How To Get Employment Agency License In Singapore

Before they can start their business operations, all employment agencies in Singapore are required to get an Employment Agency License (EAL). All types of recruitment companies must have this fundamental license, which is governed by Singapore’s Ministry of Manpower (MOM). 

In Singapore, an employment agency is a business that assists other businesses with their hiring and staffing requirements. Typically, the employment agency serves as the intermediary between employers and potential employees. An employment agency may be involved in the placement of domestic and international job seekers for entry-level positions all the way up to senior executives.

In various nations, an employment agency license may also be known as:

• Recruitment agency license
• Staffing agency license
• Placement agency license
• Manpower agency license

WHO NEEDS AN EMPLOYMENT AGENCY LICENSE IN SINGAPORE?

The Employment Agency License is required for all organizations and people conducting employment agency business in Singapore. This is true whether the agency is headquartered in Singapore or elsewhere and whether it handles jobs there or elsewhere. Activities include the following:

• contacting potential applicants to discuss their job applications;
• assembling the resumes of potential applicants looking for work;
• placing applicants with employers; and 
• submitting Singapore Work Visa applications to the authorities on behalf of employers or candidates.

Agencies are excluded from requiring an employment agency license if they are not actively involved in connecting job seekers with businesses or if their influence over hiring policies is limited. Such entities include, for instance:

• Ad hoc, informal, or casual employment referrers; 
• organizations or facilities that connect tutors with students;
• job boards and job portals available online;
• Courier services used for hiring or job placement; 
• campus placement offices run by Singapore’s independent institutions.

CHOOSING THE CORRECT LICENSE CATEGORY IN SINGAPORE

• Comprehensive License (All) – Covers recruitment of job candidates regardless of their nationality;
• Comprehensive License (Non-Foreign Domestic Worker) – Covers employment of job searchers regardless of nationality but excludes foreign domestic workers or foreigners whose vocation listed in their application for a work visa is “domestic worker”;
• Comprehensive License (Local) – Excludes hiring of foreigners and only applies to the employment of Singaporeans or Singapore Permanent Residents;
• Select License – Includes employment for any individual with a monthly salary of more than SGD 4,500.

FACTS & REQUIREMENTS FOR SETTING UP AN EMPLOYMENT AGENCY IN SINGAPORE

Registering Singapore company

To engage in recruitment activities, the applicant must first form a Singapore company and choose a business activity code that is appropriate for those activities. Refer to registering a Business in Singapore guide for more information. 

Setting up a business office

The business must set up an operational office. Depending on the business goals and budget, they can choose from various office space options. If the applicant wants to expand on or change a conservation building, they must get permission from the Urban Redevelopment Authority (URA).

If the applicant wants to put up signs on the conservation building, they must first get permission from the Building and Construction Authority (BCA). The Singapore Civil Defence Force must give its approval before it can carry out any fire safety work.

Applying for Employment Agency License and Paying the security deposit

The business must get an Employment Agency License from the Singapore Ministry of Manpower. Only legal entities are eligible to receive the license; individuals are not. 

Businesses that receive a Select License must provide a S$20,000 security deposit through a banker’s guarantee, whereas organizations that receive a Comprehensive License must provide a S$60,000 security deposit.

Certification of employment agency personnel

All employees (whether permanent, temporary, or on a contractual basis), including key appointment holders (e.g., CEO, CFO, COO, General Managers), must be certified under the Certificate for Employment Intermediaries (CEI) course in order to work in an employment agency that has been granted a Comprehensive License.

Before acquiring an employment agency license, certification is necessary. Key appointment holders must complete the 40-hour training, while other employees of employment agencies must complete the 32-hour course. It should be noted that certification of important appointment holders is required, regardless of whether they operate with employment agencies or not. Only if they carry out tasks relating to employment agencies all other staff members must be certified.

Registration of employment agency personnel

No matter if they work for Comprehensive licensed agencies or Select licensed agencies, all employment agency staff, including key appointment holders, who do employment agency-related work must register with the Singapore Ministry of Manpower and get a standardized registration card. A worker can only be registered with and work for one employment agency at any given moment.

Each registration requires a one-time payment of S$160 that is non-refundable. There is no employer-to-employer transfer of the registration. The employee of a certain recruitment firm who want to change careers and join another agency must cancel their registration and reapply for registration with the new business. Key appointment holders and other agency staff do not need to register if they do not participate in employment agency-related work.

WHO IS ELIGIBLE TO APPLY FOR AN EMPLOYMENT AGENCY LICENSE?

According to Singaporean law, only key company employees who meet the requirements below are eligible to apply for a license on a firm’s behalf. The following defines qualified individuals:

• Managing director and director (for a corporation); 
• Proprietor (for a sole proprietorship and partnership);
• General partner (for a limited partnership), 
• Partner (for a limited liability partnership);

The applicant must:

• be a Singaporean or a permanent resident; 
• not being an unpaid bankrupt; 
• not having any previous convictions for fraud or human trafficking anywhere else;
• avoiding operating an employment agency whose license has been suspended.

