An employment agency aid other companies in fulfilling their recruitment and staffing needs. In other words, they act as third-party companies that connect employers with potential employees. Such agencies engage in the placement of both foreign and local candidates from entry to top-level positions.
In Singapore, there has always been a demand for foreigners to take on not only executive and management positions but also manual labour jobs. This has led to the rise of numerous big and small employment placement agencies in the little red dot.
All such agencies in the country are required to have an Employment Agency License, administered by the Ministry of Manpower (MOM). Any individual or agency who supports an unlicensed employment agency may face dire consequences of the offence committed. Note that you do not require an employment agency license if you are recruiting staff for your own company.
This article provides detailed information on:
- how to set up an employment agency, and
- how to apply for an Employment Agency License.
Who Needs to Apply for an Employment Agency License in Singapore?
All individuals and companies that are involved in various employment agency activities in the country are required to apply for the license. This rule applies even if the company is based overseas.
Employment agency activities include the following:
- Gathering the resume of job-seeking candidates;
- Communicating with prospective candidates about their job applications;
- Submitting Work Visa applications to authorities in Singapore on behalf of candidates or employers; and
- Communicating with the employer and arranging the placement of capable candidates.
Step-by-Step Guide on How to Start an Employment Agency
Step 1: Incorporate a Singapore Company
First of all, you must incorporate a company in Singapore.
While incorporating, you must choose the right business activity code. The common business activity codes for employment agencies are:
- Employment agencies (excluding maid agencies) – 78104
- Maid agencies – 78103
- Executive search – 78105
Step 2: Set Up an Operating Office
Before you apply for a license, your company should have a business office to operate from.
You can choose from a variety of options based on your budget and requirements. Note that you will need approval from the Urban Redevelopment Authority (URA) to make any changes to a conservation building. To display signs on a conservation building, you will need permission from the Building and Construction Authority (BCA). Furthermore, you must also obtain permission from the Singapore Civil Defence Force (SCDF) to carry out fire safety works.
Step 3: Apply for the Employment Agency License
Finally, you can apply for the employment agency license.
There are 2 types of employment agency license:
- Select License, and
- Comprehensive License.
A Select License is best suited for employment agencies that place candidates who earn over S$7,000 monthly salary. Agencies that place all other candidates require a Comprehensive License. Note that only legal entities can apply for a license. Individuals are not eligible to apply for the license.
Below is a guide on how to apply for an Employment Agency License.
Guide on How to Apply for an Employment Agency License:
Eligibility and Certification for EA Personnel
To be an eligible employment agency personnel, you must be a Singapore citizen, permanent resident of Singapore or Singapore work visa holder. You are also expected to be certified and free of any court convictions or bankruptcy.
All permanent, contractual, and temporary employees including key appointment holders working at Comprehensive Licensed agencies must have completed the Certification for Employment Intermediaries (CEI) course. However, this certification is not a requirement for Select Licensed agencies.
Key appointment holders including the CEO, COO, CFO, and General Managers must take the 40-hour course. Other EA personnel have to attend the alternative 32-hour course. It is mandatory for all key appointment holders to get certified. Other personnel only need to be certified if their job role involves employment agency related tasks.
Employment Agency Personnel Registration
All Singapore employment agency personnel must be registered with the Ministry of Manpower Singapore and hold a registration card. A non-refundable fee of S$160 is charged for each registration. Moreover, registration cannot be transferred from one person to another.
At any given time, an employee can be registered and allowed to work under one employment agency. In case an employee wants to switch jobs and join a different agency, he must de-register from the previous company and reapply to be registered under the new company. However, he does not need to register if his new job role does not demand any employment agency related tasks.
Application Process for the Employment Agency License
Applying for an employment agency license to the MOM involves submitting the completed application form along with a S$400 application fee.
The application will be processed within 1 to 3 weeks upon submission. If approved, you will be informed via email. The email will also contain an in-principle-approval (IPA) letter.
Next, you have to prepare and submit the below documents to get your license issued:
- Copy of your Singapore ID or Employment Pass (both sides)
- Copy of your updated business profile from ACRA
- One recent passport-size photograph
- Copy of the approval letter
- Copy of the IPA letter sent to you upon approval
- Copy of the Certificate indicating that you have passed the Certificate of Employment Intermediaries course
- Completed checklist form
- Any other documents mentioned in the IPA letter
Along with the preparation of the above documents, you must also obtain a Security Bond from a Singapore bank. To ensure that the bank issues a Banker’s guarantee, you will have to open a fixed deposit account with an amount suggested by the bank. Note that the Banker’s Guarantee should cover at least 15 months. Businesses with a Select License must pay S$20,000 as Banker’s Guarantee and companies with a Comprehensive License will have to pay between S$20,000 to S$60,000, based on their reputation and placement volume.
After submitting all the required documents, you will get an email notification within a week informing that your documents have been processed and approved. To proceed, you will have to pay a one-time non-refundable S$100 fee to get your license issued. Finally, your license will be mailed to the address indicated in the application. Overall, completing all the steps will take an average of 3 to 5 weeks.
What to Do if Your Employment Agency License Application is Rejected?
A rejected application is highly unlikely if you have submitted the application and all relevant documents accurately.
In the event that your application is rejected, do not worry. Within the first month of the rejection, you can submit an appeal. Senior officers will review the application and take around 2 weeks to process it. This is done on a case-by-case basis and the authorities may request additional documents.
Renewing Your Employment Agency License
After the 3 years validity of the Employment Agency License, you are required to renew it. The authorities will send a renewal notice 2 weeks prior to the license expiry date. This notice will be sent through email. So, if you have recently changed your email address, do update it. You can do so by using the online license management portal to update the change of email address.
Meeting the license renewal eligibility criteria for employment agencies in Singapore is easy and straightforward. You just need to meet the following conditions:
- Your employment agency must have a good reputation. The agency must follow the rules and regulations strictly and do not have an excessive number of complaints against it.
- The employment officers must be free of court convictions and bankruptcy.
