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Open a Recruitment Company in Japan

Open a Recruitment Company in Japan

In Japan, recruitment can be a great business opportunity. That is because the biggest problem met by foreign companies here is finding the right employees. Commonly, the country has a few talented professionals who possess English language knowledge. This is one of the main reasons for which starting a staffing agency in Japan can be a very prolific business idea.

This is mainly due to a low birth rate and certain cultural characteristics. Our company formation consultants in Japan can provide assistance to foreign entrepreneurs who are looking to open a Japanese recruitment company.

With a vast experience in company formation matters, our specialists in Japan can help foreign investors register any type of business here, including employment agencies.

Our team can also give you details about immigration to Japan for the purpose of company creation.

Choosing a business structure for a Japanese recruitment company

Foreign investors benefit from the same conditions as local entrepreneurs related to registering a business in Japan. However, in order to reside in Japan and run their companies, they will be required to apply for a residence permit.

Our immigration lawyers in Japan can give you more information about the application requirements.

The same condition applies when opening a recruitment agency which will grant them the right to live and work in Japan.

The first step which needs to be taken when deciding to open a recruitment agency in Japan is to select the most suitable business structure. Given the fact that an employment company enters the category of small and medium-sized enterprises, the limited liability company is one of the best types of structures which can be used for such activities. Once the business form is chosen, the investor can start the Japanese company formation formalities. These imply drafting the necessary documents and filing them with the Companies Registrar. Then, the employment service license must be obtained.

License needed to set up a recruitment company in Japan

In order to open a recruitment company in Japan, a license has to be obtained. This license can be issued to a business or to a private person.

There are two types of licenses for a recruitment company in Japan:

The employment placement service license (for job searching and headhunting): this license can be:

       o free charging employment placement license; or

       o free employment placement license.

Worker dispatching service license (for temporary staffing): our Japan company formation advisors can provide more details on this type of license.

If you are interested in other matters, such as immigration to Japan, our team can answer your questions about visas, residence permits, permanent residence, and acquiring citizenship. Foreign nationals who choose to follow the naturalization route should also know that they will renounce their current nationality in order to become Japanese citizens. Our team can give you more details.

How to obtain an employment service license in Japan

Apart from the requirements mentioned above, recruitment agencies will also be requested to comply with a few more conditions in order to obtain their licenses from the Ministry of Health, Labor and Welfare in Japan.

One of these requirements implies appointing a company administrator who will also be in charge of the recruitment procedure. One of the essential conditions for this person is that he or she must have at least 3 years of experience in the recruitment field. It should be noted that this role can be taken by one of the company’s managers.

The business owner will also need to follow a reservation of lecture course in order to set up a recruitment company in Japan.

Another condition imposed on employment agencies in Japan is to appoint one recruiter to every 100 candidates the company handles. This requirement usually applies to large staffing agencies in Japan. Considering most companies handle around 50 candidates per month, the number of recruiters is limited to one.

Requirements to start a free charging employment placement company in Japan

The requirements for starting a business in Japan as a free charging employment placement company are:

  • • a certain amount of net assets: it is set at JPY 5 million multiplied with the number of offices of the company, or above;
  • • a certain amount of cash deposits: the applicant must have at least JPY 1.5 million plus (JPY 600,000 multiplied with the number of offices minus one) in cash or bank deposits;
  • • the company must have a placement manager appointed;
  • • the company should have an office space: our company registration representatives in Japan can provide more information on this requirement;
  • • other requirements, depending on each business: we can offer more details on what these other requirements for opening a recruitment company in Japan can consist of.

Starting a dispatching employment agency in Japan

If the requirements for starting a free charging employment company in Japan is subject to obtaining certain licenses, the dispatching recruitment agency will also need to company with a few specific requisites.

Among these, we remind the following:

  • –          the employment company must appoint a career consultant in order to help candidates;
  • –          the share capital is JPY 20 million multiplied by the number of offices in Japan;
  • –          the guarantee is set at JPY 15 million multiplied by the number of offices;
  • –          the office space must be at least 20 m2 for each of the company’s recruiters.

With respect to the office space, staffing agencies can also carry out job interviews online, case in which the size of the office is not that relevant.

The share capital and guarantee will be lower when setting up smaller companies which dispatch 10 or less than 10 employees. The minimum share capital required in this case is JPY 10 million which should be always found in the company’s bank account.

It should be noted that most recruitment companies in Japan operate as dispatching employment agencies, as free employment companies are usually created by associations which recruit students.

Why open a recruitment company in Japan?

Japan is one of the most developed economies in the world and it attracts a great number of foreign investors year after year. The large number of companies set up here in the last few years have faced an acute workforce crisis which is why many local businesses now try to find foreign workers. Given these opportunities, the number of foreigners seeking to obtain employment in Japan has also increased, especially considering the high salaries, the good work conditions and living standards which are some of the best in Asia.

Recruitment agencies are now thriving in Japan given the requests coming from both Japanese companies seeking for employees, but also foreign qualified workers seeking for jobs. Moreover, it is possible for Japanese staffing agencies to complete the preliminary phases of the interviews online and thus increase their client database.

If you would like to set up a human resource company in Japan, or for assistance in starting any type of a company in Japan, please feel free to get in touch with our friendly company registration team members in Japan. We remind foreign investors that our company registration agents in Japan are qualified to offer specialized business registration services in most industries in Japan.