re: Is it legal to start recruiting during the license application process?
-No, it is not.

Re: Is it possible for an overseas company (e.g. UK based) with no official Japanese presence (e.g. GK/ KK) to apply for a license?
-No, it is not.

Re: How much (roughly) are the fines if you recruit without a license?
-Monetary penalty is the fine below 1 million JPY. There are also penalties such as imprisonment, etc.

tds said...

QQQ---So just clarify, the rules on setting up a K.K. have been relaxed since 2010, meaning you can run a K.K., from your apartment and set up with 1 yen, but the rules on getting a recruiting licence have not, i.e. 5 million in the bank and a registered office from which to operate?

AAA---Yes. You are correct.

QQQ---I have a recruiting firm based and registered in Dubai and Hong Kong and want to register here, I am a sole trader at the moment working on global assignments outside of Japan but want to build the business here now that I have moved back here.

I need to get an office and show 5 mill in a Japanese bank account, or can I show my overseas assets and use my K.K. address which is my home?

AAA---JPY 5 Mil. can be shown by the B/S and P/L. You need to have cash more than 1.5 mil. in the bank account, and it should be proved by the certificate of bank balance.

QQQ---Doesn't seem right if it is now easier to set up a K.K. with minimal assets and register to a home address, especially as most recruiters work virtually from the clients and candidates.

AAA---I do not know all recruiters have license or not, but if you obtain the license, you need to satisfy the requirements.

Anonymous said...

Hi, I am a UK based recruiter and one of my customers is a global US company who have offices in Japan. They need my help to find them someone from outside of Japan to relocate to Japan as they cannot find who they want locally.

Do I need a license to help them if they engage with me from Japan?

If so, can they engage me via the UK offices to do the work?

Many thanks

tds said...

If you help someone find a job in Japan, you need a recruitment license in Japan, regardless of the fact that you help them from Japan or overseas.

tehara Ratnayake said...

Iam seeking a partner from japan to proide workers from srilanka. I an proide over 100workers per month.

Neil Bevan said...

Hello,

Just a quick question relating to the office itself

Can I use my temporary office for the address at Regus ? I have a big enough office there.

Or does it need to be a different kind of office?

Thanks

tds said...

Dear Neil,

You can use your Regus office if it has the dedicated space (over 20m2) for your company.

Anonymous said...

Thanks so much for your kind reply

I also remember you mentioning that if my recruiting is all online i do need to have an office

Is this still so? If yes is the process of getting the licence somehow different?

Thanks in advance fir your help

tds said...

If your recruitment business is done online, the office space is not required. It is still so. But you can never meet the people in person.

Anonymous said...

Just to confirm - if we are recruiting global talent to place in Japan and do all our work remotely/online - we no longer need to have an office onsite in the country to register as a recruiter? Sorry to keep covering the same information. Thank you sincerely for your guidance.

tds said...

You are correct in unnecessity of office space, but you still need to have a company registration and license.

Anonymous said...

Hi quick question regarding nijyu-haken regulation in Japan.
I have a company in Japan with haken license. If I employ engineers subcontracted from company in India, would I be able to subcontract them to another company? would that be nijyu-haken and illegal in Japan?
And before that, is it leagal to employ engineers that are already employed in other countries; i.e. India?
Please kindly advise, thank you.

tds said...

Nijyu-haken is prohibited and illegal.
Working for more than one company is not illegal, but usually prohibited by the employment contract of the company. Therefore, if the employment contract allows, there is a possibility that an employee can work for two or more companies.

Anonymous said...

Hi,

If a KK has a license and makes the contracts with companies, is it okay ti subcontract and invoice the KK as kojin jigyo? Or would you need a license as kojin jigyo?

Also is it okay to trade under a different name to the official company name? For example the brand (email website etc. says "X Company" but the official company name and registered license is "Y Company"?

Thank you in advance for your help.

tds said...

Hi,

The reply to your questions will be "No" for both.

Grace said...

Hi,

My name is Grace and I work for a recruitment agency based in Hong Kong. My company is interested in operating our business in Japan off-shore. In other words, we're considering the idea of working with Japanese clients and candidates remotely from Hong Kong. In this case, do we still need to have the recruitment agency license?

Thank you in advance for your kind help.

Best wishes,

Grace

tds said...

Hi Grace,

Yes, you need to have the recruitment license if you directly contact candidates in Japan.

Anonymous said...

Good morning,
My name is Evelyn,I am a Filipino.,where can i get a licence and permit to operate an employment agency here in Japan?I`m from Miyazaki-ken.I`m sorry for My broken english.Thank you very much.

tds said...

Hi Evelyn,

Contact me by email or from our website inquiry form (http://www.andolegal.com/contact.html).
Thanks.

細川 シンチャ CDM-WEB.COM said...

