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 Chris Bowd, 7799 views

Tokyo recruitment agencies charge 30% – 35% success fees based on each placed candidate’s full first-year salary, including base salary, commissions, bonuses, and allowances (disclaimer: Venture Japan charges as low as 15% of base salary for an identical service). Some Tokyo recruitment agencies even charge upfront or monthly retainers on top of success fees (Venture Japan does not). 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.

Whether a private individual working from a home-office, or a company working from a glass-sided office building, 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). The only exception is for recruiters operating exclusively online with no individual contact with candidates (such as job-boards). Unlicensed recruiters are illegal and 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)?

We only deal with company applications for recruitment licenses, for which the Ministry of Health, Labour and Welfare’s minimum requirements are:

1. A set of completed recruitment license application forms (Venture Japan has the entire set translated to English).
2. The company, which must be a Japanese KK or GK company or Japanese branch-office of a foreign company, must provide:
   1. A copy of its Articles of Incorporation (which must include a business purpose specifically for recruitment).
   2. A valid (issued within three months of the application date) Certificate of Registration.
   3. A copy of its most recent tax-return (not required for a new company in its first financial year).
   4. Proof that its net asset value is more than JPY5,000,000 (JPY5,000,000 paid-in capital for a new company in its first financial year).
   5. Proof that its cash at the bank is more than JPY1,500,000 plus JPY600,000 for each additional office at which the recruitment agency will operate.
   6. A copy of the office lease agreement and floor plan for each office at which it will operate the recruitment business (there is no minimum office size, but it must not be a virtual office).
3. Each of the company’s directors must provide:
   1. His or her Japanese residence certificate.
   2. His or her current resume.
4. The Recruitment Business Manager must provide:
   1. His or her resume.
   2. His or her Japanese residence certificate.
   3. A 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 Employment Security 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.