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Start an Employment Agency in Singapore

Start an Employment Agency in SG

What Is an Employment Agency?

An employment agency acts as the middleman between companies and potential employees. Companies refer their staffing needs to the employment agency, and the agency then finds suitable candidates to fill the required positions within those companies. Companies use employment agencies because such agencies can save them a huge stack of time and hassle during the recruitment process. Contractors who use employment agencies benefit from the agency’s expertise in matching their skills and experience to the right employer. Employment agencies make money through commission; when the company decides to make a job offer to one of the candidates sent by the employment agency, the agency gets a commission, which is usually a percentage of the new employee’s annual salary.

Are There Any Perks to Starting a Singapore Employment Agency?

There’s a very strong pro-business environment in Singapore, and this bodes well for employment agencies: more business, more employees required. And in Singapore, it’s not just about finding the right CEOs and six-figure income earners to Multi-National Corporations; there’s a healthy demand for all levels of job placements, ranging from middle-management and senior execs to fresh graduates and construction laborers. Since Singapore is also very encouraging of bringing in foreign talent, employment agencies are also quite in demand for helping meet companies’ staffing needs by sourcing from the foreign talent pool.

Singapore Employment Agency 1

The first step towards conducting business as a Singapore Employment Agency is to incorporate a company. You’ll have to incorporate your agency under the 78115 business activity (executive search) or the 78114 business activity (employment agency, but excluding maid agencies).

Singapore Employment Agency 2

Your employment agency must establish a business office for its operations. If you intend to operate your agency from a home office, you’ll need to get an approval from either the HDB (for flats/apartments) or the URA(for private residences).

Singapore Employment Agency 3

Next up is the application for an Employment Agency License.

Click here to see more on guide for License

Here is a comprehensive guide on the License, as well as the application process you’ll have to go through to be issued with one:

Do I need to apply for an Employment Agency License?

It is always smart to first determine whether you need a license. If your company intends to engage in activities that are classified as employment agency activities, you must apply for the Employment Agency License, regardless of whether your agency is based in Singapore or overseas, or whether the jobs your agency deals with are jobs based in Singapore or overseas. The Employment Agency License is issued by the Singapore Ministry of Manpower and is only issued to legal entities, not individuals.

What constitutes employment agency activities?

  • Facilitating the placement of suitable candidates with employers.
  • Collating the resumes of prospective candidates who are looking to be employed.
  • Communication with those prospective candidates regarding job applications.
  • Submitting Singapore Work Visa application to the relevant authorities, on behalf of either employers, or candidates.

Are there agencies that are exempt from needing to hold an Employment Agency License?

Yes. Those agencies that are not actively involved in the placement of prospective candidate with employers, or those that do not substantially influence the outcomes of employment terms and conditions, are exempt from the holding of an Employment Agency License.
Such exempt entities would be:

  • Agencies/centers providing the matching of tuition teachers to clients.
  • Campus placement divisions of Singaporean autonomous universities.
  • Online job portals or online job bulletin boards.
  • Individuals who provide informal job referrals.
  • Courier services used in job placement or recruitment actitivites.

There are two types of Employment Agency License – Select or Comprehensive

When you apply for the Employment Agency License, you’ll have to make a choice between applying for a Select License or a Comprehensive License.
Select License – You’ll have to apply for this license if your employment agency does placement for local or foreign candidates who monthly base salaries are upwards of SGD 7000.
Comprehensive License – If you don’t quality to apply for the Select License, you’ll have to apply for the Comprehensive License.

So what’s the application procedure?

