Investors who open a recruitment company in Japan follow the general steps for company formation in the country, combined with the licensing requirements that are in place for businesses that offer temporary staffing services.
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.
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General incorporation steps for a Japanese recruitment company
Company formation in Japan is a multi-step process that involves a set of mandatory registrations, ending with the recognition of a new legal entity. Our team summarizes the main issues investors will need to consider:
- 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 that can be used for such activities;
- At least one founder is required to open a limited liability company and the usual capital for the business form will be 1 yen or more. The company also needs an appointed director;
- Selecting the company name is an important step that needs to comply with the local rules for business names and be mindful of any other already registered business names which are exactly the same or similar to the desired one;
- 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 Regional Legal Affairs Bureau. It can take about one to two weeks for the processing of the application.
- Finally, the recruitment company in Japan applies for the right type of license before commencing its activities.
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.
The same condition applies when opening a recruitment agency that will grant them the right to live and work in Japan. Our immigration lawyers in Japan can give you more information about the application requirements.
Licenses 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.
The main requirements for a temporary staffing service business in Japan
Investors who open a recruitment company in Japan that will function as a temporary work agency have to comply with a clear set of requirements, in addition to the ones needed to open a company in Japan in general. Our team lists these below:
- Mandatory assets: 20 million yen or more;
- Size (floor space) of the business location: 20 sqm or more;
- Mandatory representative: yes;
- Career development support system: have a consulting window for career counselling and create and implement education and training plans in the quantum of at least 8 hours per year.
A license to operate temporary staffing services in Japan is issued for 3 years and can be extended to be valid for 5 years.
Our team that can help you set up a company in Japan can also give you more information about the Worker Dispatching Act, namely, the conditions imposed by the Staffing Services Association for company licensing when providing staffing services.
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 offering services to both Japanese companies seeking employees and also to foreign qualified workers looking 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.
We remind foreign investors that our company registration agents in Japan are qualified to offer specialized business registration services in most industries in Japan. Our team offers a wide range of services, from the early steps of company formation in Japan, to the subsequent licensing and compliance of the company.
How are recruitment companies taxed in Japan?
Investors who follow through with the processes required to open a recruitment company in Japan must observe ongoing requirements once their business is registered and it starts to derive income from Japan.
The following taxes are imposed on the income generated by companies that offer recruitment services in Japan and other companies, in general:
- Corporate tax;
- Local corporate tax;
- Corporate inhabitant taxes (prefectural and municipal, with two different rates);
- The enterprise tax;
- The special corporate enterprise tax.
The total tax burden on corporate income is calculated by adding up all the aforementioned types of corporate taxes. The following rates are currently in force for companies according to three brackets:
- Income of up to 4 million yen: total tax rate of 22.4%;
- Income of over 4 million yen but below 8 million yen: total tax of 22.86%;
- Income over 8 million yen: 38.8% total tax rate.
Understanding these tax rates and the conditions that apply to a Japanese recruitment company is an issue with which our team can assist you.
If you would like to set up a human resource company in Japan or for assistance in starting any type of company, please feel free to get in touch with our friendly company registration team members in Japan.