How to Start a Temporary Staff Agency Dispatch Worker Business in Japan

Dispatch worker businesses, aka temp staff agencies, are seeing rapid growth in Japan. This growth in dispatch worker businesses results from:

• The gradual trend of Japanese workers becoming more flexible (and very gradually less obsessed with lifetime employment opportunities) and using temporary work to test new career opportunities, or while searching for the next long-term position.
• The rapidly shrinking workforce forcing employers to hire people from temporary staff agencies as opposed to hiring long-term employees.
• Contrasting with the previous point, employers seeking to achieve a leaner workforce.
• Increased demand for workers from abroad in all categories, ranging from hotel housekeeping to aerospace engineering.

As a government-licensed Tokyo recruitment agency, Venture Japan only deals in the bilingual recruitment market for English-speaking Japanese and Japanese-speaking foreigners and does not (at least at this time) provide a temp staff service. In our business services division though, we are often approached by foreign firms and entrepreneurs who see the lucrative market in Japan and want to bring in engineers and other workers from abroad to dispatch to clients in Japan.

Every temporary staff agency in Japan must hold a valid government license (a “dispatch worker business business license” as it’s referred to in Japan’s Act for Securing the Proper Operation of Worker Dispatching Undertakings and Improved Working Conditions for Dispatched Workers aka the Worker Dispatch Act). Unlicensed dispatch worker businesses are illegal and will cause severe liability issues, both for the business illegally dispatching workers and the company receiving them. Licensed temporary staff agencies must follow stringent rules and maintain relatively high cash reserves and net asset value, whereas unlicensed operators are unlikely to know or care.

So your company is a temporary staff agency in India or elsewhere and wants to start a branch to send engineers to Japan, or maybe you’re an entrepreneur who sees an opportunity to start a dispatch worker business in Japan to bring housekeeping staff, restaurant staff, etc. from Eastern Europe. How do you apply for and receive a Japanese dispatch worker business license?

The Ministry of Health, Labour and Welfare’s minimum requirements for a dispatch worker business 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).
   4. Copy of the receipt of taxes paid.
3. Office:
   1. Lease agreement and floor plan for each office at which the dispatch worker business will operate (each office must be at least 20 square meters usable space).
   2. Map showing the closest rail-station to the 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 JPY20,000,000 (JPY20,000,000 paid-in capital for a new company in its first financial year).
   2. Cash at bank must be more than JPY15,000,000.
6. Dispatch Worker Business Manager (at least two):
   1. His or her resume (must have at least 3 years HR experience).
   2. His or her Japanese residence certificate.
   3. Certificate proving she or he has attended a government-approved dispatch worker business management seminar within the past 3 years.
7. Dispatch Worker Business Division:
   1. Written regulations for personal information management.
   2. Workplace rules or employment agreement.
   3. Administration guidelines for dispatching workers.
   4. Details of seminars for employee career improvement.
   5. Company pamphlets (website included).
   6. Social insurance registration documents .

Temporary staff agencies in Japan must renew the dispatch worker business license every three years. It’s important to ensure any changes to a dispatch worker business’s registered address, business address, directors, or dispatch worker 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.