Obtaining an Employment Agency License in Singapore
Introduction
Singapore is often ranked at the top of the list of countries with the least red tape and the most efficient bureaucracy. Nevertheless, certain types of business activities in Singapore require a license — particularly in industries that can impact the health or financial well-being of consumers. Typically, such a license is issued by the respective government body and it grants the company permission to conduct regulated business activities in Singapore.
Setting up an employment agency is one of the activities that require licensing. This article provides you the necessary information if you are considering obtaining such a license. It includes the following topics:
Do You Need an Employment Agency License?
To understand whether you’ll need a license for your specific business, it is important to understand Singapore’s definition of an employment agency.
State legislation defines an employment agency as activities carried on to facilitate the employment of persons in any capacity by other organization(s). This activity may be performed for the purpose of a monetary gain, or not. However, if the activities are carried out by a company for the sole purpose of recruiting employees on its own behalf then it is not considered to be an employment agency.
The following are examples of the types of services that are considered to be employment agency work:
- Communicating with any applicant for employment for the purpose of processing an application for employment;
- Collating biodata or the resumé of any applicant for employment, for the purpose of establishing an employer-employee relationship;
- Submitting any application on behalf of any employer or applicant for employment to the Controller of Work Passes;
- Facilitating placement of any applicant for employment with an employer.
In general, such services seek the employment of persons in any capacity within or outside of Singapore, on their own behalf or on behalf of an employment agency. If your company is going to conduct any of the above activities, it must obtain a license.
However, a license is not required where a person performs such work:
- In his or her capacity as employment agency personnel and is respectively registered; or
- For the sole purpose of recruiting persons for employment on his or her own behalf;
- With the objective of placing a foreigner in a training program or obtaining a training employment pass for that individual.
Also, certain exemptions to the license requirement are available. An exemption may be available to:
- any person who conducts an employment agency activity only on the Internet;
- any person who maintains a job bulletin board or any other platform where employment information is posted, and does not otherwise perform any work for the employment of persons;
- any person who simply submits an application on behalf of any employer to the Controller of Work Passes and does not otherwise carry on an employment agency or perform any such work.
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Which Category is Right for You?
If your company plans to conduct activities that require an employment agency license, you may choose among the following categories of licenses, taking into account the specifics of your situation:
- Comprehensive License (All): Covers employment of job-seekers regardless of their nationality;
- Comprehensive License (Non-Foreign Domestic Worker): Covers employment of job-seekers regardless of nationality, but excludes foreign domestic workers i.e. foreigners whose occupation stated in their application for a work permit is “domestic worker”;
- Comprehensive License (Local): Covers employment of only Singaporean or Singapore Permanent Resident workers and not employment of foreigners;
- Select License: Covers employment of any person earning a monthly salary of more than SGD 4,500.
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Key Requirements for an Employment Agency License
Who is eligible to apply for a license?
Singaporean legislation provides that only key company personnel who satisfy the criteria below may apply for a license on behalf of a company. Qualified persons are defined as follows:
- Owner (for sole-proprietorship and partnership);
- Managing director and director (for company);
- Partner (for limited liability partnership);
- General partner (for limited partnership);
Furthermore, the applicant must:
- Be a Singapore citizen or permanent resident;
- Not be an undischarged bankrupt;
- Not have any previous convictions anywhere for dishonesty or human trafficking;
- Not be involved in managing an employment agency whose license was revoked.
Finally, the applying company must state one of the following activities as its principal activities in its registered profile with ACRA:
- Maid Agencies;
- Employment Agencies;
- Executive Search Agencies.
What requirements must the employment agency personnel meet?
The employment agency key appointment holders and personnel must not be:
- Convicted of a human trafficking or dishonesty-related crime;
- Previously involved in the management of an employment agency whose license has been revoked;
- Undischarged bankrupts (applies only to key appointment holders).
Also, all Comprehensive Licenses require obtaining a Certificate of Employment Intermediaries for key appointment holders and other personnel engaged in agency work. The aim of this certificate is to ensure the personnel have the necessary knowledge of employment legislation. So the first pre-step to obtaining a license is acquiring such a certificate.
Procedure for Obtaining the License
Submitting an application to the Commissioner
To obtain or renew an employment agency license, the key person must submit the application form to the Commissioner (Ministry of Manpower) with the application fee of $400 (this can be performed online). Within 7 working days, you will receive a notification with an in-principle approval or rejection.
Submitting security bond and banker’s guarantee documents
Within 4 weeks from the time of receiving the above approval you should make a security deposit — buy the security bond and submit the necessary forms and documents to the Commissioner.
This security deposit amount is determined by the Commissioner as follows:
For all Comprehensive Licenses:
- $60,000 within the first year of operation;
- From $20,000 to $60,000 from the second year of operation, depending on the number of Work Permit and S pass holders placed and demerit points previously accumulated.
For Select Licenses:
- $20,000 within the first year of operation;
- From $20,000 to $60,000 from the second year of operation, depending on the number of demerit points previously accumulated.
Within 7 working days you will receive a notification stating that your application is approved, pending payment for issuing the license.
Obtaining the license
If the Commissioner decides to grant or renew a license, an additional fee of $100 must be paid. Within 3 working days after the payment is made, the license will be issued.
Registering employment agency personnel
An agency shall, before permitting personnel to perform any specified employment agency work, apply to the Commissioner to register such personnel. The respective registration fee will be $160 per personnel. The personnel who are registered will receive a registration number, and their information will be uploaded to MOM resources. This process usually takes about 7 working days.
Issuing registration cards
Upon the registration of any employment agency personnel, the agency shall issue a registration card to the personnel in the established form. If requested, personnel must show their registration cards to any client who is an applicant for employment, and allow that individual to record information from the registration card.
Validity, Suspension, and Revocation of a License
The license remains in force for a specified period, this duration is determined for each particular case and is usually 3 years. The license may be renewed. To do so, you should submit to the Commissioner a renewal application, at least 3 months before your license expiry date and pay the fee of $400 when you apply and another fee of $100 when the renewed license is issued to you.
The Commissioner may suspend or revoke the license at any time if the Commissioner determines that the licensee:
- is contravening the respective legislation;
- has failed to comply with the conditions of the license;
- acts in a manner to be detrimental to the interests of his clients;
- has ceased to carry on an employment agency;
- has not carried on an employment agency for a continuous period of 6 months;
- has acted against the public interest;
- has committed a criminal offense; or
- is no longer a fit and proper person to continue to hold the license.
Note that the license revocation can occur for any of the above reasons. The Commissioner may also revoke a license on the request of the licensee (upon a revocation application). When your license is suspended you may continue any previously initiated employment agency activities but should refrain from entering into new recruitment or placement agreements. On the other hand, when your license is revoked you must immediately cease to carry on all employment agency activities, whether previously initiated or new.
Frequently Asked Questions
Summary
If plan to setup a business that will help other companies with their recruitment and staffing needs, very likely, you will need an Employment Agency License for your company. In other countries this license is also referred to as the Recruitment agency license, Staffing agency license, Placement agency license, or Manpower agency license. It is important to obtain such a license before you start your operations. The procedure and requirements are comprehensive but straightforward. We can help you obtain such a license after you have incorporated your company.
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