The applying company must list one of the following as its primary operations in its ACRA profile:

• Maid Agencies;
• Employment Agencies;
• Executive Search Agencies

HOW TO APPLY FOR AN EMPLOYMENT AGENCY LICENSE IN SINGAPORE

Step 1: Applying to the Commissioner

The key applicant must submit the application and $400 application fee to the Commissioner (Ministry of Manpower) in order to receive or renew an employment agency license (this can be performed online). The applicant will be notified of in-principle approval or rejection within 7 working days.

Step 2: Submitting security bond and banker’s guarantee documents

The applicant must purchase the security bond, make a security deposit, and submit all required paperwork to the Commissioner within four weeks of receiving the approval.

The Commissioner determines this security deposit amount as follows:

Regarding every Comprehensive License

$60,000 within the first year of operation; $20,000 to $60,000 starting in the second year of operation, based on the placing of Work Permit and S Pass holders and the number of previously accrued demerit points.

For Select Licenses

Depending on how many demerit points have already been accumulated, the first year of operation will cost $20,000; the second year will cost between $20,000 and $60,000 in total.

The applicant will be notified that the application has been accepted within 7 working days, subject to the license issuance fee payment.

Step 3: Obtaining the license and Registering employment agency personnel

A further fee of $100 must be paid if the Commissioner decides to issue or renew a license. The license will be issued within three working days after receiving the fee.

Before allowing individuals to carry out any specific employment agency work, an agency must apply to the Commissioner for the registration of such personnel. Each individual must pay a registration fee of $160. The information of the registered personnel will be added to MOM resources along with a registration number. Normally, this process takes seven working days.

Step 4: Issuing registration cards

Any employee of an employment agency who registers with the agency will receive a registration card in the prescribed format. Employees are required to display their registration cards to any client who is applying for work upon request and grant permission for that person to record data from the registration card.

DOCUMENTS REQUIRED TO APPLY FOR SINGAPORE EMPLOYMENT AGENCY LICENSE

• A clear copy of the applicant’s employment pass or a Singapore ID (for Singapore citizens and permanent residents).
• The most recent version of the company’s ACRA business profile
• A current passport-size photo
• A copy of the letter of principle approval
• If one plans to operate under the HomeOffice scheme, a copy of the relevant authority’s approval letter is required.
• A duplicate of the applicant’s Certificate for Employment Intermediaries (CEI) course completion certificate
• Filled-out checklist form
• Any further paperwork that was mentioned in the letter of in-principle approval.

The updated Employment Agency Regulations must be followed by employment agencies. Changing fee caps and adopting a new fee refund policy are two of the changes. The alterations’ specifics are as follows:

Fee cap

If the fee is within the established fee cap, employment agencies may charge their clients (i.e., the employer and the chosen candidate). The amount that can be charged to employers for services won’t be capped. For the duration of the authorized work permit or the employment contract, whichever is shorter, the fee charged to the candidate who is selected for employment should not, however, exceed one month’s salary every year.

A maximum of two months’ worth of income may be used for this. The fee cap will apply to all agency fees collected by Singaporean employment agencies, regardless of whether they were obtained directly from candidates or through an intermediary recruitment agency abroad. 

It should be noted that the fee cap does not apply to the agency fees that foreign employment intermediary agencies collect and keep. The fee cap does not apply to some charges, including those for international training, international medical exams, and international travel to Singapore. The costs of training, medical exams, and other expenses incurred in Singapore are not the responsibility of the candidate because the employer or employment agency is responsible for them.

Fee refund

The employment agencies are required to return 50% of the candidate’s agency fees if the employer (who was a client of the employment agency) fires the employee (who was employed via the employment agency) before the candidate has completed six months of employment.

If a candidate initiates the end of their job, this regulation does not apply. If the foreign worker’s job ends before being repatriated or within 7 working days after that point, the hiring agency must refund the payments.

LICENSE VALIDITY, SUSPENSION, AND REVOCATION

The license is valid for a specified period, usually three years, and is decided for each case. The permit can be extended. To do this, the applicant must submit a renewal application to the Commissioner at least three months before the license expires. They must also pay a $400 application cost and an additional $100 fee when they receive the renewed license.

The license may be suspended or revoked at any moment if the commissioner finds that the licensee:

• is breaking the law in issue; 
• hasn’t complied with the license’s requirements; 
• acts in a manner that is harmful to his client’s interests; 
• has stopped operating an employment agency; 
• hasn’t operated an employment agency for a continuous period of six months;
• acted against the public interest; 
• has committed an offense; or 
• isn’t any longer a fit and proper person to hold the license.

Any of the aforementioned causes could lead to license revocation. A license may also be revoked by the Commissioner at the licensee’s request (upon a revocation application). 

When the license is suspended, the applicant may continue any employment agency activities they have already started, but they should avoid making any new agreements for placement or recruitment. On the other hand, if their license is suspended, they have to stop all of the employment agency activities right away, whether they were started before or not.

Reach out to us at Relin Consultants for further assistance.