Hello I am a resident in Japan for 20 years. I want to start a re-placement agency or to send Filipino nurses/helper/semstress/IT or Programmer/call operator/English teacher/factory worker in Japan. I know the rules in my country already. But I don't know what to do and needs in Japan, besides the required office space and money. Mazu wa Koujin Jigyo wo kangaiteimasu, Sono ato wa jyugyoin yatowaru no ga nan nin hitsuyo desuka? Bengoshi ni onegai suru koto wa nandesuka? Ikura Kakarimasuka? Bengoshi ni Ichinen nankai onegai suru desuka?

Soshite, Philippine kara Nihon ni okuru Filipino tachi wa dore gurai Nihongo dekiru ka,kanarazu dekiru no ga hitsuyo desuka?

Advance thanks for your kind answer.

tds said...

Hello, thank you for your comment.
Kojin jigyo is OK, but simply put, it is very difficult to do such a business. Besides the re-placemnet agency license, each worker's visa is necessary. The Japanese government does not issue a working visa to an unskilled laborer. If you can pay legal counseling fee, please contact me.

Chris Bowd said...

Added to the attorney's comments, every recruitment business ("Fee Charging Employment Placement Agency") in Japan must have a person designated as its recruitment business manager, and that person must have attended a government approved recruitment business management seminar within the past three years. Those seminars used to be simply "Sit there for 7 hours, listen to the presentations, collect your certificate, then leave.", but the organizing association, which wants to see an improvement in the quality of recruiting agencies, is changing the seminar format to require a written test, which is of course in Japanese.

Regarding assets needed to operate a recruiting business, the recruitment license renews (not automatically) every three years and the person or company applying must have minimum net asset value of JPY3.5million at each renewal.

For licensed recruiters in Japan considering partnering with overseas companies that want to profit from providing recruitment services in Japan (but which don't want to invest in the country), consider Article 32-10 of the Employment Security Law, which clearly and unambiguously states:
"A fee-charging employment placement business provider shall not allow another person to conduct a fee-charging employment placement business under the name of said fee-charging employment placement business provider."

Any foreign company serious about starting a recruitment agency in Japan needs to establish a company here and get a license. The government is gradually strengthening the Employment Security Act and the association behind the large Japanese recruiters is increasingly looking to make it much harder for unlicensed recruiters to operate.

Chris Bowd
Venture Japan K.K. www.VentureJapan.com

tds said...

Dear Chris Bowd,

Thank you for your useful comment.

Anonymous said...








HI

Thank you for your work below,
( requirements for staffing business)
but i would like to understand the meaning of JPY 5 million x number

and JPY1.5 million + (JPY600,000 x (number of office -1)

one-seventh of total debt. An applicant's net assets must be JPY20 million x number

what x means in this sentences
and the debt





in order to obtain the license what exactly the requirements.
we need to do it both ? or ...





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.


tds said...

Hi Anonymous,
You need to satisfy all of these requirements.

William said...

Hi,
Thank for sharing this valuable information about recruitment business in Japan. The goal of a recruiting agency is to fill temporary job openings, permanent vacancies or both.It is important to decide on the type of recruitment agency that one would like to start and the industry one wants to serve. I am also associated with an IT Recruitment Agencyin Canberra.

Joe Peters said...

Is it illegal to introduce a candidate's CV to a client company without first getting the candidate's permission to introduce him/her? Is this covered under the recruiting regulations?

tds said...

Hi Joe,
Basically, you cannot do it. It is a sensitive matter.

Anonymous said...

Thanks. That is exactly our understanding too and in fact, I've now found it in writing in the recruiting license renewal manual.

This is something we always tell our candidates, and we always get their permission, but it is amazing how many recruiting firms continue to violate this rule.

Anonymous said...

Hello,

Thank you very much for your guidance.

I have a question - when creating company in Japan and writing "Recruiting" in the company registration (teikan) will I be asked to provide a recruiting license?

tds said...

No. You only need to obtain the license when you actually start the recruiting license.

Anonymous said...

Hello,

I have a quick question - is it possible for a foreigner who doesn't live in Japan and has only tour visa to create a company in Japan?

Thanks in advance

tds said...

A non-resident can incorporate a company in Japan, but you may have difficulty to open a bank account and to obtain a business license.

Anonymous said...

Ok, thank you. What conditions should be met to successfully open bank account?

Anonymous said...

Hello
I have one quick question..we established IT company in Tokyo 07/2016 with 1M capital. we are thinking to take jinzai shokai license..for this we need to raise the capital from 1M to 5M (we got some business and that amount can show as capital increase amount )? then we need to apply for the license?

after raising the capital to 5M and we spend money for daily expenditure..still, we can apply for the license ? or we have to show in company account 5M at the time of apply license?

tds said...

Re: Bank account
Your company should register a resident representative to open a bank account (of course, there are more requirements, but the resident representative is a crucial point).

tds said...

Re: Capital
5M is not necessarily the amount of capital, but the assets minus debts in your company's B/S.

Anonymous said...

Hi

i know one person and he applied for Haken license (20 M capital) and expected to get by this month end but he is unable to do business so i am thinking to take his company by pay some amount .( he will takeout his all money from company)

is it necessary to keep 20M in bank account every time ?
not required show 20M?
need to show every time we do annual tax filing ?
can you help us on hiring company like this ?

tds said...

