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How to start an employment agency in Hong Kong?

How to start an employment agency in Hong Kong?

Starting an employment agency in Hong Kong involves securing a license and meeting some registration requirements. Here's a general roadmap:

  1. Choose a Business Structure and Register: Decide if you'll operate as a sole proprietorship, partnership, or private limited company. You'll need a Business Registration Certificate (BRC) from the Inland Revenue Department [IRD]. If you choose a limited company, register with the Companies Registry (CR) as well.

  2. Get Your Employment Agency License: This is mandatory and issued by the Labour Department. The process involves:

  • Name Approval: Submit your proposed agency name to the Labour Department for verification.

  • License Application: Once the name is approved, submit the application form with required documents like:

  • Certified copies of directors' and nominated operator's IDs (showing eligibility to work/own a business in Hong Kong).

  • Certified copies of the Business Registration Certificate, Certificate of Incorporation (if applicable), and Articles of Association.

  • Proof of appointment of the nominated operator (if applicable).

  • Background Check Authorization: Allow the police to conduct a background check on the applicant(s).

There are resources available to help you navigate this process. Consider consulting the Labour Department's website on licensing of employment agencies or seeking guidance from a professional.

Do you need an employment agency license?

In most cases, yes, you will need an Employment Agency (EA) license to operate an employment agency in Hong Kong. This requirement is set out by the Employment Ordinance Hong Kong Labour Department.

There are some exceptions, however. You won't need a license if your agency falls under one of these categories:

  • Operated by or on behalf of the Hong Kong Government

  • Operating under the Merchant Shipping (Seafarers) Ordinance (focuses on seafaring jobs)

  • Operated by an employer solely to hire employees for their own organization

  • Operated by educational institutions to assist their students/graduates in finding employment

  • Operated by contractors or sub-contractors to employ manual labor for specific building works on behalf of an employer

  • Operated by the proprietors of publications for non-profit purposes (limited scope)

If you're unsure whether your agency qualifies for an exemption, it's advisable to consult with the Labour Department for clarification. Operating without a license or the appropriate exemption can lead to hefty fines and imprisonment.

How much does the employment agency charge in Hong Kong?

The fees an employment agency in Hong Kong charges can be divided into two categories: what they can charge the candidate (job seeker) and what they can charge the employer (job provider).

Candidate Fees:

  • There's a legal limit on what agencies can charge candidates. By law, they can only collect a commission of up to 10% of the candidate's first month's salary upon successful job placement. This is to prevent excessive fees burdening job seekers.

  • The agency cannot charge any other upfront fees besides services like CV preparation or interview coaching, and these charges must be reasonable and proportionate to the service provided.

Employer Fees:

  • There are no legal restrictions on what employment agencies can charge employers. Their fees can vary depending on the agency, the position being filled, and the industry.

  • It's common practice for agencies to charge employers a percentage of the successful candidate's first year's salary or a fixed fee.

How Bestar Business Consultants can Help

Bestar operates under a broad umbrella that includes business consulting services in addition to accounting. Our business consultants are able to assist you with starting an employment agency in Hong Kong.

Here's how Bestar business consultants could help:

  • Understanding the Requirements: We can guide you through the legal and regulatory framework for employment agencies in Hong Kong, including license application procedures and relevant ordinances from the Labour Department.

  • Business Registration: We assist with registering your business with the Inland Revenue Department (IRD).

  • Application Process Support: There can be complexities involved in applying for the Employment Agency (EA) license. Bestar business consultants can help ensure your application package is complete and meets all the requirements.

  • In-depth professional advice: Employment law is intricate. Bestar consultants can provide general guidance, specific legal matters around employment practices and data privacy.

Bestar can be helpful once your agency is established by providing accounting services such as:

  • Bookkeeping

  • Tax preparation

  • Financial statement preparation

  • Payroll processing

These services are essential for any business, and having a reliable accounting firm can free up your time to focus on running your employment agency.

Contact Bestar: Reach out to Bestar and inquire about our business consulting services specifically related to starting an employment agency. This will give you a clearer picture of our capabilities.

By combining resources like the Labour Department website, and Bestar's business consulting services, you can increase your chances of a smooth and successful launch for your employment agency in Hong Kong.

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