To apply for the Employment Agency License, you’ll have fill in and submit an application to the Ministry of Manpower, as well making a payment of SGD 400 for the license application fee.
After you this fee and submit the application form, expect to wait between 1-3 weeks for the application to be processed. When your application has been approved, you’ll be notified through email, with an IPA (in-principle-approval) letter attached inside.
Once you have the IPA letter, you must submit the documents listed below in order to be issued the Employment Agency License:

  • A Security Bond, coming in the form of a Banker’s Guarantee. You can get a Banker’s Guarantee from a Singaporean bank. To get the bank to issue you a Banker’s Guarantee, you’ll need to open a fixed deposit account with the bank, for a specified amount. The Banker’s Guarantee will have to cover up to a period of 15 months from the start date. This might take a few working days to be processed. Companies issued a Select License must furnish a SGD 20,000 Security Deposit, in the form a Banker’s guarantee. Companies issued a Comprehensive License must make a security deposit of anywhere between SGD 20,000 to SGD 60,000. The amount paid will depend on their track record and placement volume.
  • Clear copies of both sides of your Singaporean ID (if you’re a Singaporean Citizen or Permanent Resident) or your Employment Pass (if you’re not).
  • A recent passport-sized photograph
  • The latest copy of your employment agency’s business profile from ACRA.
  • A copy of your IPA letter.
  • A copy of the certificate which states that you’ve passed the CEI* (Certificate for Employment Intermediaries) course.
  • If you’re going to be operating under a HomeOffice scheme, you’ll need to submit a copy of the approval letter from the relevant authority.
  • A completed checklist form.
  • Any additional document that’s been requested for in your IPA Letter.

*-Please see below for more details about the CEI course.

Okay. I’ve submitted all the documents listed above. When will I know whether my application has been approved?

If all the documents are in order, expect to receive an email notification within 7 days from the date of submission, stating that your application has been approved. Once you have this, you’ll need to make a payment of SGD 100 to be issued the license.

When will I get the license and how long is it valid for?

The Employment Agency License will be mailed to the address you’ve listed in the original application. The license has a validity period of 3 years from the date it is issued. It is renewable after those 3 years.
Approximately two months before your license expires, you’ll get a renewal notice from the authorities, sent to you through the email they have on record. Should your email change any time before the renewal is up, you can update it in your license by using the very same online license management portal you originally used to submit your application.
There’s nothing too hard in regards to meeting the criteria for renewal: your employment agency must have a reasonably track record (no complains, not broken any laws) and the officers of your company must be free of any bankruptcy or court convictions.

Making Sure Employment Agency Personnel Are Certified

All employees of an employment agency that has been issued with a Comprehensive License, (whether they are permanent, temporary or contractual employees), must be certified under the CEI (Certificate for Employment Intermediaries) course. This applies for key appointment holders as well, like the CEO, CFO and General Manager. The certification is required before you apply for an employment agency license. Those key appointment holders need to attend a 40-hour course while all the other employees have to attend a 32-hour course.
Note: Key appointment holders must get certified, regardless of whether they perform or do not perform work related to employment agency activities. For the other employees, they only need to get certified if they perform employment agency activities in their work.
Note: Agencies with Select Licenses do not require certification.

Employment agency personnel need to be registered

Whether they work for Comprehensive licensed agencies or Select Licensed agencies, all employment agency staff (which includes key appointment holders) who perform work related to employment agency activities must be registered with the Singapore Ministry of Manpower. They must also be issued a standardized registration card.
An employee can only be working for, and be registered under, just one employment agency at any one point in time. You’ll have to pay a one-time fee of SGD 160 for each registration; the fee is not refundable. The registration is also not transferable between employers – if the employee of the employment agency wants to switch to another agency, they’ll have to de-register themselves and reapply for the registration under their new company.
Note: Key appointment holders, as well as other agency personnel, are not required to register if they are not performing work related to employment agency activities.

The eligibility criteria for employment agency personnel

All employment agency personnel, and this includes the key appointment holders as well, must be either a Singaporean citizen or permanent resident, or a foreigner who holds a valid Singapore work visa. They must also be certified, where applicable. Also, they should be free of any court convictions or issues of bankruptcy.

Don’t leave your Employment Pass application to chance

Paul Hype Page & Co have our in-house licensed employment agency registered with the Ministry of Manpower and offer a full spectrum of work pass services. We will provide a thorough assessment of all factors of your application and ensure that they meet MOM current standards of review. Our reliable guidance and high success rate come with years of experience and continually staying abreast with Singapore’s immigration regulatory updates.

Call us at +65 6221 4711 or contact us now for a free consultation.