Hi

If the company already has the license, you do not need to keep the fund every time. You need to show the fund again when you renew the license.

Sorry for not replying sooner. It is a very busy season now.

Anonymous said...

Hi,

Do you need a license to advertise jobs, or to post your CV on the internet in Japan?

I mean a website that advertises jobs, or allows people to upload their CV, but the website operators have no direct contact with employer or employee. The website operators do not get involved in the employer / employee communications.

If an employee sees a job they like, they can click apply and deal with the employer directly.
If an employer see's a CV they like they an contact the candidate directly.

It is job advertising, not traditional recruitment.

Anonymous said...

we are IT company and have office in Japan for 2 years..recently moved to new office in order to apply shokai license. office lease agreement they put IT related serivces...
i heard we should keep shokai license purpose in agreement or take permission paper..

is it manadatory that lease agreement should have shokai license or get permission paper ?

tds said...

Hi to the post on Aug. 2,

If you edit the job advertisement or CV, or communicate with the employer/candidate, it is considered as recruiting and you need the license. For more detailed information, check the official website below (sorry it is in Japanese only).

https://www.mhlw.go.jp/www2/topics/seido/anteikyoku/minkan/

tds said...

Hi to the post on Aug. 12,

Usually, permission paper is not necessary, and you do not need to write the purpose of lease as Jinzai-shokai. If the agreement is sublease, you need to submit the permission paper.

Joe Peters said...

Some companies offer their employees an incentive, usually cash, if they introduce a friend who is then hired by the company.

I’ve been told, by another lawyer, that this is illegal because the employer and the employee are not licensed to recruit.

What is your opinion?

Thanks.

tds said...

Hi Joe,

I think a small incentive is legal, but there is no clear-cut guideline. If you have any specific case, consult a specialist or the government.

Anonymous said...

Hi There,

I was wondering if anyone had any information to share on the written test that now needs to be taken at the government approved recruitment business management seminar?

is there any english support? are the questions all multiple choice? any specific info on questions that will be asked?

Anonymous said...

No English - all in Japanese. I was among the first group to take it so perhaps they will have English translations eventually, but no mention was made of it.

All multiple choice.

Basic questions on topics covered in the lecture prior to the test.

If you don’t understand or read Japanese you will most likely need to have someone who does do it on behalf of your agency.

Anonymous said...

Do you remember how many questions are in the test?

Anonymous said...

10 as I recall.

Since we were the first group we didn't have a required minimum score, but they told us that going forward a minimum (70%, I think) will be required.

HJ said...

Sorry, I am a bit confused about the following:

-------------------
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

1.5 M + 600,000 x (number of offices -1)

-----------------

Does that mean that you need to have a capital of 5 million in the company AND also 1.5M in the bank account (for 1 office).

Or it means that if one of the two partners or both haves minimum 1.5 M in the bank accounts, they can open/apply for the license?

tds said...

Dear HJ,

Suppose you have only one office, your company needs to have JPY 5M net assets (asset-debt) and 1.5M out of 5M should be cash.

Anonymous said...

Hello TDS san,

Thank you for great blog with details.

I am planning to open my own recruiting firm ("Fee Charging Employment Placement Agency") in Tokyo.
And I have few questions and would appreciate if you could help to clarify please:

1) what are merits and demerits of KK vs GK (LLP) for Recruiting agency specifically, except fees? for both fees I have already checked at your website: http://www.andolegal.com/

2) can KK or GK ("Fee Charging Employment Placement Agency") can be created with One Person only?

3) if open new KK and assume can not make any revenue for first 5-6 months or 1 year, should I pay taxes (or any other fees) still? (I mean can I keep KK without any revenue for long period?)

3) how much does Recruiting License cost? and if 10 questions can not be answered 70% correctly, one should re-take 7 hours Recruiting License session again?

4) when obtaining Recruiter License and establishing KK or GK can I use my apartment as an office for "Fee Charging Employment Placement Agency"?

Thank you very much in advance,
大変お手数ですが宜しくお願い致します。

tds said...

For the details, please seek for a paid legal advice.

1) KK is easier to get more credibility than GK.

2) Yes.

3-1) You can keep the company but you have to pay taxes.

3-2) Government fee is JPY90,000. Currently (till the end of this year?) we are in the experimental period, and you can get the certificate even if you have a bad record.

4) No.

Ashok Saraf said...

I want to send type 1 visa workers to Japan through recruitment agency but want to build their network to support them in JAPAn I am not recruitment company but personal consultation company . Do I require any license to give such services

tds said...

Dear Ashok,

What kind of network are you going to build?
Please cooperate with a recruitment agency to go forward.

Unknown said...

Hi,
I would like to put a small recruitment business here in Japan. Would like to know the requirement and documents needed to start this kind business. I’m living here in Japan and I would like to open this kind of business. Can you give me some knowledge how to put this business. Thank you.

tds said...

Hi,
If you read through this article and lots of materials on the Internet and still need a consultation, it will be on a paid basis.